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Case Study

Kellogg: Localizing foreign entry mode

By David Bach, Niccolò Pisani and Lisa Simone Duke

11 pages

August 2021

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Reference: IMD-7-2269

For more than 100 years, the Kellogg Company of Battle Creek, Michigan, had sold its breakfast cereals around the globe to consumers. With mounting competition and changing consumer tastes, the company had entered into new segments such as snacks and crackers and other types of convenience foods, including frozen foods. While initially focused exclusively on organic growth via opening sales offices and production facilities, the company changed its approach and began to leverage growth through acquisitions from the 1970s on. By 2021, Kellogg operated a portfolio of 23 brands in 180 countries with 21 production facilities. While North America remained the largest source of revenue, international revenues accounted for 40% and continued to grow, particularly in the Africa, Middle East and Asia (AMEA) region. While Kellogg’s expansion led the company to establish a truly global footprint, it faced challenges along the way, especially from the necessity to adapt its market entry strategies to local tastes and habits around the world. Growing internationally and selecting the right entry mode appeared even more crucial to remain competitive in a post-COVID-19 world. Yet, as it had experienced, international expansion was not entirely straightforward. Moreover, Kellogg’s global e-commerce was already on the rise pre-pandemic. By the end of 2020, Kellogg’s online sales—which consisted primarily of sales conducted via other retailer websites such as Amazon—accounted for nearly 10% of its global turnover. With about 30% of its global e-commerce sales coming from outside the US, would international consumers’ increasing usage of digital channels reshape Kellogg’s global footprint? Where and how should Kellogg expand next?

Learning Objective

Analyze the extent to which international expansion can be instrumental to Kellogg’s growth and success in the marketplace
Examine how a company such as Kellogg should select its market entry strategies based on changing local tastes and requirements
Explore how companies such as Kellogg can create value via their global presence
Explore how digital retail channels can transform the operations of companies such as Kellogg and their engagement with consumers

Keywords

Strategy, Market Entry, Global Strategy, International Strategy, Internationalization, International Expansion

Settings

World/global, United States of America
Kellogg, Consumer Goods, Food and Beverage
1922-2021

Type

Published Sources

Available Languages

English

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This case study is part of a series

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Kellogg: Localizing foreign entry mode
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