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GE/ McKinsey 9-cell matrix
In consulting engagements with General Electric (GE) in the 1970's McKinsey & Company developed a nine-cell portfolio matrix. It was considered as a tool for screening GE's large portfolio of strategic business units (SBU)
Under United Biscuits, Keebler later became a unit of UB Foods U.S., a holding company formed in 1986 that operated companies under the Keebler name. With annual sales in excess of $1 billion, Keebler was the second largest cookie and cracker producer in the United States. The company also produced ice cream cones and salty snacks, and in 1986 opened a product-and-process development center at its headquarters in Elmhurst, Illinois, to develop and test new products.
United Biscuits continued acquiring bakeries and other types of food companies throughout the 1970s and 1980s, including Shaffer Clarke in 1978, Terry's of York in 1982, and Callard and Bowser in 1988. The company also made an early entry into China in the late 1980s, leading to the opening of a joint venture biscuit factory in the south Chinese city of Shenzhen in 1990. In the late 1970s UB ventured into the fast-food business with the acquisition of two U.K. chains, Wimpy hamburgers and Pizzaland. Further diversification came in 1988 with the £335 million acquisition of Ross Young's, a leading U.K. frozen food company. United Biscuits also failed in its efforts to complete two other large acquisitions: tobacco and brewing giant Imperial in 1986 (which was acquired by Hanson PLC) and the European operations of RJR Nabisco in 1989 (which were acquired by BSN, forerunner of Groupe Danone). UB's variety of operations and desire to keep brand names and individual company identities intact necessitated repeated reorganizations. By the late 1980s, the company was divided into five business segments. This was reduced to four during 1989 when the fast-food operations were sold to Grand Metropolitan PLC, one of the forerunners of Diageo plc.
Leading United Biscuits from 1972 through the late 1980s was Hector Laing, the son of Hector Laing and Margaret Grant. The chairman was mindful of the impact of computerization and other technological advances on the business--and particularly on personnel. Reinvestment in expansion and new equipment was set at a minimum of 5 percent of profits. That sometimes left little for raising wages during lean years. To offset that occurrence, UB workers received a rare degree of job security: three years' service guaranteed the job for the next five years, ten years' service guaranteed a job for life. Workforce reductions resulting from technological improvements were accomplished through normal attrition and incentives for early retirement.
In May 1990 Laing retired as chairman of United Biscuits, having shepherded the company through a period of astounding growth. Taking over as chairman was Robert Clarke, who had served as chief executive since 1986. Promoted to chief executive in January 1991 was Eric Nicoli, who had headed up the UB Brands division. The new leaders continued to seek acquisitions, aiming on further expansion in the Asian-Pacific region and on bolstering the firm's weak position in continental Europe.
In 1990 UB acquired Verkade, a leading biscuit and confectionery firm in the Netherlands. During 1991 UB purchased majority or near-majority stakes in three major European biscuit companies: Fazer Biscuits of Finland; Oxford Biscuits of Denmark, the largest biscuit maker in Scandinavia; and Gyori Keksz, the largest biscuit firm in Hungary. The stakes in Oxford and Gyori Keksz were increased to 100 percent by 1993.
The sale of United Biscuit's Keebler and spanish KP businesses has resulted in the company losing 100 million pounds sterling during 1995. All areas of the company have been performing poorly during this financial period due to difficult and highly competitive trading conditions, although KP and Keebler were continually underperforming. McVities biscuits sales rose to 630 million pounds although high prices on raw materials resulted in poor profit figures at the end of the year.
1991 Eric Nicoli (below left) takes over as chief executive from Sir Hector Laing, the company's guiding light for almost 20 years. At this stage, UB is a powerful player in branded foods with McVities and KP crisps with a disparate range of other interests including engineering and Wimpy bars. Operating profits are more than pounds 200m. Nicoli makes some disposals, concentrating the company on food brands.
1993 The biscuit starts to break. From 1993 United Biscuits struggles against supermarket own brands and more powerful competitors such as Pepsico in crisps and Nabisco in biscuits. Share price slides. The Keebler business in the US is subjected to an expensive restructure. Takeover talk swirls again.
Biting the bullet
1995 The arrival of former ICI hard man Colin Short as chairman in 1995 forces tough decisions. Pulls out of the US with the sale of Keebler, abandoning a 20-year struggle to crack America. Also pulls out of Spain. Shares fall out of FT-SE. Posts first-ever losses and cuts dividend, the first big food company to do so in 15 years. Eric Nicoli criticised in the City. Board pledges support.
1974 United Biscuit Acquisition Proves a Failure
Keebler remained an independent company until 1974, when it was acquired by United Biscuit Company, one of the largest food manufacturers in the United Kingdom. Within the corporate folds of United Biscuit, Keebler operated as a unit of UB Investments US Inc., a subsidiary of the British parent company that would preside over Keebler's operations for the next two decades. Organized as such, Keebler continued its perennial battle against Nabisco, but eventually the strategy underpinning the company's war plan proved self-destructive.
At United Biscuit behest, Keebler concentrated on developing and marketing salty snacks, such as Zesta Saltines, which, critics contended, diverted the company's attention from its core expertise in cookies and crackers. Further, Keebler drew criticism for trying to directly compete against Nabisco's stalwart brands, such as Frito-Lay, instead of building its market share in product niches where Nabisco's strength was more assailable. Ultimately, the period of United Biscuit's ownership turned Keebler into an unprofitable company, a period, so claimed ADWEEK Eastern Edition on October 11, 1999, when Keebler 'did almost everything wrong.' In 1995, the last year of United Biscuit's control, Keebler registered $93 million in losses. The time had come for profound changes to be made.
The crisp wars and rising raw material prices bit a chunk out of United Biscuits figures last year, sending profits before exceptional items down 2 per cent to pounds 178m.
Skirmishes with Nabisco and Pepsico, which owns Walkers crisps as well as the supermarket own-labels, squeezed margins in the KP snacks business, where UK profits slumped 16 per cent to pounds 29.7m.
The 1994 results were further affected by exceptional charges of pounds 49m, including pounds 21m relating to the closure of the Grimsby crisps factory.
UB's strategy is driving long-term sustainability in the business, sustainable performance for UB encompasses three key areas:
Financial - delivering superior financial returns every year
Environmental - minimising our impact on the environment
Community - engaging with our consumers, employees and local communities to improve and promote health and wellbeing, education, skills development and the support of charities UB's strategy is driving long-term sustainability in the business, sustainable performance for UB encompasses three key areas:
United Biscuits (UB) is one of the world's pre-eminent branded snacks businesses. We produce some of the best known and loved sweet and savoury snacks, with products ranging from biscuits and crackers to cakes and savoury snacks. Our unrivalled portfolio of brands has been meeting consumer needs for well over 100 years and includes such favourites as McVitie's, Jacob's, Carr's, McCoy's, Hula Hoops, McVitie's Jaffa Cakes, KP, Mini Cheddars, go ahead!, Verkade, Sultana, BN, and Delacre.
UB holds leading or strong number two positions in its core markets of the United Kingdom, the Netherlands, France, Belgium and Ireland. Moreover our brands and products have global appeal. We have a rapidly growing international business unit serving consumers from North America to the Middle East, Africa, and Australia.
UB seeks to drive sustainable performance in all it does. This includes delivering consistently on our promise to consumers, serving our customers, developing and engaging actively with our employees, delivering superior financial results to our owners year in year out, minimising our impact on the environment and interacting constructively with the communities in which we operate. We are investing in the future whilst delivering results today.
For company advertising and sales are very essential. If I would be in hold responsible of the UB Company, I would make strong design ethic will make a business be obvious from the friendliness. I would have level to diminish the danger which seeks to grow our business. I would take the right result for the first time as an in charger to a company. Assessing best business which I would do for my level most excellent. My way of strategy is simple - to get more people to buy our product and enjoy more of our brand - wherever any time each day. I would make it a good number trusted band and list my UB Company in zenith most brands. Previous to UB Company face losses on selling raw materials so well-appointed. My strategy is winning the less cost involvement which make no vat to the company. So that they can make income. potential plan is that
Innovation falls into several categories. And include business model innovation.
1. Request of new know-how and creation packs. I would make in such absent UB also led the market in yield &packs innovation, commercializing both in home &out of home use chance. Some of the new goods and pack. Establish include.
The company also greater than before its guidelines and design means to make stronger products with micro nutrients consisting with different flavones.
How to Path Company profits is extremely important. I would technique poles apart plans in such a way.
Tracking company earnings is essential for considerate when your production going and what you can do to push it further. It is vital to be familiar with that profit are fully different from definite income ,as we need to consider client ,income, and other operating cost before u can see the authentic profits.
I would have make better company's encouragement and market promotion. In addition I would have developed a representational showpiece of the new business society.
1)Johnson, Mike, "Clarke's Bite," Marketing, December 7, 1989, p. 27.
2) : Food and beverage ,Publisher: Agra Europe Ltd. Publication Name: Euro food Industries: Year: 1996
5) The Independent (London, England) | Date: March 17, 1995| Author: NIGEL COPE