1

1

Introductory reflection

The United Cereal Eurobrand case, set within the European organization of the giant multinational breakfast foods company United Cereal, portrays the background of a launch decision for a new cereal product, the ‘Healthy Berry Crunch’.
As the case evolves, the decision has major strategic and organizational implications for Lora Brill, European Vice President. The case focuses especially on two central decisions confronting her: Should ‘Healthy Berry Crunch’ become the company's first Eurobrand and be introduced in a coordinated manner Europewide? And, from an organizational perspective, should she create Eurobrand teams to implement her proposed Eurobrand concept or are there other more
2.2

Generic strategy and organizational design of UC

Porter’s generic strategy matrix highlights cost leadership, differentiation and focus as the three basic choices for firms.3 These three strategies are created by the combination of two dimensions: strategic advantage and competitive scope. Strategic or competitive advantage is of two kinds, differentiation or lower cost. Strategic target or competitive scope can be in terms of geographic targets, customer segments served, and the range of products. Focus strategies can be based on differentiation or lowest cost.
Based on the information about UC’s European strategy and organization, UC has obviously followed the focus strategy, with a concentration on differentiation originally but a small move towards cost reduction, which can be seen as hybrid
3

see Pretorius (2008)

United Cereal: company structure and strategies

4

strategy, which is not recommended by Porter. Nevertheless, there are studies, which suggest that combining the two competitive strategies may also be successful, as is evidenced by the success of IKEA or Toyota, who have both pursued a hybrid strategy.4
Existing differences across European markets as proved by the failure of the ‘Europeanization