The Ready-to-Eat Breakfast Cereal Industry
The RTE breakfast cereal industry has long been a highly profitable and very stable oligopoly. In
1994, industry leaders sense that the industry is at a crucial turning point, as private label brands
have begun to make significant inroads against the branded cereals and competition among the
branded manufacturers has intensified, primarily through increased trade promotions and couponing.
In April 1994, General Mills President Steven Sanger sets out to
‘
rationalize
’
industry pricing and
promotional spending, a risky move whose ultimate success will depend on whether rivals will
follow suit.
Discussion Questions:
1. Why has RTE cereal been such a profitable business? Use the 5-Forces model to analyze industry
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- Summer '07
- Degravel
- Management, Oligopoly, General Mills, Breakfast cereal, Breakfast Cereal Industry
