Communications plan Of kelloggs Company Essay Example | Topics and Well Written Essays - 2000 words

Communications plan Of kelloggs Company - Essay Example Enactment of new tariffs or changes by the same also affects the company performance and its general financial position. Changes in the existing taxes also affect Kellogg's operations since; there will be an increase in the expenses of the company (Boehlje, Krause & United States, 2001, 13). This poses a challenge for the Company because it has to find ways of increasing its revenues in order to cover up the expenses. In addition, political unrests and terrorist attacks in the Unites States also affect the flow of work in the company. For instance, terrorist attacks will normally lead to massive losses due to fall in the demand of foodstuffs. However, it is not all times that the political environment will create challenges for the company. At times it also creates opportunities for the company. For instance, when the government creates trading opportunities in the economy, or creates new investments in the country. The country is able to increase its revenue by taking advantage of s uch investments (Boyce,  2002, 32). The economic environment of the company also has a great impact on the company’s operations. Economic downturns affect the consumer demand of the products being offered by the company (Kellogg’s, 2008, 9). This is because; consumers will only be attracted to buy products which are lowly or averagely priced, but not highly priced. Therefore, economic problems such as inflation or increase in prices also affects the company’s financial statements due increase in the expenses. For instance, increase in the prices of raw materials, fuel and labor costs, increases the production costs of the company. Kellogg’s company mostly uses agricultural products such as wheat, corn and sugar. Therefore, any slight price increases in the agricultural market pose a challenge to its operations. In addition, shortages in labor, and the general inflationary pressures in the economy increase the labor costs of the company. Social/cultural effects mainly involve effects arising from the reaction of the customers. Kellogg’s Company produces products which directly affect customers since; the products involve direct consumption by the public (Kellogg's, 2008, 8). Therefore, the company has the duty to produce high quality products which will not have adverse effects on the customers’ health. Therefore, the company has to check on the safety and quality of its products. The ingredients used in the food products also have to vary depending on the culture of the target group. This is due to the fact that; different cultures consume different foods and despise different foods too (Peterson,  2004, 15). Competition is also a factor that greatly affects the operations of Kellogg’s Company because; the company operates in a highly competitive industry, the food industry (Kellogg's, 2008, 7). There are many other businesses that are engaged in the supply of fast foods and ready-to-eat cereals. Most of the se businesses also have strong financial positions and thus they are highly competitive. Therefore, Kellogg’s also has to improve its operations in order to match up the challenge posed by its competitors (West,  2001, 41). Technology is also a factor that affects the company immensely. This is because; technological failures would disrupt its operations since; the company greatly relies on information technology to store and transfer data. For instance, its inventory management system is electronic and thus, it highly