UNITED CEREAL: LORA BRILLS EUROBRAND

CHALLENGE

CASE ANALYSIS

Introduction
The case is focusing on European division of a giant multinational breakfast food company,
which describes a launch decision for a new cereal product. United Cereal (UC) was
established in 1910 by Jed Thomas. It was known in the industry, eventually diversified into
snack foods, dairy products. By 2010 UC was a $9 billion business, but the breakfast cereals
still accounted for one-third of its revenues. As the breakfast cereal trend soon set in. It was

very necessary for the company to launch a new product. The company had strong values
and policies, which it needed for its managers to follow. Breakfast cereal market
was a potential market and there were several major competitors. With the growing demand
of the ready to eat cereals, the company was now in a highly competitive industry.
There are three main questions that one needs to answer in order to analyse the case properly
and reach to a clear understanding.
Question 1: How should Brill respond to Michels mail? Should she launch HBS or not?
Launch and Delay of HBC in France
Launch of HBC in France
1. According to the Lyon test for both

Delay in Launch of HBC in France

1. Looking from the given data through

September and October targets have

Sept-Oct targets exceeded the target

been exceeded quite substantially

But the November shipment has not

2. Sweeter blueberry version which

was market tested to a limited level

met the targets

2. The form or consistency is less than

showed a 64% intention of

30% from the Lyon test and that

repurchase which is more than the

doesnot work in the favour

minimum 60% level that is required

3. The HBC didnt meet the target

3. From the Attitude Data, While 83%

during market research of a particular

are in favor of taste of cereal and

product therefore more study needed

nearly 70% are in favor of taste of

before the launch of product.

fruit with the perception of health

aspect being 90% positive towards

which the market potential was not

the new product

identified therefore it was a risky

4. The competitor in the segment

market is Kelloggs for France.
5.

4. Market study was not performed to

task
5. Brand awareness plays an vital role

They have second mover and first

in launching of the product to which

follower advantage over other

awareness has to be increased before

competitors

launching of the product As

6. In this segment of people are more

advertisements costs will increase to

health conscious and HBS is being

increase the awareness if product has

positioned as a healthy product.

to be launched immediately

7. There is a possibility of leap

frogging by the competitors as seen

be only 25% and so the spending on

from the past

the marketing and advertising will

8. Since United cereals is already in

the healthy breakfast segment in
France hence this product will be
more of product extension rather
than a new product launch which
will save huge Launch and
marketing costs
9. With Euro operations having 25%
more operations cost than US
operations and launching a Euro
brand will again increase these costs
and hence justification of SG&A
will be a problem in Euro launch

Entry Barrier for this Market

6. The repurchase intent is also found to

High Competition

have to be higher and so will prove

to be an expensive affair
7. The market size and potential is also
unclear

Market Intensive

Access to huge Distribution network

High Reach

Question 2: Does UC represent an example of a centralised or decentralized

international management?
This question can be well answered when we try to see the organisation as a whole and
understand what arguments help us qualify United Cereal as centralised and what as
decentralised.
Centralized Processes

Country managers had decision

Decentralized Processes

powers but they had to follow UC

way.

Product customization was by country

managers

The launch Strategies were country

specific.

Vertical communication structure

is followed in the company

Brand was country specific

Marketing budget limit exceeding

Marketing Strategies was done by Country

to get the approval.

managers

The differences from above bend more towards decentralized management so we need to see
the organisation structure to reach to a clear conclusion.

Also from the case it can be seen that the watchwords of UC : commitment, diligence and
loyalty (page 3) would be diluted if not central control. Also from the organisation structure
from below,

Corporates

VP/B
rill

Review and
approval layer

Veryical
Communication

UC Europe
Approvals

Launch
CM

Subsidiary
Market Research
Launch Strategy

Test marketing

Product
Development

Shows that even if the launch happens at the CM level/ Subsidiary level along with the other
processes, the approvals and review are to be obtained from the higher up in the hierarchy.
Thus proving the organization structure to be a highly centralized one rather than a
decentralized.
Question 3: Should HBC become Euro Brand?

Launch of Euro Brand

Product launch cost takes

Delay of Launch of Euro brand

$20million and launching of same

product reduces the SG&A

Difference in taste endure(Euro

customers)

Country Managers powers will be

expenses, so a potential savings

demotivating and accountability can be

Leapfrogging would be avoided

decreased.

Consumer tastes are converging

Huge competition

$20million could be lost

CMs are not used to frequent new

product development and are instead
used to product extensions so a potential
issue

From the above arguments tough the delay sounds more weighted, the launch sounds a
potential option too.

Conclusion

Now in the light of the above analysis the case puts one in the dilemma that on one hand, the
individual launch in France has all the possibility of getting rejected as Brill can say that
since the CM did not follow the UC way (completely), as no extensive research done, the
launch is to be delayed. On the other hand, there is this idea floating in her mind to obtain
economies of scale and she wants Europeanization with the launch of Euro brand.