1))) Grand Strategy Selection Matrix (GSSM) is a viable tool utilized to identify a strategical approach regarding growth and competitive stance. These four quadrants include; strong competitive position, slow market growth, rapid market growth and weak competitive position (Grand Strategy Matrix, 2011). General Mills, an established diverse company that has grown increasingly over the past 40 years by shifting strategies by branching out to diverse markets and capitalizing on new demographics.
Quadrant One fits best with General Mills current market position. Companies that fall within quadrant one has a strong competitive advantage. General Mills is one of the largest players in the food production industry, producing a vast array of their products which help generate $15.78B last year and a projected 7% increase for 2019 (General Mills Revenue, n.d.). Second their market concentration has diversified with the natural/organic and pet food surge. Recognizing that the need capitalizing on items other than yogurt, cereal and flour to name a few. General Mills has shifted to new strategies for new product development is meeting the need of the consumer base and helping to bolster their sales. This is achieved in part for their excessive resources. A big push for sustainable farming and responsible logistic resources is a pressing matter that Jerry Lynch is laser focused on. He is the Chef Sustainability Officer (CSO) for General Mills. Climate change, ecosystems, food waste and water stewardship measures fall under his accountable objectives. 2019 helped see a 13% drop in greenhouse emissions, an investment of $4M in soil/health initiatives and a 85% increase of their 10 primary ingredients being sustainably sources. The major benefit to quadrant one organizations is their ability to take advantage of the external opportunities and amplify capital in their varied business transactions (Grand Strategy Matrix, 2011).
General Mills Revenue 2006-2019. (n.d.). Retrieved July 31, 2019, from https://www.macrotrends.net/stocks/charts/GIS/general-mills/revenue
Grand Strategy Matrix. (2011, September 06). Retrieved July 31, 2019, from https://mba-tutorials.com/grand-strategy-matrix/
Leadership and Governance. (2019). Retrieved July 31, 2019, from https://www.generalmills.com/en/Responsibility/Sustainability/leadership-governance
2.))) The Grand Strategy Matrix is another means of classifying a corporation’s approach to compete within the market. It divides the environment into four quadrants based upon the rate of market growth, slow versus rapid, and the corporation’s relative position, strong versus weak (Kasi, 2012). A strong competitive advantage is one in which the company has the means to outperform its competitors with the same amount or resourcing. As an organization with real competitive advantage in an industry that is experiencing some decline, General Mills’s strategy is currently positioned in the Quadrant IV classification.
The cereal manufacturing industry, in which General Mills hold 22% of the market share, is projected to suffer a general decline of 0.5% per year over the next five years (Smith, 2019). It is anticipated that consumer preference will shift towards healthier alternatives and also purchase less food for home meal preparation. Despite a recent revenue rate decline of 1.3%, General Mills continues to offer many strong brands that compete well within the market (General Mills, 2018). Consumer brand loyalty helps to give General Mills an edge.
Grand Strategy Quadrant IV is partially defined by corporations that need to seek and or create their own growth opportunity. Typically, this is realized as a diversification within the market itself or expansive diversification into related products. General Mills is following this tactic with a drive towards innovation with existing food goods; which includes pushing certain product lines towards healthier and non-sugar-based ingredients. Additionally, the company is pressing forth with adding new organic food lines and yogurt-based foods. Furthermore, it is expanding its ice cream and Nature Valley lines (Zacks Equity Research, 2017). This robust investment into current products plus newer goods is an indicator that General Mills is either attempting to get ahead of the competition to match changing consumer preferences while also building growth opportunities within a market that is experiencing anemic growth at best.
General Mills. (2018). Fiscal 2018 Annual Report, General Mills, Inc. Retrieved from https://s22.q4cdn.com/584207745/files/doc_financials/2018/annual/FINAL-2018-Annual-Report.pdf
Kasi, A. (2012). Grand Strategy Matrix. MBA-Tutorials. Retrieved from https://mba-tutorials.com/grand-strategy-matrix/
Smith, S. IV. (2019). Cereal Production in the U.S. IBISWorld Industry Report 31123, Retrieved from IBISWorld.
Zacks Equity Research. (2017). General Mills’ Fiscal 2018 Global Strategies to Drive Growth, Zacks Equity Research. Retrieved from https://www.nasdaq.com/article/general-mills-fiscal-2018-global-strategies-to-drive-growth-cm815592
3.))) The Grand Strategy matrix formulates two dimensions creating alternative strategies between strong and weak competitive positions and rapid and slow market growth on four different quadrants (Francis, 2014). Each quadrant contains different sets of strategies to maintain a competitive edge, and a set of actions intended to gain the best position i.e. quadrant I. In terms of where General Mills business fits between the four quadrants of the GSSM, we can determine that the firms fall in Quadrant II. In this quadrant, businesses exploit rapid growth strategies when they have a weak competitive position versus other competitors in their industry (Johnston, 2019). Based on their 2018 initiatives of competing across all geographies, differential growth and reshaping their portfolio, General Mills has taken a more aggressive approach to achieve competitive advantage despite headwinds affecting their sector. Their latest quarterly report shows they have remained strong with a 7 percent increase in net sales for the fiscal year 2019 however, their organic net sales have remain flats since 2018. In addition, their North America segment organic net sales decreased by 1 percent. Although trends seem to be repeating their past year with slight improvement, General Mills has taken action demonstrating growth on other segments. General Mills acquired Blue Buffalo Pet Products to leverage its scale and expand distribution of pet food business. Additionally, they divested their Green Giant brands to increase their profit margin (General Mills, 2019). Even though General Mills faces an uphill challenge, the company’s outlook shows steady growth long term as they develop means to effectively target the North American segment and boost their organic sales.
Francis, A. (May 19, 2014). Strategic Management. MBA Knowledge.com. Retrieved from https://www.mbaknol.com/strategic-management/grand-strategy-matrix/
General Mills (May 27, 2018). Form 10-K Annual Report. Retrieved from https://s22.q4cdn.com/584207745/files/doc_financials/2018/annual/FINAL-2018-Annual-Report.pdf
General Mills. (May 26, 2019). Form 10-K Annual Report. Retrieved from https://d18rn0p25nwr6d.cloudfront.net/CIK-0000040704/0fd13703-8eed-4b60-b46c-b2b3199887dc.pdf
Johnston, K. (2019). How to Develop a Grand Strategy Matrix. Small Business Chron. Retrieved from https://smallbusiness.chron.com/develop-grand-strategy-matrix-37514.html
Pinto, M. (Mar 6, 2018). General Mills: Another Struggling Packaged-Food Company. SeekingAlpha. Retrieved from https://seekingalpha.com/article/4246657-general-mills-another-struggling-packaged-food-company