Harvard Case - Should Kellogg's Launch Gluten-Free Products in India?
"Should Kellogg's Launch Gluten-Free Products in India?" Harvard business case study is written by Sandeep Puri, Mayank Rawat, Arjit Rawal, Akshay Nangia. It deals with the challenges in the field of Entrepreneurship. The case study is 12 page(s) long and it was first published on : Aug 12, 2014
At Fern Fort University, we recommend that Kellogg?s proceed cautiously with launching gluten-free products in India. While the gluten-free market is growing globally, including in India, Kellogg?s should carefully consider the market size, competitive landscape, and potential cannibalization of existing products before making a significant investment. Instead of a full-fledged launch, we suggest a phased approach with a pilot program to test the market response and refine the product offering before scaling up.
2. Background
The case study focuses on Kellogg?s, a global cereal giant, considering the launch of gluten-free products in India. The Indian market presents both opportunities and challenges. On the one hand, India has a growing middle class with increasing disposable income and a preference for Westernized food products. On the other hand, the market is already crowded with local and international players, and consumer awareness of gluten-free products is still relatively low.
The main protagonists are Kellogg?s executives who are tasked with making a strategic decision about entering the gluten-free market in India. They need to weigh the potential benefits against the risks and costs involved.
3. Analysis of the Case Study
We can analyze the case using a Porter?s Five Forces framework to assess the competitive landscape and understand the attractiveness of the Indian gluten-free market:
- Threat of new entrants: The market is relatively easy to enter, potentially attracting new players and increasing competition.
- Bargaining power of buyers: Consumers have a wide range of choices and are price-sensitive, giving them significant bargaining power.
- Bargaining power of suppliers: The supply chain for gluten-free ingredients is relatively complex, potentially leading to higher costs and limited supplier bargaining power.
- Threat of substitute products: Traditional cereals and other food products can easily substitute for gluten-free options, limiting the market size.
- Competitive rivalry: The market is already crowded with both local and international players, leading to intense competition for market share.
The analysis suggests that the Indian gluten-free market is moderately attractive but presents significant challenges.
4. Recommendations
We recommend a phased approach to entering the Indian gluten-free market:
- Phase 1: Pilot Program: Launch a limited range of gluten-free products in a few key cities with high awareness and demand. This will allow Kellogg?s to test the market response, refine the product offering, and build brand awareness.
- Phase 2: Market Expansion: Based on the results of the pilot program, Kellogg?s can decide whether to expand the product range and distribution network to other cities and regions.
- Phase 3: Full-Scale Launch: If the market response is positive and the business model is profitable, Kellogg?s can consider a full-scale launch of its gluten-free products in India.
5. Basis of Recommendations
Our recommendations are based on the following considerations:
- Core competencies and consistency with mission: Kellogg?s has a strong brand and expertise in cereal manufacturing, which can be leveraged for gluten-free products.
- External customers and internal clients: The target market for gluten-free products in India consists of health-conscious consumers, particularly those with celiac disease or gluten sensitivity.
- Competitors: The market is already crowded with local and international players, making it crucial to differentiate Kellogg?s offering.
- Attractiveness: While the market has potential, the low awareness and high competition make it necessary to proceed cautiously.
- Assumptions: We assume that the Indian gluten-free market will continue to grow, and Kellogg?s can successfully differentiate its products and build brand awareness.
6. Conclusion
Launching gluten-free products in India presents a significant opportunity for Kellogg?s, but it is crucial to approach the market strategically. A phased approach with a pilot program allows Kellogg?s to minimize risk, test the market, and refine its offering before making a significant investment.
7. Discussion
Other alternatives include:
- Full-scale launch: This approach carries higher risk but could potentially capture a larger market share.
- Acquiring a local gluten-free brand: This could provide Kellogg?s with immediate market access and brand recognition.
The risks associated with our recommendation include:
- Negative market response: The pilot program may not generate sufficient demand to justify further investment.
- Competition: Existing players may aggressively counter Kellogg?s entry, making it difficult to gain market share.
8. Next Steps
- Develop a pilot program: Identify target cities, develop a limited product range, and establish distribution channels.
- Conduct market research: Assess consumer awareness, preferences, and willingness to pay for gluten-free products.
- Monitor market trends: Track the growth of the gluten-free market in India and the competitive landscape.
- Evaluate pilot program results: Analyze sales data, consumer feedback, and profitability to inform future decisions.
Timeline:
- Phase 1 (Pilot program): 6-12 months
- Phase 2 (Market expansion): 12-18 months
- Phase 3 (Full-scale launch): Based on the success of Phase 2.
By adopting a phased approach, Kellogg?s can minimize risk, maximize learning, and make informed decisions about its entry into the Indian gluten-free market. This strategy aligns with the company?s core competencies, addresses the needs of its target customers, and considers the competitive landscape.
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Case Description
Kellogg's is exploring the possibility of launching gluten-free Corn Flakes in India. The company must examine the gluten-free market in India and explore strategies for entering this market. Kellogg's must assess its competitors in India's growing breakfast cereal market, where a growing economy and increasing health awareness is pushing Indian consumers to look for healthier options. Questions remain whether Kellogg's should enter the promising gluten-free segment to take advantage of this potential opportunity in India, consumers' evolving preferences and the current industry trends.
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