As the impact and campaign on obesity epidemic continues to up rise, the cereal industry and to a narrower perspective the firms allied to prospects of the cereals continue to be affected. The firms (General Mills) have continued to be affected by the same in a direct manner. This has been through the requirement of providing 100% whole grain products to prevent and minimize obesity globally. Other legal structures are such as providing advertisement where limitation is to be done on children.
Like the Brandburger and Nalebuff theory on value net analysis, the case of the General Mills is rooted and defined under the facets of five compliments. These are the suppliers, the company structure itself, the competitors, complimentors and customers. To this company the operational structure in its activity since 2003 change to incorporate the requirements of these variables. With these requirements, the General Mills as a firm have consequently been faced with a problem of poor business activities endowed with losses and inefficiencies in their operations.
The refuge to this has been found by establishing various business strategies that help the firms to prevail in a competitive environment with the goals and objectives of the firms being at the optimal scales. The strategies are largely operational which seek to provide various efficiencies in the activities of the firms above providing a tool for optimal costing. The foundation of the company is dated back in 1899. Its main activity is mainly producing products (food). It has its headquarters at Golden Valley. It has a wide range of products whose number is far above100 brands.
It started as a milling company. All through, its production activities have been exorbitantly exceptional with a continued image of good performance. However, the effect of obesity which is 21% in the US population has been a factor of consideration of the General Mills activities. In attribute to its activities the company was offered with a honor by the National Business Group on Health as producing product components that were friendly to the preventions of obesity and diabetes in general. The same honor by the company in 2003 drew various corporate issues which acted to affect it activities.
The company however employed the concept of value net analysis to ensure an adequacy in its performance. It adequately weighed the opportunity between the changing modes of production and the benefits which would accrue from the same activity. Firstly, its product was changed to strictly whole grains which could reduce obesity. The same corporate activity waged various issues about the organizational behaviour to the company. With the desirable product output, the company was achieving various success factors in the market.
However, the whole grain product line called for various production activities which could provide it with a better place within the market. Consequently, a package of strategies was implemented to help it compete successfully. Perhaps, with the changing corporate activity to provide whole grain, the company would have traded at loss if solid business strategies were not employed. Consequently, this concept has captured diversity into five of its components. The changing state of production activities echoed various impacts to the stakeholders of the company.
Firstly, the company customers were perhaps the biggest part of the stakeholder population to be affected. They had to change the utility and demand functions of their consumption characteristics to engage in the changing requirements of the company. This was a change in the state of consumption and supply function which showed distortions The state of competition was also stiff. The market for grain products within the US is comprised of many investors. However, was considerably affected with the changing state of production activities Due to the high number of them, the market is highly competitive.
Either, the grain market is perfectly competitive with the market price determined by the equilibrium point between demand and supply of the commodity. For a highly competitive state within such a market, the firms ensure operational structures that provide a high competition portfolio. To the General Mills, the ensuring of a competitive advantage has never been compromised. However, certain factors have been endowed in providing the same scale of advantage. Through out its production activity, the company has ensured high quality product which can adequately complete well at the market.
High quality products can be allied to the various brands of whole grain which are produced in a high quality manner. Through such products, the company has embraced an increasing state of activity with a good state of profit turnover. Complementing such high quality is the component of high standard production techniques and methods that provide high quality products. Final results of high techniques of production and product quality have rationalized in providing for frontiers aimed at optimal costing. As a rule, optimal costing is a compliment for efficiency in all production activities within an organization.
To the General Mills, optimal costing has never been compromised. The corporate governance and structure of leadership was been in important concept in the company since 2003. The company structure was by itself highly operational. It had a good array of corporate governance which was as per the requirements of the US corporations. This has been in the understanding of the role played by the organizational behaviour in any firm. Conventionally, organizational behaviour is an important tool for defining the business culture.
This culture is important in defining the relationship between the different party components within the organization. To the General Mills, organizational behaviour has provided persuasive role in defining the interaction phenomenon between the management and the workers and between the workers themselves. Consequently, good relationship between the parties within General Mills has been an important component in defining how the activities have been done. There has been full potential exploitation of the human resources package.
A good collaboration between the workers and the management has ensured high productivity by the different parties. Every person have adequately played his/her role with the right package of resources been diverted to the right activity. With good relations the company has embraced a reduced level of conflict between the parties in the organization. Elsewhere, the company has embraced the effect of high performance and productivity in its activities from the efficiency provided by the effects of adequacy in governance. For efficiency and high productivity, General Mills has the aspect of input supplier provided for in high quality manner.
The context of input has been an important factor in the company’s activity. The sourcing of input products and services has complimented the use of high quality sourcing. This is important in the company’s costing system. Costing factor determines the level of profit / revenue in the company’s revenue structure. With the importance attached to high quality material and services, General Mills has been highly efficient in ensuring the most optimal input resources. Consequently, adequacy in input has been a complimentary tool in the company’s activities. (Stalt, 2004)
Perhaps, the company’s activities in terms of efficiency can be attributed in the package of strategies which it has employed in providing an adequacy in its operational activities. However, the same package of corporate strategies had to change to accommodate the changing nature of the company’s production system. These strategies are part of the strategies in management attributed by the company. Through a package of strategies, it has been able to operate efficiently and provide a good level of competition. Many if strategies are aimed at providing attributes of efficiency and therefore optimal costing structures.
Firstly, strategies are of operational capacity aimed at creating various economies if scale. To the company, the use of adequate methods of advertising for its products remains a strong bounds aspect of strategic management. It has employed high standards and methods of advertising for its products. Through adequate advertising campaigns, the company has been able to capture a high number of customers for its products. (Elliot, et al 2002) Among its many advertising techniques are; internet, sales promotion, through television, local newspapers and magazines above others.
Consequently, the company has been able to attract high scale of customers for its products. However, the same advertising methods have used techniques that use low cost variable at a high package of benefit. To the company, marketing has played a predominant role in providing a good package of benefits. Diversity in product output is a compliment of support for its operational efficiencies. The company has been one of the global companies with a broad product range. This has been above 100 in number. Ideally, high product output has been an important tool in defining the company’s risks package.
Broad product range has helped the company to diversify its risks. With the perfectly competitive market within US, it is compounded by both political and market risks. These are attributes that are threat to the operational stability of the company. Political risks are as a result of the political and state governance external shocks that work to affect the business culture in the US. From the various legal and political authorities, operating environment for business has been compromised. Various legal pronouncements as requirements for business have been a threat to the General Mills.
(Barrese, 2003) Market risks have been as a result of the effects born of the forces of competition. Various market place attributes has provided for business performance some concepts which are highly costly to the operational characters of the company. The risk package is a compliment of an increased level of operating cost. With such risks, the company has been at the verge of experiencing operating losses. However, the broad product diversification has been important in providing parameters to look after such costs.
It has helped to capture the cost shocks experienced by the businesses as a result of operating risks. A solid and adequate foundation of the financial accounting has played an important role in the company’s strategies to ensure a high level of competition within the market. The foundations of the financial parameters of the General Mills follows suit to high standards of requirements and international financial and accounting system. Throughout since 2002, structures that ensure adequacy in the accounting system has played subordinate role in providing a good operating environment.
First, its financial reporting and auditing system have followed the requirements of international standards such as the International Standards of Accounting Board (IASB) above that of Sarbanes-Oxley regulations for auditing. Generally, financial accounting plays a predominant role in the management of any organization. To the General Mills, adequacy in financial accounting has been ensured through systems and activities which promote adequacy of proficiency and efficiency in the accounting system. (Stapledon, 1996)
The customer variable has never been overlooked. Like any other business organization, customers play an important role for the company. Various structures have been installed that helps to ensure that customers’ needs and sovereignty are never compromised. Consequently, the sales and marketing department has worked comprehensively to provide an attractive room for customers’ proficiency. Customers have been importance stakeholders for the company. Various structures build on customer rationality and sovereignty has been modeled by the company. (Bannock, 2005)
High competition factor is not solely provided by the variable of commercial activities within the US market. The competition layout of the US grain industry was however affected to accommodate the variables of the changing economic structures in the grain industry. Competition is provided for by the general outlay of commercial businesses despite the diversity in their nature. However, complementarities remain an attributes of consideration within this business environment. At one level, there are many of other companies that produce the same product output as the General Mills.
Compliments in business product imply high level of competition within the market for same product. To cater for the inefficiencies born of complimenting goods, General Mills has ensured high quality product that compete adequately with the others. With the general nature of the perfect competitive market the obesity campaign which was a variable for change in the production function of the General Mills, the same had however to change for the corporation of other variables that grew from the same change in product line. Suppliers play an important role to the company’s inputs.
The change in the production system and output lines called for a diversity of the parameters captured by the suppliers requirements. The change in the product line also implied a change in the input supplies by the suppliers. Various consequences in terms of the quantity and quality of the producty inputs were the result. The supplies could not avoid embracing the changing requirements of input supply in terms of quality and quantity. (Thierauf, 1999) Summarily therefore, the success of the General Mill company can be attributed to the package of operational variables and strategies which ensures adequacy in the business activity.
A rational analyst can therefore comprehend that, the obesity campaign came to provide adequate structures and conditions for ensuring a high level of performance and consequently, profitable activities for the General Mills. Through various protocols of amendment and tools that provide adequacy in the operational layout of the company, success has been inevitable. Consequently, the image of success can be attributed to the diversity in the management accounting tools that provide an environment for adequacy in the company’s performance.
With a continued support into such strategies the future of the company is perhaps brighter.
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