M&M’s Case Study Essay

1. Introduction and BackgroundThe major purposes of utile leadership and c bring ining consist in timely monitoring of organisational surroundings, festering of adequate responses to surroundal challenges and further strategic planning and changes1. Relevant leadership strategies and implications faecal matter function numerous business challenges and help organisations to ein truthwherecome diverse outdoor(a) as well as internal pressures and crises2. This strategic report is takeed at the assignment of the key business challenges of M&Ms through out-of-door and internal depth psychology and further organizement of solutions and specific recommendations on how effective leadership can meet these challenges in this organisation.M&Ms is a popular confectionary brand, which belongs to Mars bodied. The brands name is an abbreviation for its creators such as Mars and Murrie. The main products of M&Ms ar cocoa and peanut colourful candies with the letter m on one side3. Th e product was firstly launched during the World War II, and the main node of M&Ms was the US army. In 1980, the slopped began its unknown grocery store expansion4. Nowadays, Mars Inc., the p bent family, is one of the biggest confectionery manufacturers in the world. M&Ms chocolate beans atomic number 18 sold in more(prenominal)(prenominal) than 70 countries around the world. The telephoner employs more than 40,000 people all over the globe. It should be noted that M&Ms is a secluded home, which started from a family business. In 2010, total revenue of the p atomic number 18nt company, Mars, constituted $30 billion5. M&Ms uses like a shot organisation construction, which makes the company very responsive to the needs of its employees as well as customer. The main competitors of M&Ms are Hershey, Nestle, Cadbury and Kraft Foods6. M&Ms business strategy consists in maintaining high quality of the production but with high volume and low prices.2. Environment Monitoring Research and development (R&D) department has always been of great importance for M&Ms. It has been mentioned in the background that multi-level efficiency is one the main principles of the firm. To achieve this efficiency, the company relies on its own trade look and general perseverance publications and analyses7. The companys success formula consists in in-depth customer engagement practices, through which tastes and preferences of customers are studied and analyses. For instance, in 2002, M&Ms monitored customer environment through the internet survey order, when the target population was proposed to select a raw colour if candies. As a result, purple candies were added to M&Ms production8.Furthermore, it should be noted that in the early 2000s, the external environment began to rapidly change. In response, M&Ms needed to develop adequate measures and strategies in order to remain competitive the market. In this case, M&Ms decided to implement the launch and learn approach, which can be considered an freshly(prenominal) successful method of monitoring the environment9. As a result, My M&Ms brand was introduced to the customers. The main estimation of the modern brand consisted in customisation. Customers could order chocolate beans, but instead of the letter m, they could request their names or even images. In-depth market research and monitoring were overly made after the launch of the new sub-brand. The new product turned out to be successful and appreciated by customers. In addition, it should be noted that M&Ms uses the benchmarking method when new marketing strategies are screen outed in smaller focussing groups10.3. External and Internal AnalysisIn order to understand external environment of a company, the PESTEL modeling is frequently implemented. It should be noted that PESTEL is an acronym, which stands for political, economic, social, technological, environmental and legal environmental factors11.Political M&Ms sells its chocolate be ans in more than 70 countries all over the world12. If the government of a country is unstable, it can negatively affect the firm and its sales. For instance, quotas on imports and new(prenominal) restrictions whitethorn be introduced. In these conditions, M&Ms entrust be able to bring only a specific get along of chocolate beans to the local market. The main examples of such countries are Serbia, Thailand, China, etcetera13. The main M&Ms markets of presence are the US and the UK, which are characterised by low political risks14.Economic The global economic crisis has negatively touched customers purchase capacity. However, it should be mentioned, that chocolate beans are a fast-moving consumer good. Thus, it can be sold quickly even during economically pressing times and at low prices unlike cars and electronics, which are durable and high-priced commodities15. As a multinational company, M&Ms opens new factories in antithetic countries. The company hires employees and he lps to decrease unemployment in developing economies such as Brazil, Kazakhstan, Mexico, etc. In turn, M&Ms also suffers from unemployment and different macroeconomic conditions in these economies. The market has reached maturity yet, neither in the US, nor in other countries16.Social The company produces chocolate beans, which are packed by wide categories of buyers, from kids to adults. The companys products are very popular with special events such as weddings and birthdays. The public is worried about the quality standards used in the company17. technological Contemporary marketing strategies require from M&Ms utilise online sales and online customer involvement. Customer engagement marketing methods are also required where the internet serves as the playground18.Environmental factors Chocolate beans production cannot be classified as highly damaging to the environment and employees health. However, M&Ms depends on the production of cocoa beans and weather conditions i n which they are cultivated. Such input material as cocoa beans are unlikely to run out19.Legal factors M&Ms has to quest after the regulations of the US Department of Agriculture (USDA), Environmental Protection Agency (EPA) and Food do drugs Administration (FDA) on the chocolate candies production20. M&Ms has to follow the legislation in all countries where it operates. M&Ms has to hold dear its employees rights and freedoms.The next step of environmental scanning is SWOT epitome. This analytical frame cast will help to identify the companys internal, including strengths (S), weaknesses (W), opportunities (O) and threats (T)21. The SWOT analysis also helps to determine whether the companys resources and capabilities are enough to compete with other organisations in the marker22.Strengths toilsome and well-known brand name belong to the family of the vastst confectionary firm M&Ms operates in over 65 countries around the globe23 Good reputation among customers and sup pliers High operational efficiency High-quality products24 M&Ms chocolate beans are the best selling candies in the market New brand My M&Ms, which offers customisation Strong leadership and teamwork Good resource allocation Ability to listen to employees and customers ideas25.Weaknesses M&Ms promotional campaigns require vast funding Employees are resistant to change Complex business environment, which causes interest conflicts Flat organisational organize has some disadvantages. For example, one employee may have a few bosses. Furthermore, this structure type may limit the companys egression. Mars Incorporated was criticised for contracting with low-cost African suppliers of cocoa beans, who used child labour26 want of innovative ideas and no recent innovations in the product range.Opportunities Further market expansion Wider diversification of products in the foreign markets To meet customer demand Technology improvement and development27 Innovation Creati on of brand-new goods Elimination of disadvantages think to vapid structure28.Threats Lack of innovations can cause shifts in consumer tastes. To be more specific, customers can stop buying old and outmoded candies and start buying new candies with innovated product and package design. The number of competitors may increase29 Further growth of trade barriers Decrease in consumer demand M&Ms rivals innovated design can give competitive advantage.The Cultural Web analysis helps to see a more comprehensive and bigger picture of the companys culture30. The framework consists of 6 separate dimensions, which are stories, symbols, power structures, organisational structures, keep back systems and rituals and routines31.Stories Mars Incorporated, the owner of M&Ms, is one of the greatest examples of the so-called American dream realisation. Founded in 1911, Mars became a multi-national company with more than 50,000 employees very quickly. Workers of the firm are viewed as the most valuable asset. This idea is one of the main companys focuses. Employees work in a highly motivating and inspiring environment33. They are given bonuses for coming to work on time, which stimulates their performance and productiveness34.Symbols Small panned chocolate candies covered with coloured killable shell, which does not allow chocolate to vaporize in ones hands, prove to be the major symbol of the company. Furthermore, the letter m, which stands for M&Ms name is a highly recognisable symbol. In addition, excellent quality and great taste have made M&Ms the worlds best selling candies35. spring Structure Mars Incorporated, the parent company of M&Ms, was naturalized as a family business. It was founded by Frank Mars in 1911 in Tacoma. Today, John Mars, a grandson of Frank Mars, is the chairman of the company. Paul Michaels is the companys CEO at the moment. All the serious decisions in the company are made by the members of the Mars family36. Middle managers are given slig ht power in the organisation. They are responsible for insider management, and do not put down in taking strategic decisions.Organisational Structure The company has a flat organisational structure. This means that the number of intermediates between top managers and employees is reduced to a minimum. Hence, the spot of middle managers is nearly eliminated37. Employees are actively involved the corporate decision-making ferment and can easily access the senior management. This type of organisational structure allows ameliorate communication between management and workers. The company is teamwork oriented, which is another benefit of the flat structure type38.Control Systems It has been mentioned that one of the major corporate values and principles in Mars and M&Ms is efficiency. The companys aim is to generate the maximum revenue using minimum input materials and resources. some other pregnant value is quality, which needs to be given considerable upkeep and accurately contr olled. The company relies on an internal control system, which guarantees achievement of such objectives, as efficiency and compliance with the relevant laws and regulations. Other departments of the organisation are manufacturing, marketing, sales, human resource, research and development, supply, communications and finance39.Rituals and Routines Unchanged design of chocolate beans since 1941 may be viewed as one of the key rituals of M&Ms. The firm regularly organises informal events for its employees, which improve communication between organisational members and facilitate study in the workplace. The slogan of the company illustrates the main distinctive feature of M&Ms chocolate beans Melt in your mouth, not in your hands40, which builds strong associations with M&Ms candies. This slogan stimulates customers to test the firms promise. Hence, eating chocolate beans that do not melt in hands has become another important ritual.Another important analytical framework, which helps to understand the overall head of rivalry in the fabrication where the company operates, is Porters Five Forces41. According to this model, each industry is influenced by five forces, namely supplier power, buyer power, threats of new entrants, threats of substitutes and degree of rivalry.Supplier power There are plenty of suppliers all over the world that sell cocoa beans. M&Ms buys considerable amount of cocoa beans and is dependent on prices set by the suppliers. up to now insignificant growth of prices can result in increase in the prices for the final production by M&Ms. On the other hand, M&Ms can easily switch suppliers since it does not have long-term obligations. Thus, supplier power is low42.Buyer power M&Ms is presented in more than 70 countries. This means that the firms customers are many and they are highly fragmented. No champion customer can significantly impact M&Ms and their pricing policy. It can be concluded that the buyer power is low43.Threats of new entran ts New entrants in the confectionery market are possible. However, new market players need to meet huge capital requirements in order to enter the market and start accumulating large market share. For this reason, it may be fictitious that the threats of new entrants are medium44.Threats of substitutes There are plenty of other large multinational companies and highly recognisable brands in the confectionary market (e.g. Kraft Foods, Nestle, Hershey Co and Cadbury). If M&Ms will demonstrate weak innovativeness and creative thinking in product range, customers can easily switch to alternative manufacturers and their goods. Threats of substitutes may be evaluated as high45.