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Times 100 Abstract:
In a rapidly changing and competitive business environment, it is not easy to predict:
- future trends in consumer tastes and preferences
- competitors' actions
- market conditions
Creating new products or making changes to existing brands can be expensive. It involves making investment decisions now, in the hope of making a return later. Weighing up future returns against an investment is a crucial part of a manager's job.
It always involves an element of risk, because the future is never certain. Managers' previous experience, together with market research information helps them to predict future events and outcomes. However, all business activities involve some element of risk. There is often said to be a link between risk and return. The more you risk, the higher the likely returns (or profits). However, a balance must be struck.
This case study describes a major investment in Kellogg's Special K. It illustrates how the company's investment in new product development served to strengthen a global brand.
