Rafael, Aries V.

2014600135
MFE-5

Case I
Kellogg’s – Using aim and objectives to create a business strategy
Q1. Explain what is meant by a premium brand
- Premium brands offer their customers a combination of supreme quality, value,
purpose in the purchase, and an unforgettable buying experience and makes them
confidence to its customer that they always gets what they want on the product they
get
- Kellog has a 42% market share of the value of the UK’s breakfast cereal market
among with 39 other brands makes them to have distinct premium position within the
market
Q2. Describe the difference between an aim and objective
- Aim : An aim is where the business wants to go in the future, its goals. It is a
statement of purpose.
 Kellogg's aim was to reinforce the importance of a balanced lifestyle so its
consumers understand how a balanced diet and exercise can improve their lives.
- Objective : An objectives are the specific and measurable results companies hope to
maintain as their organization grows.
 Having set an aim, managers make plans which include the right actions. These
ensure that the aim is met. For an aim to be successful, it must be supported by
specific business objectives that can be measured.
Q3. Outline the purpose of Kellog’s work with the ASA
- Kellogg is the main sponsor of swimming in Great Britain. This sponsorship
increases the public perception that Kellogg’s products help to create healthy and
active individuals. This position greatly contributes to Kellogg’s aim of informing
individuals of a healthy balanced lifestyle. They also contributed to the 1.8 million
awards given to swimmers annually, rewarding those who represent Kellogg’s
branded message of healthy-active living.
Q4. Using examples to support your dialogue, evaluate how Kellogg communicates and discuss
how this enabled it to position its brand.
- Kellogg has divided its communications into two categories: internal and external.
Their internal communication is primarily done through a magazine which is given to
all of their employees. This magazine focuses on the goals, aims and objectives of the
 company, how to get active and live a healthy lifestyle and highlights Kellogg’s
involvement in sport and exercise.

- Kellogg’s external communication is done in a variety of ways, but does not reach a
very broad audience. The company uses the back of their cereal boxes to
communicate to individuals that a balanced lifestyle is important to sustainable living.
Kellogg also has pamphlets and leaflets available on their website which outlines
their suggestions for becoming more healthy and active. The company could reach
new consumers by creating television ads on a variety of networks, offering samples
to consumers, and openly sponsoring many more school breakfast programs. Their
current branding methods only reach the consumers that are already using their
products. By expanding to a larger audience the company would be able to generate a
sense of value in new customers resulting in more commitment to the Kellogg brand.

Case II
Mott MacDonald – Creating strategic direction
Q1. Explain the difference between organic growth and acquisition
- The difference between organic growth and acquisition is how each one is obtained
by a business. Organic growth deals with a firm looking inside and using its resources
to find new customers and/or expand what existing customers purchase for the
purpose of growth. In example would be taking existing customers and increasing the
amount of dollars they spent on services. Organic growth results in an increase in
sales and the overall growth customer base. On the other hand, acquisition is almost
the opposite of organic growth and can at times be considered inorganic growth.
Acquisition deals with an organization purchasing an asset, item, or another company.
It still involves the growth of a company.
Q2. What is meant by performance pay scheme?
- By Mott MacDonald having a performance pay scheme it means that employees will
receive a better pay depending on how well the business performs PPS can be based
on a number of variables but is usually focused on revenue or profit. The more the
employees put in and contribute to the business the more money they likely earn.
- I think that the PPS is a great way to run a business because it motivates employees
to produce better work and leaves them more satisfied with their jobs. In addition,
going along with Herzberg's hygiene and motivator factors, employees motivated by
responsibility, recognition, personal growth, and meaningful work. By having PPS
employees feel like they are receiving personal and financial growth from working at
the company, and that they are doing something meaningful.
Q3. Analyse how Mott MacDonald's values influence its business activities
- Mott Macdonald's values influence its business activities by allowing it to expand
beyond being a regular business and complete meaningful projects which increase
their Corporate Social Responsibility. The acronym PRIDE represents the company's
values in making progress worldwide, having respect for everyone without
discrimination, doing their business activities with integrity, being drawn to exceed
customer expectations, and always being associated with excellence and innovation.
The company's values demonstrate the business's overall culture and therefore stand
as guidelines for which business activities the company should participate in next. For
example, since one of the company's values is making progress in the well being of
the planet Mott MacDonald sent an energy team lo help a chemical factory in China
hugely decrease their carbon footprint. They did this by treating its HFC-23 emissions
to cut out the equivalent of four million tonnes of Carbon dioxide each year. This
represents just one example of how Mott McDonald's values influence their various
business activities each year.
Q4. Evaluate how a rolling five-year plan helps Mott MacDonald to identify which projects it
will take on
- A rolling five-year plan greatly helps Mott MacDonald decide which projects to take
on. The five-year plan is an example of "top down" planning and helps the business
decide the direction and targets for the organization. The five-year plan covers all of
the business aspects including financial growth, markets, services, customers,
partners, sustainability, and staff development. By setting goals for future projects
and evaluating them each year it helps the organization stay focused and motivated in
completing new projects. In addition, by laying out a plan of projects and goals the
company is able to easily identify which ones to do next based on global urgency.
Case III
SKODA AUTO – SWOT analysis in action at Skoda
Q1. What was the key weakness that Skoda was able to identify?
- The SWOT analysis was used by Skoda to identify its weaknesses. One of the
greatest weakness identified, which affect the success of the company is its small
market share. Skoda only holds 1.7 percent market share. Because of this, Skoda
remains a small player in the car manufacturing market. Through the SWOT analysis,
management was able to identify this weakness and also the causes of this weakness.
Skoda’s small market share, is attributed to negative perceptions of the consumers of
the brand. Skoda’s heritage as an Eastern European can manufacturer is a subject of
outdated, negative consumer perception. In the past, Eastern European cars had the
image of poor vehicle quality, design, assembly and materials. Because of this
consumers do not purchase Skoda manufactured cars. This poor image also affects
SKODA owners. Because of the negative perceptions of the general public of Skoda
 cars, owners lose their trust of the product. In addition, car ownership is look upon as
something that creates an image of the owner. Car ownership is all about image.
Under Volkswagen AG, the Skoda brand was improved. The goal was to create a new
brand image and consumer perception. Skoda cars started to be seen as not low-
budget or low-quality anymore. However, it has been found that Skoda still had a
weal and neutral image in the mid-market range it occupies, compared to other
players in this area. The persisting weakness of Skoda is unfavorable brand image and
poor perceptions of the cars. Consumers still does not regard Skoda as quality cars.
The company needs to formulate marketing strategies that will focus on the good
qualities of the cars and create a good brand image.
Q2. What strength did Skoda use to turn its brand weakness into an opportunity?
- The strengths of Skoda were identified and assessed by conducting a SWOT analysis.
The company conducted a research involving consumers in order to find out the
strengths of its products and brand. Surveys were also used. The strength of the
company and its products lie in its focus on experience rather than on sales. Meaning,
the company makes sure that there is “human touch” in the production and
manufacture of its cars and make sure that the consumers feel it. Because of this
strength, Skoda was listed as one of the top five manufacturers by JD Power. Skoda
was also awarded by Top Gear in 2007, as the number 1 car maker. The results of
these surveys seem to testify, that the strength of Skoda is its focus on experience.
Skoda focuses on its customers rather than on profits. Skoda knows that 98 percent of
its drivers would recommend Skoda to a friend. This strength is being used by Skoda
to guide its future strategic development and marketing of its brand image. By using
Skoda’s strength as a guide for its future strategies, the company has determined its
main objective which is building cars that their owners would enjoy. The strength of
the company is being used to set the company and its products from its competitors.
The focus of Skoda is not on maximizing sales, like most of its competitors but on
satisfying the customers. Customer satisfaction, therefore became Skoda’s biggest
strength. From the SWOT analysis, Skoda identified its strength, which also paved
the way for an opportunity to differentiate the company and its products from the
competitors. Skoda focused on its existing strengths and provided cars focused on
customer experience. The focus on ‘happy Skoda customers’ is an opportunity. It
enables Skoda to differentiate the Skoda brand. And this sprang up from the
company’s strength.
Q3. How has Skoda strategically addressed external threats?
- Through the SWOT analysis, the company was able to identify the external threats
that may affect the company’s standing in the market and success. One of the biggest
threats to Skoda is intense competition in the European car manufacturing market,
particularly in the United Kingdom. There more or less 50 car manufacturers and
more or less 200 car models comprising the UK car market. This is a big threat
because in an intensely competitive environment, a company like Skoda runs the risk
 of being overlooked by the consumers which will eventually result to loss of market
share. In order to address this threat, the company needed to come up with strategies
that will make it standout in the market. The company believed that in order to not be
overlooked by consumers, it needed to create a product range that will appeal to
different segments. So the company introduced Skoda Fabia (basic but quality car);
Skoda Superb (for the up-market consumers, luxurious); and Skoda Octavia Estate
(for the family, fun drive). The prices of these products coincide with the different
market segments that the company wanted to attract. Another threat is the European
Union’s legal and environmental regulations. This poses as a threat because it can
affect the company’s position in the market place and sanctions imposed by the EU
can affect the performance and reputation of Skoda. In order to address this threat, the
company designed products that are environmentally friendly at every stage of their
lifecycle. This was accomplished by recycling as much as possible, using the latest,
most environmentally friendly manufacturing technologies and facilities available,
designing processes to cut fuel consumption and emissions in petrol and diesel
engines, and using technology to design cars with lower noise levels and improved
sound quality.
Q4. What in your view are the important benefits of using a SWOT analysis?
- It is clear from the case study, the SWOT analysis have been helpful in creating and
formulating strategies for the company. The company relied on SWOT analysis in
getting a clear picture of where the company is now and where the company wants to
go. The SWOT analysis, provided information about the strengths of the company,
which they can use to build a strategic advantage over and a point of difference from
its competitors. The SWOT analysis was also used to determine the weaknesses of the
company. By having a complete understanding of its weaknesses, Skoda was able to
focus on its strengths and to grasp the opportunities that its strengths bring. By using
different tools and strategies in conducting a SWOT analysis, the company was able
to understand its consumers better and to identify their perceptions of the company
and its products. SWOT analysis aided in the clear understanding of the company’s
external environment, particularly the opportunities and threats that the company are
facing. Analyzing the external opportunities and threats allows Skoda UK to pinpoint
how it should target its marketing messages.
Case IV
ASOS THE ONLINE FASHION STORE – Strategic growth in the fashion retail industry
Q1. In what ways can a company benefit from growth?
- Improved economies of scale - Increase in the overall volume of business can lead to
significant reductions in costs.
- Better deals – it will also be able to get better deals from its suppliers through
ordering goods and services in larger quantities
 - Higher profit generation - More will be the sales, so higher will be the profit
generated for the company and shareholders.
- Attract new customers - Moving to larger premises and increasing the resources and
stock help to reach and attract new customers
- Better control over supply chain - If a company grows by vertical integration then it
can either merge with a supplier or a retailer that makes the movement of the product
along the supply chain quicker or provide better control over chain of production
Q2. What do you feel might be the potential disadvantages of very rapid growth?
- Additional costs - A surge in demand generates additional costs. It costs money to
fulfil orders.
- Cash flow difficulties - A business may have to meet many expenses before it
receives the proceeds from the additional sales and this can lead to cash flow
difficulties.
- Logistical difficulties It may run into logistical difficulties and simply lack the short
term capacity to fulfil orders. It may not be able to make products quickly to meet
demand.
- Customer loss - A business that fails to meet demand risks losing customers. It can
take long time to repair a damaged reputation.
- Decrease in quality. The quality of the products and services could drop, causing an
increase in customer complaints
Q3. Describe, using examples, what is meant by horizontal and vertical integration?
- Horizontal integration is defined as coming together of two or more companies which
produce the same or similar goods or provide the same similar services. Horizontal
integration can prove to be a successful strategy when Your company competes in a
growing industry Your competitors are lacking capabilities, skills or resources that
you can provide The economies of scale would have a significant effect.
EXAMPLES
- When the super market chain Morrisons acquired the rival Safeway chain in 2004. it
simply created a larger supermarket chain
- YouTube, which was taken over by Google primarily because it had a strong and
loyal user base.

- Vertical integration is the process in which several steps in the production and/or
distribution of a product or service are controlled by a single company or entity, in
order to increase that company's or entity's power in the marketplace, This is when it
acquires a business at a different stage in the chair of production. may acquire
businesses that were previously its suppliers or its customers
EXAMPLES
 - A furniture manufacturer might purchase a chat of furniture stores so that it can sell
its products direct to consumer
- A soft drink manufacturer company purchasing a soft drink bottle Manufacturer
Company
Q4. What do you feel are the key things that asos.com did in order to achieve managed and
successful organic growth?
- This organic growth has been achieved through systematically planned investment in
both people and technology
Case V
Wilkinson – Marketing strategy for growth
Q1. What is the difference between primary and secondary research? Identify one example of
primary and secondary research carried out by Wilkinson.