Question
Kellogs case study
Review the
"Kellogg's it's a SPECIAL feeling (Links to an external site.)" case,
the paper describing one of Kellogg effort in optimizing its production,
inventory and distribution with the aids of Management Science consultants.
Please conduct additional research on the Kellogg Company and its top
competitors.
1. Research and find out
Kellogg’s Profit and Loss Statement and balance sheets for the last 3 years.
2. Research and find out
Kellogg’s top 2 competitors’ Profit and Loss Statement and balance sheets for
the last 3 years.
3. Compare revenues and
profits for all 3 companies over the last 3 years. Base on the most recent data
you can find from the Internet (i.e.,
Yahoo, Wall Street reports, etc.,) develop financial ratios to analyze and
evaluate the financial positions of these companies. Prepare a summary table of
your findings. Based on your analysis, which company is in the strongest
position financially? in your opinion, what critical results is most important
for improving Kellogg's competitive position? Use General Mills and Tyson foods
as the two competitors
Expert Solution
Kellogg's is among the best
companies producing and distributing breakfast foods. Kellogg's planning system
(KPS) has been effective for over a decade. It involves designing a
multi-period and large-scale linear program to assist in making distribution, operations,
inventory, and production decisions to enhance the business's convenience.
Since its formation in 1906, its aim has been " improved diet and health”
(Brown, Keegan, Vigus, & Wood, 2001). The KPS operational system determines
the appropriate location for product production and the distribution of both
in-process and finished products between the distribution and plant centers. In
addition, Kellog optimizes its production, distribution, and inventory to help
in capacity expansion and decision making (Brown, Keegan, Vigus, & Wood,
2001). The company's supply chain involves coordinating the various operations
in the supply chain, including distribution, transportation of sales,
purchasing, and checking product quality. In 2021, the company's operating profit
was approximately $1.75 billion, slightly lower than the profit made in 2020,
which was $ 1.76 billion (Kellogg Gross Profit 2010-2022: K 2022).
However, there was a significant increase in 2020 as the profit increased from
$1.40 in 2019. Kellogg's balance sheets in 2021,2020, and 2019 were $18 178
million, $17 996 million, and $17 564 million, respectively (Journal, 2022).
Therefore, Kellogg's profit margin has been fluctuating but steady, although it
experiences stiff competition from Tyson Foods and General Mills companies.
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