Environmental Factors

Environmental Factors

Kelloggs cereal was started in 1906 by W. K. Kelloggs (Kelloggs, 2012). W. K. Kelloggs goal was to supply people with healthy breakfast cereal. Since the startup of Kelloggs, the company has grown and is known globally. Kelloggs is known in more than 180 countries and has nearly 13 billion in sales since 1997 (Kelloggs, 2012). To understand how Kelloggs has expanded its operation globally the factors of trade practices, demographics, physical infrastructures, cultural differences, social and ethical responsibility, the effects of different political structures, and technology will be explained in the following paragraphs.

Economic Interdependence

Economic interdependence is the dependence of others to produce products to help them sustain their lives. Kelloggs provides the cereals to individuals for this substance, but also has interdependence on farmers who grow the corn and wheat that makes the cereals. This area can also cover employment issues. Income is another variance of sustaining people. Income is the ability to buy products offered.

Trade practices and agreements with Kelloggs is part of its global set-up. This is an agreement between Kelloggs and the countries it sells its product to or produces the product in. Many countries have agreements on prices for importing or exporting products authorizing a company from another country to set-up a plant and distribution of these products with government taxes attached. Because Kelloggs operates or sells its product in more than 180 countries each of these countries will have specific guidelines that need to be followed. Therefore, Kelloggs research and marketing department must continually monitor any changes and determine the benefits of continuing to distribute the products in these countries.

Demographics

The use of demographics for Kelloggs is essential for the sales of the product. Demographic concerns the age group and income of people, so it is describing the characteristics...