United Cereal: Lora Brill’s Eurobrand Challenge

1. Should Lora Brill authorize Jean-Luc Michel’s request for the launch of Healthy Berry Crunch in France? Please provide arguments for both possible answers, and then choose one with justification. (3 points) I really can see going either way on this decision. UC had shipped volume nearly 40% more than they projected in the first few months. They were also above the targets for share in the September and October months. Additionally, Jean-Luc is very close to the market and it seems that he does want to launch Healthy Berry Crunch cereal in France. On the other hand, there was a huge drop in shares and in shipments of the product in November. Additionally, their studies showed that more than 30% of survey-takers did not respond favorably to the form and consistency of the product. My recommendation is to not authorize the request to launch Healthy Berry Crunch in France.

The cost associated with a new product launch can be very high. I think that the company tends to stick to tried and true methods and would feel much more comfortable if they were able to set up more market studies once they have resolved the form and consistency issues with the product. Adhering to the standards set by the company shouldn’t even be a question for Lora. These policies will likely save her the embarrassment of a flop in the market. Additionally, the Berry Burst Cheerios rumor, if true, could have devastating impacts on Healthy Berry Crunch’s sales if they do not have a solid plan to counteract the well-known and respected Cheerios brand name. The monumental task of securing shelf position in the grocery store in the cereal aisle is another reason they should wait. The positioning won’t matter if the product is not good.

2. Should UC go ahead and launch Healthy Berry Crunch as a Eurobrand? Please provide arguments for both possible answers, and then choose one with justification. (4 points) There are only two good reasons (that I can think of) for UC to launch Healthy Berry Crunch to launch as a Eurobrand. The first is to enter the market first and score a market leader position early and before the major players like Cheerios secure the spot. The second is to expand the pool of diverse management resources across the globe. Good talent can be tough to find but increasing the regions where talent is drawn from can help bring more solid management. When I think about the reasons not to launch Healthy Berry Crunch as a Eurobrand, they seem more compelling. The differences in preferences and tastes across the nations of

Europe are striking and a single product may not be able to span all of those different tastes. The market structures across the nations are different enough to make barriers to entry difficult to overcome for each specific nation. Even if the process of producing the cereal is standardized, the cost of shipping and transportation throughout Europe will be expensive. If Lora wants to respects the policies of the company, she should do market research in each country. That will be very expensive as well.

My recommendation is not to launch as a Eurobrand. I believe the risk is too high and the probability of failure is also very high. 3. Should UC adopt Lora’s recommendations of Eurobrand teams or should they stick with their current organization? Please provide the pros and cons for both choices, and then choose one with justification. You may also suggest a third alternative, or your own modifications to either one of these options, with justification. (3 points) UC was faced with a decision: take Lora’s recommendations for Eurobrand teams or to stick to the tried and true ways of the greater UC. Eurobrand teams: The teams are quite large and likely need to be slightly smaller to encourage more streamlined direction and decision making. Smaller teams would also allow for a more effective team by having the right folks instead of just a lot of bodies. The team chairman should be re-examined because a low-man-on-the-totem-pole brand manager position won’t carry much weight with the rest of the team.

Additionally, I think the team roles and responsibilities need to be very clearly documented in each country. I suspect the differences in countries will require slightly different responsibilities for each role. On a more positive note, utilizing subsidiaries will tap into the power of the already established resources and abilities in the cross-organizational teams. Current organization: I believe the current organizational structure still makes sense and should be utilized as the model for the Eurobrand teams along with the small changes I mentioned in the above paragraph. I think those changes could be made to make it more relevant to the Eurobrand product structure. The underlying theme of market research and market testing, while cumbersome, will ultimately allow the brand to enjoy more success. I realize that subsidiaries can create a great competitive advantage for the brand but I just don’t believe it will provide a long-term success model for the brand. Without the current structure, the brand will not be able to take the lessons learned from the test markets and apply the learnings for new market entries going forward.