General Mills is a U.S.-based company that manufactures food products and operates on a global scale. The company has over 100 brands in more than 100 countries, and its corporate objective is to satisfy various existing and emerging customer needs. To achieve this goal, General Mills invests in research and development and is in a constant search of new products. Although the company pays much attention to reducing its manufacturing costs, its main strategic choice at the corporate level can be characterized as differentiation.
The company puts much emphasis on customers’ needs and further growth. Its corporate strategy is called Customer First, which means that its purpose is to satisfy the needs of consumers, thus bringing benefit to them and the whole community (General Mills, 2018). Another strategic choice is effective competition in all fields, including brands, innovation, and geographical locations (General Mills, 2018). General Mills demonstrates market growth; for example, in 2018, its e-commerce grew by 50% (General Mills, 2018). However, the company does not want to stop there, so it includes accelerating growth in the list of its strategic choices.
General Mills’ Corporate-Level Strategies
According to Porter’s framework, a company can put an emphasis on one of the three generic strategies to achieve a competitive advantage. These three generic strategies are cost leadership, differentiation, and focus (“Porter’s generic strategies,” 2007). Organizations that choose the strategy of cost leadership usually focus all their efforts on reducing costs by giving up costly activities and manufacturing processes and developing mass production and distribution (Akan, Allen, Helms, & Spralls, 2006). As for General Mills, it struggles to make its manufacturing more cost-effective. Moreover, it has been successful in doing it since cost-effectiveness has become one of its competitive advantages (Barnes, 2018). Nevertheless, it cannot be said that cost leadership is the generic strategy that the company follows at its corporate level.
The focus strategy is also not characteristic of General Mills. Firms choosing the focus strategy concentrate their efforts on a specific market segment or geographical area (Akan et al., 2006). This strategy can be combined with either low costs or differentiation (“Porter’s generic strategies,” 2007). As for General Mills, it does not target its goods at a narrow segment or specific location. Instead, it manufactures food products intended for different segments of the population and sells them across the globe.
An organization should not adopt more than one of Porter’s generic strategies. They are mutually exclusive because, if a company wants to achieve excellence in its industry, it has to direct all its efforts toward one objective, i.e., one strategy (Ormanidhi & Stringa, 2008). It may be concluded that General Mills’ selected corporate strategy is differentiation. The purpose of differentiation is to develop products with unique properties to satisfy customers’ needs better than competitors (Akan et al., 2006). Companies that employ differentiation aim at setting their products apart from those of their rivals, thus creating value for customers.
It is exactly what General Mills does; the company invests in research and development to invent new products and manufacture products that would be in demand among consumers. For example, General Mills was among the first to offer its customers gluten-free food products, which distinguished it from its rivals. Furthermore, a great variety of brands belonging to this company is also characteristic of the differentiation strategy. According to Jeff Harmening, the company’s CEO, General Mills follows the “Consumer First strategy,” meaning that it tries to identify customers’ needs and satisfy them as fully as possible (General Mills, 2018, para. 2). Thus, it may be said that General Mills’ strategic choices align with Porter’s differentiation strategy.
General Mills’ Position in the GSSM
The GSSM views the position of any company with regard to its market growth and competitive strength. Considering these parameters, General Mills can be placed in the first quadrant of the GSSM. This quadrant encompasses firms with a strong competitive position and rapid market growth. General Mills belongs to this category of companies because it has sustainable competitive advantages, and its market is still growing.
Among factors that contribute to General Mills’ competitive position, there is a brand value. The firm has a large portfolio of different recognizable brands that distinguish it from its competitors (Barnes, 2018). These brands, in their turn, help the firm to grow its market share. For example, such brands as Betty Crocker, Pillsbury, and Nature Valley have led the company to possess 50% of the domestic market of baking mixes and 40% of granola snacks (Barnes, 2018).
Another competitive advantage of General Mills is cost-efficiency, which is achieved with the help of extensive producing and distributing networks (Barnes, 2018). It allows the company to manufacture and distribute goods at a lower price than competitors. As for the market growth, the company reports that its e-commerce business, for example, increased by 50% in 2018 (General Mills, 2018). The firm intends to accelerate its market growth even further, which places it in the first quadrant of the GSSM.
Akan, O., Allen, R. S., Helms, M. M., & Spralls, S.A. (2006). Critical tactics for implementing Porter’s generic strategies. The Journal of Business Strategy, 27(1), 43-53.
Barnes, S. (2018). Intrinsic value assessment of General Mills, Inc. (GIS). Web.
General Mills. (2018). General Mills details global growth priorities at company’s annual investor day. Web.
Ormanidhi, O., & Stringa, O. (2008). Porter’s model of generic competitive strategies. Business Economics, 43(3), 55-64.
Porter’s generic strategies. (2007). Quick MBA. Web.