United Cereal: Lora Brill’s Eurobrand Challenge case study solution

Introduction 

United Cereal, a company which was established in 1910 by Jed Thomas who was an 
immigrant grocer from England. The company launched their first product as package mixed 
of cracked wheat, rolled oats, and malt flakes which was sold in their first shop opened at 
Kalamazoo, Michigan. The united cereal eventually diversified into snacks, dairy products, 
drinks and beverages, frozen foods, and baked goods. In 2010 the united cereal had a business 
of $9 Billion in which the breakfast cereals accounted for the one third of its revenue. 
United Cereal, a company with more than 100 years of experience in the breakfast food 
industry, faced challenges when deciding how to launch its new cereal product. The company 
is multinational and has global experience, but the company's vice president, Lora Brill, is 
actually considering either adapting the Euro brand concept and launching Healthy Berry 
Crunch across Europe, or pushing France is the best option to launch Healthy Berry Crunch. 
The VP must analyze the situation to select the best possible alternative, considering the pros 
and cons of each alternative.

Identification of main issues

Europe has been a difficult road for United Cereal as market trends and customer preferences 
vary widely across the continent. The data suggests that the gap is so large that developing 
sustainable business models will be a challenge. Like United Cereal, most of its competitors 
operate through local subsidiaries, a successful strategy to meet different trends in different 
European countries.
As shown in Exhibits 1 and 2, this level of management decentralization increases cost 
pressures and minimizes company profitability. Europe is not a densely populated region. 
Therefore, different brand positioning in different countries, and different people taking 
responsibility for the success of the brand, have significantly increased costs without 
significantly increasing profitability. To combat this situation, Lora Brill came up with the idea 
of centralizing and implementing a coordinated product marketing strategy that would help 
reduce costs.
In order to succeed in the European market, Brill also developed the idea of a Euro brand team, 
consisting of national brand managers and representatives of centralized functional 
departments (R&D, operations, purchasing, logistics, etc.). With a team leader selected by the 
brand manager. Brill believes that national brands manager will be part of the team. Decisions 
made by this group are therefore owned by the entire team and a coordinated effort is made for 
the success of the Euro brand.
The decision Brill now faces is whether to launch the new product into the French market in 
its current organizational structure, or delay the launch, reassign a new role, and launch the 
product under her Euro brand for the first time.

Analysis 

• The breakfast sector is highly competitive and to keep the company growing and sustainable, Vice President is looking to expand into the European market. 
• Two American companies Kellogg and United Cereal are the two main competitors in the market European market with 26% and 20% market share respectively. Cereal Partners, a joint venture between General Mills and Nestlé, ranked third with 17%, and UK-based Weetabix, followed these leaders with 7%. Many small manufacturers have split the remaining 30% of the market. 
• The consumption of cereals varied significantly across the market. 
• The reason for moving forward in Europe is that the continent generates or contributes 20% of the company's total sales, but the European market itself is highly competitive. 
• In order to sustain growth and successfully launch this new brand, the company's vice president is considering the concept of his brand Euro by simultaneously launching products in different European countries. 
• On the other hand, another option is also being considered, proposing to launch the product in France and conquer the French market if the market shows the potential. 
• Analyse weaknesses and analyse threats and opportunities contextually. 
• The type of consequences United cereal will face when they will launch the new product in the French market with or without making the required changes in the current organizational structure is to be analyzed.

SWOT Analysis 

STRENGTHS:

• France is a healthy country and people there are more of health conscious
• Healthy berry crunch testing was positive 
• The healthy cereal market does not have much competition in France
• If this euro brand succeeds, then they will be able to test and expand further into Europe 
• United cereal already has a presence in Europe 

WEAKNESSES:

• Communication between country managers upper management is weak
• Attempts to create the euro team idea & change the role of the country managers could create tension
• Marketing plans for healthy berry crunch could cost high
• Tastes are forever changing quickly so this healthy food high demand could just be a fad 
• The customers might desire for them to continue this customization and not be responsive to a brand sold the same everywhere

OPPORTUNITIES:

• Market competition is not that muddled and therefore united cereal has a chance to take a large portion of the market 
• With 20% of their total sales coming from Europe, if they can make profit, it will help the company significantly
• Cut costs with spending less on customization and innovation more with euro teams 
• If the products are successful in France, this euro brand could be successful all throughout Europe in the future

THREATS:

• Other companies who the see idea working, they might also attempt to join the market
• The healthy hype seems to be the big thing at the movement. If united cereal does not work fast, they could miss the window of opportunity to succeed
• Time of getting the product started and having growth
• The market is unstable

Strategy’s to be Adopted

What should Brill and United Cereal Do?

• United cereal should create the Euro teams that Brill mentions
• This will cut those costs, allow for more innovation and clearer communication, and a more standardized product
• This model would be the matrix model of business where there are multiple bosses to report information to
• In order to keep the country managers happy, they have to be clear that their opinions will still be highly considered in decision making
• Brill should go ahead and launch in France 
• The demand for a healthy breakfast snack has been proven through testing
• Although it may be costly, this is the best option at the movement for united cereal to try and make profit in France and cut their cost.

Should Lora Brill authorize the launch in France?

• Yes, Brill should authorize the launch in France as it has a high probability of success. 
• The company has great opportunities in terms of: 
• Cost savings of 10-15% on a long run
• Growing interest on healthy products
• Opportunity for gaining markets as on innovator
• Low competition

Should Healthy berry crunch become UC’s first Euro Brand?

• United cereal should procced testing the Euro Brand concept using the healthy berry crunch cereal 
• As it is a product extension it reduces costs and also satisfy customer’s wants and needs
• Consumer taste and preference are changing and old habits are disappearing
• Easier to standardize products nowadays

What kind of organization did she need to put in place to ensure effective 
implementation?

• Necessary organization modification, not only strategic considerations
• United cereal should form a euro brand team for the launch of healthy berry crunch, but wait on forming teams for other brands 
• As Brill proposed:
• Expand the responsibilities of the regional vice-president, in addition to managing subsidiaries by region they would also have Europe wide coordination responsibility some of product. 
• Not reducing the responsibilities of county managers, Vice President would have an advisory role

What are the implications?

• Restructure required to make such a move successful, deeply defines the values and organizational culture the company has stood
• Modification of organizational structure: entrepreneurial spirit and the autonomy the regional managers are known to have 
• Consumption trends have been changing throughout Europe: it’s easier to standardize products now
• The company would take a much more decisive step towards the biggest trend in food market globally
• Healthy food approaches: this strategy also promotes and encourages the consumption of healthy food for the rest of the population, which ultimately leads society to a healthier living.

Implementation Plan for United Cereal

• Explain the country managers their new roles 
• Make the Euro Teams for the product
• Launch a marketing strategy for healthy berry crunch in France 
• Analyze the success of the product 
• If the product performs well begin testing in other countries of Europe, then use the euro team from there to spread the product all over the Europe.

CONCLUSION

The decision that Lora Brill now faces is whether to launch the new product into the French 

market in the current organizational structure, or delay the launch, reassign a new role, and 

launch the product under her Euro brand for the first time. 

The company United cereal’s vice president should go ahead with the launch of their new 

product that is Healthy Berry Crunch with the ideology of creating Euro brand team, consisting 

of national brand managers and representatives of centralized functional departments. With a 

team leader selected by the brand manager which believes that national brands manager will 

be part of the team. Decisions made by this group will be therefore owned by the entire team 

and a coordinated effort will be made for the success of the Euro brand. But the vice president 

should wait for Euro brand team’s success before creating the brand team for the other brands. 

This case study will help you to understand and identify the problems or consequences that an 

organization faces when they are introducing a new product in the market. Also, the necessary 

changes that are to be made in the organisational structure in order to make an efficient and 

effective team to work and make the new product perform well in the market despite having a 

tough competition with existing market players.