General Mills Case study

2671 WordsDec 14, 200811 Pages
To: Mr. James Bell, CEO Operations Manager Date: December 14, 2006 Subject: Industry Analysis EXECUTIVE SUMMARY In 1989, the General Mills management team became aware of expansion opportunities in today’s environment of globalization. The stagnation in the cereal market in the United States required the company to expand into new global markets. The philosophy of diversification had for the most part been a success resulting in the expansion into five unrelated industrial areas. Historically the companies’ efforts to branch into some areas outside the food area are of concern. These unrelated areas of growth have been unsuccessful. The resulting financial losses were an impetus of anxiety and concern to the shareholders and brought forth Wall Street skepticism. It is my opinion that the strategic planning process is flawed. Corporate strategy is and must be the overall managerial game plan for a diversified company; it extends companywide, an umbrella over all a diversified company’s group of business. The crafting of corporate strategy for a diversified company involves four kinds of initiatives and it is evident that these initiatives are successful in related industries since these market related acquisitions have resulted in a net profit increase. Management must be aware that the overall responsibility of corporate strategy is the responsibility of all corporate managers. Senior corporate executives normally have lead responsibility for devising corporate strategy and for choosing among whatever recommended actions bubble up from lower level managers. Key unit heads may also be influential, especially in strategic decisions affecting the businesses they head. Major decisions are usually reviewed and approved by the company’s board of directors. This portion of strategy formulation is on track. The losses incurred are in my opinion a two prong

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