On a lovely spring morning in 2018, while giving his kids some ‘Fitness’ cereals, the CEO of Cereal Partners Worldwide S.A. (CPW), Peter P Homer, thinks about how CPW might expand international sales and/or capture further market shares in the saturated breakfast cereals market. Right now, CPW is the no. 2 in the world market for breakfast cereals, but it is a tough competition, primarily with the Kellogg Company, which is the world market leader.
Perhaps there are other ways of gaining new sales in this competitive market? Peter has just read the business best-seller Blue Ocean Strategy and he is fascinated by the thought of moving competition in the cereals breakfast market from the red to the blue ocean. The question is: how?
Maybe it would be better just to take the head-on battle with Kellogg Company. After all, CPW has managed to beat Kellogg in several minor international markets (e.g. in the Middle and Far East).
The children have finished their ‘Fitness’ cereals and it is time to drive them to the kindergarten in Lausanne, Switzerland, where CPW has its headquarters.
Later that day, Peter has to present the long-term global strategy for CPW, so he hurries to his office, and starts preparing the presentation. One of his marketing managers has prepared a background report about CPW and its position in the world breakfast cereals market. The following shows some important parts of the report.

History of breakfast cereals

Ready-to-eat cereals first appeared during the late 1800s. According to one account, John Kellogg, a doctor who belonged to a vegetarian group, developed wheat and corn flakes to extend the group’s dietary choices. John’s brother, Will Kellogg, saw potential in the innovative grain products and initiated commercial production and marketing. Patients at a Battle Creek, Michigan, sanitarium were among Kellogg’s first customers.
Another cereal producer with roots in the nineteenth century is the Quaker Oats Company. In 1873, the North Star Oatmeal Mill built an oatmeal plant in Cedar Rapids, Iowa. North Star reorganized with other enterprises and together they formed Quaker Oats in 1901.

The Washburn Crosby Company, a predecessor to General Mills, entered the market during the 1920s.
The company’s first ready-to-eat cereal, Wheaties, was introduced to the American public in 1924.
According to General Mills, Wheaties was developed when a Minneapolis clinician spilled a mixture of gruel that he was making for his patients on a hot stove.
Cereal Partners Worldwide
Cereal Partners Worldwide was formed in 1990 as a 50:50 joint venture between Nestlé and General Mills (see Figure 1), in order to produce and sell ready-toeat breakfast cereals worldwide outside the US and Canada. CPW has a portfolio of over 50 brands, including Cheerios, Nesquik and Shredded Wheat.

General Mills
General Mills, a leading global manufacturer of consumer food products, operates in more than 30 global markets and exports to over 100 countries. It has 66 production facilities: 34 are located in the US;
15 in the Asia/Pacific region; six in Canada; five in Europe; five in Latin America and Mexico; and one in South Africa. The company is headquartered in Minneapolis, Minnesota. In financial year 2017, the total net sales were US$16 billion of which 15 per cent came from outside the US. The company has 30,000 employees.

Questions
Peter P Homer has heard that you are the new global marketing specialist, and has called you in as a last-minute consultant before a presentation to the board of directors.
You are confronted with the following questions:
1. How can General Mills and Nestlé create international competitiveness by joining forces in CPW?
2. Evaluate the international competitiveness of CPW compared with the Kellogg Company.
3. What kind of competitive intelligence would you recommend CPW collect about Kellogg in order to be better in challenging the no. 1 position?
4. Where and how can CPW create further international sales growth?