Kellogg’s Company is a food processing and manufacturing American multinational company. Will Keith Kellogg founded the food company in 1906. Kellogg’s Company has established a very large food manufacturing network and the company is operating its business in approximately 180 countries across the globe. Today, we’ll discuss the PESTLE analysis of Kellogg’s Company; it focuses on external environmental factors like; political, economic, social, technological, legal, and environmental factors.
Political Factors Impacting Kellogg’s Company
Some of the main political factors in the Kellogg Company PESTLE analysis are as follows;
I-Global Trade Policies
Kellogg’s is operating its business in approximately 180 countries across the globe. The food manufacturing brand has a very large supply chain and distribution network, the brand procures food raw supplies and ingredients from different countries. The company comes across international trade policies like tariffs, taxation, import and export policies, and trade policies while doing business globally.
II-Government Regulations
The government health, food, and consumer safety regulations are very strict for food manufacturing brands like Kellogg’s. Governments keep changing their regulations and policies to ensure the health and safety of ordinary consumers. Regulatory compliance would significantly increase the cost and expenses of the brand.
III-Political Stability
The stable political environment of the country plays a key role in the growth of businesses and companies. When the country is going through political turmoil, violent activities, roadblocks, processions, and strikes, then it negatively impacts the supply chain and distribution of food supplies and materials to reach production and manufacturing factories.
Economic Factors Affecting Kellogg’s Company
Some of the main economic factors in the Kellogg’s Company PESTLE analysis are as follows;
I-Currency Exchange Rate
The currency exchange rate market is highly volatile and it keeps on changing depending on various factors. Kellogg’s is operating its food business worldwide, and the company procures food ingredients, materials, and supplies from various countries in multiple currencies. A small change in currency in currency exchange rate would increase the cost and expenses, and negatively impact the company’s revenue and profitability.
II-Inflation
The inflation rate is the key economic indicator and it directly impacts the sales and revenue of the company Kellogg’s. For instance, a higher inflation rate means that the country is printing more money, and it decreases the per unit value of all the currency notes. As a result, things become cost and expensive for ordinary consumers, and the increase in retail price would decrease the company’s sales.
III-Economic Downturn
The global economy is going through a rough patch for the past few years. It is due to multiple factors ranging from economic recession, higher unemployment rate, shutdown of businesses and companies, lower productivity, and limited sales businesses. When people don’t have sufficient disposable income, they would spend their income and resources carefully.
Social Factors Impacting Kellogg’s Company
Some of the main social factors in the Kellogg’s Company PESTEL analysis are as follows;
I-Health Conscious Trends
The consumer market has become highly cautious about their health, food, and diet. They are very careful about the type of food they’re eating and putting into their bodies, and it ultimately impacts their health and well-being. In order to keep up with healthy diet trends, Kellogg’s is developing food items and snacks rich in fiber, low sugar, and oil.
II-Demographic Change
Millennials and Generation-Z contribute a major portion of the consumer market and the population. The number of elderly population is also increasing, and so does their changing needs and requirements. Kellogg’s should develop and change its food offerings relevant to the changing demographic needs. For instance, the food brand should offer sustainable food items, organic food, low sugar, and oily food.
III-Cultural Preferences
The socio-cultural factor plays a key role in the growth of businesses and companies. For instance, Kellogg’s is operating its business worldwide, and the food taste of people is vastly different in various cultures. For instance, the Asian food taste, Indian food spices, Arabian food, and European and American food requirements are different.
Technological Factors Affecting Kellogg’s Company
Some of the main technological factors in the Kellogg’s Company PESTEL analysis are as follows;
I-Advanced Technology
Kellogg’s invests a significant amount of capital resources in the development of the latest automation technology. Automation technology plays a key role in performing various supply chain, production and manufacturing, distribution, and retail processes. Most importantly, automation helps the food brand to decrease production and manufacturing costs, reduce wastage of resources, and improve profitability.
II-E-commerce Platform
Kellogg’s has invested a significant amount of capital resources in the development of a digital e-commerce platform. It has amplified the company’s sales and revenue by 25% in 2022. The food brand is employing digital technology and social media marketing campaigns to amplify its customer market reach, network, and sales.
III-AI and ML
Kellogg’s is investing in AI and ML technology and the company focuses on integrating it with its existing supply chain, inventory, warehousing, and retail management system and software. The AI and ML tech integration would help the company achieve optimized delivery routes, efficient demand forecasting, higher customer satisfaction levels, and efficient utilization of resources.
Legal Factors Impacting Kellogg’s Company
Some of the main legal factors in the Kellogg’s Company PESTEL analysis are as follows;
Regulatory Compliance
Kellogg’s Company needs to comply with the regulatory requirements of different countries. It consists of food, health safety regulations, ethical sourcing of food ingredients, responsible supply chain and distribution, packaging and labeling requirements, and others. Regulatory compliance would help the food brand to smoothly perform its operations without any delays and disruption.
Environmental Factors Affecting Kellogg’s Company
Some of the main environmental factors in the Kellogg’s Company PESTEL analysis are as follows;
Sustainability Initiatives
Kellogg’s has made a strong commitment to social responsibility and environmental sustainability. The food brand has taken various steps like ethical sourcing of raw materials and ingredients, sustainable production and manufacturing, renewable sources of energy, and recyclable material and packaging.
Conclusion: Kellogg’s Company PESTLE Analysis |PESTEL Analysis of Kellogg’s Company |External Environmental Analysis of Kellogg’s Company | Strategic Analysis of Kellogg’s Company
After an in-depth study of the pestle analysis of Kellogg’s Company; we have realized that Kellogg’s is the world’s leading food and snacks manufacturing brand. If you are learning about the Kellogg’s Company PESTLE analysis; then you should keep in mind the abovementioned external environmental factors like; political, economic, social, technological, legal, and environmental.
Ahsan Ali Shaw is an accomplished Business Writer, Analyst, and Public Speaker. Other than that, he’s a fun loving person.
