During much of the 1990s, Kellogg Co., the Battle Creek, Michigan-based food manufacturer, was an iconic U.S. business whose best days seemed to be behind it. With net sales then of more than $6 billion, it had increasingly lost the confidence, and even the interest, of Wall Street. Plagued by the realities of a mature market, rising costs and intense competition, the company’s brands were languishing and its profit margins were weak. New product launches proved largely to be forgettable failures. Kellogg developed a reputation for failing to live up to its own rosy projections. The stock suffered as did employee morale.
Those conditions might have stagnated or worsened for some time were it not for two important events that took place in 1999: the appointment as CEO of Carlos Gutierrez, a longtime company insider, and Kellogg’s first ever loss of market leadership to the industry’s perennial No. 2, General Mills Inc., later that year.
Under Gutierrez’s leadership, Kellogg embarked upon a process of corporate reinvention driven by a comprehensive focus on profitability. Like many companies sobered by recession, Kellogg had pursued profitability goals many times in the past but seemed to lack the management model and discipline to achieve them in a meaningful and sustained way. With impressive results during each of the past few years, however, Kellogg’s recent strategic turnaround seems to have had... To read the complete article, login or sign-up using the form below.
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