Blue Ocean Strategy Analysis

Kellogg also packaged its products in more innovative and attractive ways. CPW aimed to invest more into its digital marketing strategy in 2006 by shopping for a global digital marketing agency. In terms of pricing, Kellogg as the market leader followed a differentiation strategy taking advantage of its loyal customers ‘willingness to pay a premium, while CPW as the challenger, adopted a penetration pricing strategy aiming to provide similar and high quality products at a lower price than the market leader.

CPW’s distribution strategy is a direct distribution one,

Kellogg also seeks direct distribution, and distribution capability has been one of the key reasons for its integration strategies in emerging markets.

Kellogg offers a wide range

The blue oceans denote an environment where products are not yet well-defined, competitors are not structured and the market is relatively unknown.

Companies that sail in the blue oceans are those beating the competition by focusing on developing compelling value innovations that create uncontested marketspace.

Adopters of blue ocean strategy believe that it is no longer valid for companies to engage in head-to-head competition in search of sustained, profitable growth

With the un-tapped venture competitive advantages and leading key emerging markets, CPW can create a blue ocean strategy in both of its emerging markets.

As illustrated in the analysis, Creating an international competitiveness and developing core competencies for CPW will depend on two key strategies; first, to capitalize on the firm’s existing core competencies which are its pricing strategy and its successful Asian market development. Second, developing new core competencies in areas that can be described as critical success factors which are; product diversification and innovation, and after sales services.

To capitalize on CPW’s success in its penetration pricing strategy, the company should continue to optimize production cost and offer high quality products at lower

General Mills and Nestlé should integrate more of their expertise and activities on a global scale. Having General Mills as the sole production arm for CPW should be a good first step.

In the second stage of CPW’s globalization, the company should launch a global knowledge transfer program.

By doing that, CPW will have a huge leverage of global manufacturing and sourcing locations where costs are lower.

Standardizing product manufacturing lines across global General Mills and Nestlé’s locations should reduce transportation and manufacturing costs enabling the company to offer lower prices.

CPW should allocate less manufacturing facilities in the US and Switzerland and target lower wages nations through using General Mills expertise in neighbouring locations such as Latin America and use Nestlé’s expertise in Europe to allocate more manufacturing in Eastern Europe, Asia and Africa.

In terms of supply, and besides keeping main grain supply in the US, CPW should seek backward integration in emerging markets and develop its own grain farms in

Africa and Asia. CPW should capitalize on its successful Asian market development also seeking more market penetration