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European Cereal Market Alliance

The document discusses the formation of the Cereal Partners Worldwide (CPW) strategic alliance between Kellogg's, General Mills, and Nestle. It notes that in the early 1990s, Kellogg's dominated the European cereal market, while General Mills wanted to enter but faced tough competition. So General Mills allied with Nestle, the largest food company in Europe, combining Nestle's brand name, plants, and distribution with General Mills' cereal technology and marketing expertise. This alliance, CPW, was a grand success, gaining 25% market share and becoming the #2 cereal company in Europe through shared risks, knowledge, and competitive advantages of the strategic alliance.

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siddharth
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141 views5 pages

European Cereal Market Alliance

The document discusses the formation of the Cereal Partners Worldwide (CPW) strategic alliance between Kellogg's, General Mills, and Nestle. It notes that in the early 1990s, Kellogg's dominated the European cereal market, while General Mills wanted to enter but faced tough competition. So General Mills allied with Nestle, the largest food company in Europe, combining Nestle's brand name, plants, and distribution with General Mills' cereal technology and marketing expertise. This alliance, CPW, was a grand success, gaining 25% market share and becoming the #2 cereal company in Europe through shared risks, knowledge, and competitive advantages of the strategic alliance.

Uploaded by

siddharth
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd

Cereal Partners Worldwide Strategic Alliance

1) Kellogs the only player in the European market.


2) Early 90s , demand for breakfast cereals in Europe
emerged.
3) Contributing Factors- Thriving super markets and dual
income families.
4) Other factors- Television ads, brand awareness through
media

General Mills and Nestle Alliance

GM in US like Kellogg's in Europe


Early 1990s , Kellogg's occupied 50% of the
European market.
"Tough Battle" for GM.
GM decided to ally with Nestle, the largest food
processing co. In Europe.

Advantages of the ally

Nestle
Brand name
manufacturing plants
Distribution network

General Mills
Knowledge of cerelas technology
Marketing cereals

CPW- A grand success

Each company put in 80 mn US $ to start the


firm.
CPW controlled 25% market share
Number 2 in Europe right now in cereal
technology

Advantages of Strategic alliance

Ease of market entry

Shared risk

Shared knowledge and expertise

Synergy and competitive advantage.

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