Weetabix Acquisition by Post Holdings: A Case Study in Business Expansion, Assignments of Strategic Management

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South Wales University Strategic Analysis; Tools and Techniques (18393) Assignment (1) Week Post Holdings buying Weetabix By Adel Ali Elshaibani 74110359 Supervision Dr. Juston Mubwandarikwa

Introduction: Each business has always desired integral development and expansion. To understand this, it has become valuable for companies to come up with new solutions to thrive, grow market shares, and dramatically increase shareholder value. To gain competitive advantage by continually and persistently striving to develop strategies that will help to grow and expand their businesses through acquisition, merger. Furthermore, the merging is used by companies as a strategy for involving in new markets and for increasing their market share. Nevertheless, mergers are one strategic approach to organizational development, the fulfillment of business goals and productivity, according to Shlomo Y Tarba, Sir Cary L. Cooper, Riikka M. Sarala (2016). Post Holdings Inc. is an American company that manufactures, markets, and sells various cereal products. Post Holdings INC. As a strategy for its growth, it takes over the acquisition of other food industries. It bought $1.76 trillion from Weetabix in 2017, which is part of the UK and African markets. That amount is now growing more and more in trillions, according to ft.com (2017). This article provides a critical evaluation of Weetabix 's recognition by Post Holding. It also looks objectively at the competitive role of companies and their stakeholders, the related internal and external impacts on firms, and the cereal breakfast industry. We will also use Porter's strategic analysis model to review the strategic position of Weetabix. The map of Weetabix stakeholders we will discuss, and the two PESTEL studies and Porter's Five Forces in the companies will be executed by the author to investigate which affects their environmental profitability.

Figure(1): Porter's generic strategic model Source: images of strategy Stephen Cummings and David Wilson Costs management means simply charging the industry's lowest price. That is to say, to increase profitability and business growth, the organization would reduce sales in other countries. The purchase of Weetabix by Post Holding increases the synergy of the group. To gain advantages from other cereal industries, Post can choose to control and reduce the cost of production or sale price. A company focuses on a focused strategy to sell its products to a particular segment of the market or a given type of client. The focus strategy is ideal for small enterprises and enterprises with differentiated products. The company goods are unique, more desirable, and distinct in their differentiation strategy from their rivals. For markets with little competition and little price sensitivity, this strategy is more effective. Weetabix mainly used its strategy of differentiation to sell its goods globally, especially in China, Great Britain, Mexico, and Africa. For example, in 2013, the Weetabix products were introduced to consumers that do not value cereal breakfast. Weetabix Biscuits and 'Weetabix on the go' products. SWOT / TOWS Analysis Literature Review A SWOT analysis assesses the existing strengths and vulnerabilities of a company and its potential prospects and risks. The organizational review used to determine the organization's finances, strengths, expertise, and strategic advantages. The outside analysis identifies market opportunities and

threats by examining the resources of competitors, the industry environment, and the environment. Tanya Sammut-Bonnici (2015). SWOT analysis aims to leverage and articulate an approach based on the awareness of a company in the internal and external environments. This article provides a toolkit for SWOT analyses that offer concrete guidance into how business decisions developed for the Weetabix case. Analysis of Internal Strengths and Weaknesses In identifying the source of competitive advantage, the internal investigation of the organization is crucial. That leads us to explain the foundation of the company. Bennison Osbourne and Malcolm Mac Farlane, the British and African Cereal Co Ltd., was founded in August 1932 by a UK breakfast cereal specialist. Your first deed? To start production of a revolutionary new grain – Weetabix, it acquired a disused flour mill at Burton Latimer. A couple of years later, in 1936, Weetabix limited changed its name. Frank George joined the board as director and started a 70-year partnership with the George family. Then, in 2013, Weetabix On The Go introduced breakfast drinks with all the sugar, fiber, and protein of a traditional Weetabix with milk *, to people with great exercise. Since then, Weetabix On the Go Protein drinks had extended, weetabixfoodcompany.co.uk (2020). Moreover, considered a global business that operates in over 80 countries, according to BBC (2017), and Vitale (2016) reports that Weetabix produced revenue of GBP 410 million which, as Reuters (2017) claimed, was not as much above 2015. That explains the company's growing income and market share in sold steps. Vitale said that the multiple was higher than its previous

manufacturing costs would rise due to the diverse nature of activities in various countries. However, this is a complicated image. Exporters are importers themselves, such as cereal makers, who buy the raw materials themselves. Giles Turrell Weetabix 's CEO reported that Weetabix had plans to handle the falling pound, while rates can escalate. Grocer.co.uk (2017). These include the legislation and regulations enacted by political authorities, such as health and safety law, employment law, and the data protection law. Post Holdings must comply with local and international laws and legislation for the industries, such as the United Kingdom Jobs Law as amended to raise the minimum wage for the varying ages of the workers. SWOT analysis The Post Holding's internal and external monitoring is outlining in the SWOT matrix in addition to the TOWS report, which outlines potential approaches to be pursued by an organization to deal with the perceived risks and opportunities [Figure ?] Figure ?: shows SWOT analysis for Weetabix company. Helpful: at achieving objective Harmful: at achieving objective Internal Origin Origin Strengths (S): 1 Predominantly variable cost structure. 2 Supplying materials available 3 Quality recognition (loyal customers) 4 Premium design and packaging Weaknesses (W): (1) High price of Acquisition (2) Lack of patent for fruit bars whose quality is recognized (3) High-calories product compared with fresh fruit or vegetables. Opportunities (O): (1) Breakfast cereals growing popularity (2) Recognition of Weetabix brand abroad (3) Trend for protein and fiber Threats (T): (1) Fruit and natural snacks products may undermine profits (2) Growing competition in the cereals market (3) Potential entry of well-

To take advantage of international markets, such as the UK market, post holders may exploit the Weetabix brand origin stamp. In addition to the protein and fibrous content of Weetbix goods, we also benefit from the increasing success of cereal breakfast. Post Holding will also consider increasing production volume through Weetabix manufacturing systems to cope with existing and future competition to minimize unit cost and to secure a patent on its cereals and on-the-go products. Analysis of Stakeholders: Stakeholders are individuals, groups of people, entities, or outside organizations involved in the growth and development of the business. The success of the organization on the market worries them. Any association or person that can control or is affected by the achievement of an organization's objectives is a stakeholder, as defined by Chinyio, E. and Olomolaiye, P. eds. (2009). Also, Andrew L. Friedman, and Samantha Miles (2006) submitted that stakeholders are groups of people or individuals with involvement or participation in an entity, such as shareholders, creditors, clients, suppliers, workers, and public authorities, etc. The merger decision will influence the bulk of the stakeholders Weetabix and Post Holdings, such as staff, creditors and vendors, etc. Extern (4) Steady interest in more premium-positioned snacks in general breakfast manufacturer competitors with a significant competitive advantage

opportunities. PESTEL is a technical tool for the measurement of a company's environmental impact. Figure(2): PESTEL ENVIRONMENTAL ANALYSIS DIAGRAM Source: Formulation of a Systemic PEST Analysis for Strategic Analysis by JOSEPH KIM- KEUNG HO Political Environment Such consists of international forces that affect corporations strongly. For example, after a minimum pay rise in the UK (UK annual report 2017/18), the

purchase of Weetabix happened. It will also increase the manufacturing costs of the business and therefore increased productivity. Besides, there will be an increase in Weetabix costs in terms of insecurities created by Brexit, the reduction in the British Pound value (Linda Yueh, 2017), and the complication of operations in different countries. Higher prices contribute to fewer profits because consumers usually waste energy. For starters, CEO Weetabix said the firm has plans to withstand the falling pound, while rates could increase. Economic Environment Those are the economic impacts on businesses and the implications on the potential financial outlook of possible adjustments. Conditions include economic factors, exchange rate, tax, sales, inflation, minimum wage, interest, etc. After the purchase of Weetabix by Post Holdings, Thomas Sampson (2017) revealed that the United States economy was rising at 2. percent while the United Kingdom economy grew at 0.4 percent. Additionally, they would have specific external economic effects such as taxes, due to the multinational existence of corporations and their inter- country trading links. Throughout Asia, eastern Africa, and North America, for instance, Weetabix exports to eighty different nations and their factories. Many economic conditions, including interest rates and variations in exchange rates, impact foreign companies. Social Environment

Post Holdings consumers will now be able to learn about main post items conveniently and efficiently through technical tools such as e-commerce and internet technology. Finally, Shaowei He (2017) said that Weetabix plans to use technological know-how to recognize developments and engage in creativity in others to satisfy the needs of its clients. Ecological influence The effect of environmental effects on strategic planning and decision-making in businesses has been substantial. In other words, Post and Weetabix should seek instead to use recyclable and environmentally safe packaging materials, while taking care of climate change and the manufacturing process emissions, by the environmental friendly PUs and other non-recyclable packaging materials. Legal environment It includes the rules and regulations passed by government bodies, such as health and welfare legislation, work rules, and data privacy acts. Post Holdings must abide by domestic and international labor and job market laws and legislation, as amended by the United Kingdom Jobs statute, aimed at increasing the minimum wage for various ages. Study of inductivity O García, SI Johnson, K Seltzer (2017), note that the industry consists of a group of companies that produces the same products or services. An essential aspect of the competitive roles research is the study of the market

environment. Michael Porter's Five Forces concept is a competitive tool that demonstrates that one sector is more profitable than another. Porter claimed that both the 'industry environment' and the 'in-competence' are factors influencing the competitiveness of a company. Figure(3): Michal Porter's Five forces framework Source: ResearchGate.net The diagram above seeks to classify certain factors that affect their competitiveness in the cereal industry in the case of Post Holdings and Weetabix. Vendors power The abundance of goods found in well-maintained fields about fifty km from Weetabix 's headquarters in Burton Latimer, wheat is the primary raw material used in Weetabix and Weetabix flour suppliers. Weetabix, though, may involve improvements in weather conditions to invest in agricultural wheat production science. Eventually, because of the high volume of wheat in its

market of China and invest in alternative products to reduce the replacement product burden on its goods. New Entrants Threat It refers to the menace of new competitors entering the market and adding to the current competition. Many firms may have gained large profits from existing business entrants to enter the industry. As new competitors join, they must aim to have a foreign market share, which is sufficiently high to be competitive. The least-cost product could be a tactic the new competitors could use to gain a market share. It means the costs are smaller than those currently in practice. Weetabix and other existing firms have achieved substantial market share, quality of products, economies of scale, consumer satisfaction, established sales system, and recognized customer needs. The industry has been rough in the face of new entrants. Competition Market markets are affected by the rivalries between competing companies in the industry. Those force competing competitors to sell consumers their goods at a lower price compared to other suppliers and the quality of the commodity. It keeps the industry's productivity very small. There are many existing cereal companies such as Kellogg, Nestle, Post Holdings, General Mills, and Quaker as the rivalry of the breakfast cereals industry.

These firms are attempting at various times to achieve a larger market share by launching new goods and offering discounted prices to large-scale consumers. Through the launch of new brands, robust promotions, and client partnerships, Post Holdings must maintain and boost its market share as well. Conclusion Post Holdings and Weetabix are both formidable organizations in the cereal breakfast business, and the purchase of Weetabix by Post would result in an internationally recognized branded Institution. Weetabix's strategic strategy analysis shows that as J Knoerich,and T Miedtank (2018), claimed, its acquisition is supposed to be beneficial for the owners and brands of both firms, resulting in quick market penetration and growth for all kinds of their products.

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