The Ready-to-Eat Breakfast Cereal Industry in 1994

1. Why has RTE cereal been such a profitable business?  What changes have led to the current industry ‘crisis’?

 

2. Why have private labels been able to enter this industry successfully? How do the cost structures of private label and branded cereal manufacturers differ?

 

3. What does General Mills hope to accomplish with its April 1994 reduction in trade promotions and prices?

 

 

4. What are the risks associated with these actions?  How do you expect General Mills’

competitors to respond?

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…………………Answer Preview……………….

current industry crisis?

RTE cereal has been a very successful business since it was started in the year 1894. There were a lot of things that made this business to enjoy profitability in the industry. One of it is the fact that the three leading companies were able to deter other companies from entering the market. This ensured that the level of competition was reduced and the companies that were in operation at the time were an oligopoly…….

APA

806 words

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