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A Comparative Analysis Of The Management Structures Between Hormel Foods And Kellogg Company

Organizational Differences

Though Kellogg Company and Hormel Foods are both players in the food manufacturing industry, they have many organizational differences based on how they discuss their annual performance. For one, Hormel Foods is more optimistic about growing internationally and improving overall business performance. Both companies are successful in their respective business but Hormel Foods are looking forward to more things in the future such as new investments and equipment. After introducing their products, Hormel Foods immediately presented their net sales, diluted earnings per share, operating income and annual dividends while focused more on risk factors as well as market risks.

Also, it is apparent from the annual report of Kellogg Company that their net sales declined in U.S., North America, Latin America, Asia Pacific and Europe due to various reasons such as shipping problems, unfavourable pricing and foreign currency. Nonetheless, their operating profit increased as a result of strong savings. Kellogg Company faced a lot of challenges recently but they were able to surpass them all by using different strategies like cost reduction.

Hormel Foods, on the one hand, admitted right away that they did not achieve the progress they anticipated for 2017. Their financial performance, however, was doing well throughout the year and they even entered a new market, which is the Brazilian market. The two companies have different future outlook and they also have different ways of rewarding their employees. Though they are in the same industry, they have different kinds of products o they also have different operations, pricing and marketing strategies. Their annual performance varies depending on specific factors which also give them different results.

Concisely, the data in both annual reports were clear enough for stakeholders to understand and conclude how well they performed in the recent year. All important details about the companies especially their annual performance were thoroughly discussed in the reports. In fact, even a person who does not have ample knowledge about business will still understand the gist of the annual reports of the two successful companies.

Emphasis on Goals, Challenges and Plans

In their discussion of results, Kellogg Company and Hormel Foods also put emphasis on their plans and goals as well as present and future challenges. The Kellogg Company has faced many challenges in 2017 and they are still aware of the many other risks and problems that the company may face. In this light, it is a good thing because they can prepare for these possible risks and come up with strategies to overcome or prevent them. They specifically talked about interest rate risk, price risk and foreign exchange risk. Hormel Foods is also mindful of the challenges and problems that may occur in the next years of their operation considering the tough competition in the food manufacturing industry. They are more concerned about acquisition risks and litigation risks.

Both companies also emphasized their goals and plans. Specifically, Kellogg Company is planning to implement restructuring and cost reduction activities. They also have a project called “Project K” which aims to help generate more savings and strengthen existing businesses in core markets and emerging markets (Kellogg Company, 2017). On the one hand, Hormel Foods emphasized their dividend reinvestment plan and acceleration of their foodservice channel’s growth. They also intend to become a more global food company by entering new markets outside the United States. Moreover, they plan to modernize their supply chain and reorganize their operations by reducing or eradicating less strategic costs. In the end of the CEO’s letter, they also announce the construction of a new Jennie O Turkey store plant in Melrose, Minnesota (Hormel Foods, 2017).

The Impact of Format on Presentation of Information

Apparently, the format of an annual report has an impact on the presentation of information. It may enhance or detract the way the information is presented. It may also confuse the readers or help them have a much clearer understanding of the information being presented in the report. Specifically, the two companies used different formats in their annual report.

Hormel Foods’ format is actually more enticing and organized than the Kellogg Company’s. First, they use photos or a photo collage featuring their main product, operations and customer satisfaction. The introductory message of the CEO is bold to put emphasis on what he wants readers to know about the company. After the CEO’s message, they again use photos of their products and also utilize graphs and tables to present significant information. One good thing about the format of their annual report is that they tackle information from most important to least important, though all the details in the report are essential for the readers. More graphs and tables are used as the report progresses which enhances the presentation of information. It helps readers understand financial information more easily because they are presented through graphs and tables.

Kellogg’s Company, on the one hand, used a different format which is duller and more disorganized. They do not use any picture to represent the company and present their products. They mention the names of their executive officers in the third page of the report where these can be seen in the last part of the Hormel Food’s annual report. Also, they discuss possible risks first, which is less important than other details such as the recent achievement of the company and their plans for the coming years. This detracts the interest of the readers from the information being presented and because they discuss a lot of risks, it can make readers conclude or feel that the report is full of negativity.

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