Dr Radka Newton, Programme Director, shares her experience of teaching Strategy on the MSc Management.
I have always enjoyed teaching the Strategic Management module. Discussing strategic moves of various companies, scrutinising their decisions, successes and failures and learning to apply a plethora of analytical tools and models to improve my decision-making techniques.
This time I knew it would be different. The well-rehearsed case studies just seemed too boring and out of date and the new ones were only just being written in the midst of the pandemic. My fascination with the disruption of all sectors and industries led me to reach out to Lancaster Executive MBA alumnus (2016) Andy Williams, Revenue Management & Channel Lead at Kellogg Company. I decided to immerse myself in a strategic analysis of this giant heritage company that has been feeding the world for decades with a fairly traditional retail-driven business model enhanced by substantial and a very consistent CSR ethos. Andy agreed to be my mentor and indulge me in debates, arguments and discussions about the recent developments in the world of the crunch! So did it bring out the tiger in me?
First of all, I can tell you that teaching PESTEL sometimes seems like a drag. Students get bored of this framework that comes and goes in almost every aspect of management education. Well, this time I decided to bring PESTEL to life and connect megatrends with national and local challenges and present the food and drink sector as a complex network of government regulations, raw material challenges related to changing climate as well as the distribution carbon footprint. It was simply fascinating to debate these aspects with researchers in this industry, represented by MSc Management graduate from 2020, Joe Yates, who now works in CGA and Jacqueline Jackson, a third generation family entrepreneur based in Carlisle in Thomas Jardine & Co.
The key findings we concluded from our live PESTEL debate were:
• Delivering food to the “last mile” in rural areas and maintaining the carbon footprint is a complex challenge! The context of the external environment translates differently from global to regional and appreciation and deep understanding of our localities is paramount to identify the true strategic issues of a business that is reliant on local distribution channels and affected by global environmental challenges.
• Generalising about COVID positive impact in food and drink spend creates false impressions – the poorer spend less, richer spend more. The social deprivation gap enlarged during the pandemic in places like Cumbria was accentuated by the disappearance of tourism, which took away the rich spend on local food.
• Food and drink industry boundaries are blurred – technology has taken over features of the physical food venues and contributed to dramatic adaptation, which has been unprecedented in terms of creating new partnerships between suppliers and buyers shaking up the competitive forces through new disrupters from different industries.
The implications for Kellogg’s may seem minimal, however bringing some of those aspects to life made Andy and I think more explicitly about the future with increased government intervention in retail practices, Amazon-ization of food, social acceptability of packaging and consumerism with more focus on health and nutrition. Andy also pointed out the challenges related to the demand of new skills in the workforce, related to low skilled job automation contrasted by demand for very specific skills in big data analysis.
What we really spent time on discussing with Andy was the value of the brand. Kellogg’s heritage and established brands definitely create confidence in quality and at a time of being stuck at home and deprived of care-free browsing of retail shelves, brand loyalty should increase even more. External evaluation of the brand strength for Kellogg’s is seen in a recent ranking by the Global RepTrak® 100, which recognised Kellogg’s as the most reputable company in the UK.
Despite all these positive indicators related to brand and reputation, online shopping may actually have the opposite effect. Remember when you tried to get a home delivery slot from your preferred supermarket with your preferred brands and the slots were all taken! Did you resort to clicking simply anything in the panic of food shortage? Well, I did. And at times, the supermarket online delivery selected a supplement for my favourite product and I simply went with it. Even though Kellogg’s have been able to attract new customers and more people have enjoyed family breakfast time in their homes, the challenge will be to maintain this growth and adapt further to the digital distribution channels.
In our live case study, I explored the power of social media and its impact on brand and reputation and became an active LinkedIn follower of the Kellogg Company. Whilst before we would consider such a source of information as complementary, it became obvious to me that data from such sources can significantly contribute to the understanding of organisation culture and the sentiment of the employees towards the brand.
Writing up the Kellogg’s case study with Andy’s input has been a real learning curve. It made me explore such a plethora of sources and data. I wonder whether this may be actually the best way of assessment for this module. We usually ask students to prepare a company report but how about producing a case study?
And at the end of the course we always have a go at proposing some strategic options for the companies we are analysing. I think this year we have felt a bit braver and the students came up with some very interesting options for Kellogg’s that we proposed to Andy in our last online session.
So here are our top three for the Kellogg Company:
1. Kellogg Academy – we are proposing for Kellogg’s to create a learning unit that will increase business resilience in terms of the future reemployment options. Due to the strong organization culture and focus on employee experience, positive and inclusive leadership, Kellogg’s can leverage on this to train their employees as they can maintain their employee engagement as well as minimise resistance to change (student input anonymous).
2. Acquire a health-focused and environmentally-conscious cereal brand, but allow it to be run as a separate business unit under the Kellogg’s umbrella. Having such a brand within the Kellogg’s portfolio should ensure that Kellogg’s complies with government food health/sugar regulations in at least some aspect of its business whilst it explores how it can make its other brands more compliant, and allowing it to be run as a separate business unit should prevent this brand from being too heavily influenced by the Kellogg’s culture and other Kellogg’s brands (student input by Harry Adams).
3. Development of localised raw materials hubs driven by data supporting local suppliers with innovation in agriculture and strong sustainability focus – leverage the data driven capability that Kellogg’s apply to consumer research and apply it to supplier needs analysis. This is an opportunity to explore AI and VR simulations applied to the whole value chain rather than just to the sales aspect of the business (student input anonymous).
Working alongside Andy made me a student of my own course with my very own teacher for about a month before the course started. I went through the same pains and gains as I put my students through and really enjoyed it. Andy challenged my applications of the traditional frameworks and theories and helped me connect the dots, improve my sense-making and master the sense-giving. I listened with my ears opened, I listened to the noise of social media, reports and statistics and Andy’s real-life experience of eleven years in Kellogg’s. I am not sure if I passed… but I hope that we have brought some provocation and challenge to our virtual classroom this year.