A Reorganization of the Quaker Oats Company Essay

IntroductionThe Quaker Oats Company, officially formed in 1901, is currently undergoing massive reorganization, which will dramatically change its position in the industry. Over the last four years, Quaker Oats' returns have been consistently rocky. Quaker unloaded Snapple, its ice-cream toppings and condiments business, and its frozen bagel business 1997. The company has turned to an emphasis on its high performing products such as Gatorade and bagged cereals. Gatorade accounts for more than one-third of the company's total sales and claims over 80 of the US sports-drink market. Quaker is also a leading producer of granola bars, rice cakes, pancake mixes and syrups, and value-added grain products (Rice-A-Roni). Industry SettingQuaker Oats manufactures many different products from the sports drink Gatorade to Far East Cous cous. Because of the great variety in their product lines, it is difficult to find other companies that compete in all the same categories. However several large companies compete in many of the same such as Heinz, Coca-Cola, General Mills, and Bestfoods verifying the threat of rivalry is very evident and therefore requiring Quaker to remain on top of their game. The threat of substitute for Quaker's products relates directly to their rivals who have proven ineffective in producing adequate substitutes for products such as Gatorade. Coca-Cola produces Powerade, Gatorade's biggest competitor, which only holds a very small market share of the sports-drink industry. General Mills competes in the cereal, baking products, and fruit bars areas and Bestfoods is mostly a general foods competitor.Most of these companies are very well established and therefore Quaker concentrates on them more then the threat of new entrants. Financial OverviewOver the last twelve months Quaker Oats has revenues totaling nearly 4.8 billion and total earnings near 470 million. Financial ratios can often tell us how well a firm is performing relative to its full potential and its competitors. Only the most critical ones need be shown here. The Return on Equity indicates the overall operating efficiency...

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