The Cereal Industry
Executive Summary:
The cereal market is a booming industry. It has been around for over one hundred years and continues to attract millions of customers’ everyday. The market structure of the cereal industry is an Oligopoly. This is because there are four large firms, Kellogg, General Mills, Post, and Quaker Oats, which dominate the industry.
There are also a few small firms who are involved in the cereal industry as well. The cereal industry targets all different age groups from young kids to adults. They also target people who try to eat healthy. Their main pricing strategy is price discrimination. They use this by handing out coupons, so that people can get their cereal at a discounted price.
Price competition is rarely used in the cereal industry, and when it has been used it has been unsuccessful. Finally, there is a lack on competitors in the industry do to two large barriers to entry. This is accounted for when performing a Porter’s Five Forces analysis within the industry. These barriers are due to the lack of money for proper advertising and the brand image that many of the top cereal companies have already established. Kellogg, General Mills, Post, and Quaker Oats will continue to dominate the cereal industry for many years to come.
Top Cereal Producers
Manufacturer 1999 2005 2008
Kellogg's 32% 32% 33%
General Mills 31% 26% 25%
Post 16% 15% 15%
Private Labels 8% 14% 14%
Quaker Oats 9% 6% 7%
Malt-O-Meal 3% 5% 5%
All Other 1%
Purpose: The purpose of this analysis is to take a closer look at the cereal industry. In order to do so it is necessary within this analysis to identify the market structure of the industry. It is also imperative to recognize the main competitors within the industry in order to calculate the market share of the main companies that dominate the current industry. I will also conduct a Porter’s Five Forces analysis on the cereal industry in order to make known the possible threat of entry, the threat of rivalry,
The cereal market is a booming industry. It has been around for over one hundred years and continues to attract millions of customers’ everyday. The market structure of the cereal industry is an Oligopoly. This is because there are four large firms, Kellogg, General Mills, Post, and Quaker Oats, which dominate the industry.
There are also a few small firms who are involved in the cereal industry as well. The cereal industry targets all different age groups from young kids to adults. They also target people who try to eat healthy. Their main pricing strategy is price discrimination. They use this by handing out coupons, so that people can get their cereal at a discounted price.
Price competition is rarely used in the cereal industry, and when it has been used it has been unsuccessful. Finally, there is a lack on competitors in the industry do to two large barriers to entry. This is accounted for when performing a Porter’s Five Forces analysis within the industry. These barriers are due to the lack of money for proper advertising and the brand image that many of the top cereal companies have already established. Kellogg, General Mills, Post, and Quaker Oats will continue to dominate the cereal industry for many years to come.
Top Cereal Producers
Manufacturer 1999 2005 2008
Kellogg's 32% 32% 33%
General Mills 31% 26% 25%
Post 16% 15% 15%
Private Labels 8% 14% 14%
Quaker Oats 9% 6% 7%
Malt-O-Meal 3% 5% 5%
All Other 1%
Purpose: The purpose of this analysis is to take a closer look at the cereal industry. In order to do so it is necessary within this analysis to identify the market structure of the industry. It is also imperative to recognize the main competitors within the industry in order to calculate the market share of the main companies that dominate the current industry. I will also conduct a Porter’s Five Forces analysis on the cereal industry in order to make known the possible threat of entry, the threat of rivalry,