United Cereal is one of the leading cereal producing company having its subsidiaries in Europe and USA. Ms. Lora Brill, the new European Vice President of UC is facing a threat from UC’s major competitors in the French market. We have been asked to draft the results of our study regarding the suitability to react to the actions of the competitors based on the SWOT and PESTEL analysis.
After the SWOT, PESTEL and careful financial analysis, there will be so many damaging impacts if the product is launched. As shown in Exhibit 3, there is a drastic decrease in the shares % from the September to November and so as the case in the shipment. Around 30% of the customers were not concerned. Longer the product takes to be tested, higher the development cost. Rumors could be more devastating about the launch of the rival’s product before the UC. Although, the French have shown great interest in the category of the product. At a date there is only one competitor in the market, i.e. the chances of high growth can be expected. So, the product should be launched in the designated market.
UC is the decentralized form of organization means they have given full authority with responsibilities to their subsidiaries, which had created problems in the past, although the CMs’ don’t have right to lunch or cease any product in their regions. They can carry on with this strategy but on the other hand, make CMs responsible for any unauthorized alterations in the product type without prior permission, which may lead this project the first Eurobrand.
Launching Eurobrands may possibly lead to a potential loss in research and development in testing, potential customer dissatisfaction is yet another threat. The launch will cost around $25 to $30 million, which is quite more than the approved level of budget. Launching Eurobrands, UC will be able to save around 10% to 15%. With the presentation of this idea, it will give UC a strong market reputation.
So, the recommendation is that United Cereal should launch the product in the French market since the study and research appealed that the advantages are greater than harms........................
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