Mgt599 Case 3

Although the recession has hit the economy, people are now trying to save money by having “nights in”. This is an opportunity for business in the snack industry to take advantage of.

Kraft Foods is a household name that has been around for over 100 years providing consumers with quality products they demand (Kraft Foods, 2014). Conducting research on trends and demands has generated trust, respect and goodwill from their consumers allowing Kraft Foods to become number two in the food industry (Kraft Foods). In addition to goodwill Kraft Foods has developed strategic alliances with extremely powerful customer, i.e. Wal-Mart, which account for 23% of their total net revenues (Kraft Foods Financial Report, 2013). Kraft Foods understands that the loss of these relationships will generate “decreased sales, financial position and operating results” (Kraft

What strategy (or combination of strategies) did Harley-Davidson use to become such a successful organization?

This factor can be critically evaluated. Whereas, Apple mainly relies on factors related to technological innovations and development, Cadbury's main focus is on the taste of the chocolate. Thus, Cadbury often faces challenging situations because consumers can deal with the exclusion of technological advancements to some extent but they never compromise in the case of the taste of food. But, most experts agree on the fact that these companies have hardly ever taken or implemented a wrong decision. This is the reason why Apple and Cadbury are the leaders in their respective segments.

In this report, we will analyze the financial performance of two companies: Kraft and General Mills. They are global consumer foods companies that develop different packaged food products. The main goals of these companies are to meet consumers’ needs and preferences while generating superior returns by delivering consistent growth in sales and earnings, coupled with an attractive dividend yield. This report shows how each company meets their goals and which one is in better standing.

Consumers shift their tastes away from high fat, high sugar and non-nutritive foods toward healthier, organic and nutrient products. Hence, market needs to offer a number of high quality, healthier, and organic foods with better pricing because price matters most to consumers due to low switch cost in CGP segments. Kraft has struggled with its decreasing sales since The Mondelez International split off in 2012. It is also facing low operating margins due to inefficient factories and numbers of waste materials during manufacturing process. Compare to its 2014 and 2013 fourth quarter reports, it shows that 2014 grow profit decreased 75.6% since cost of sales increased 58.6% from 2013.

As discussed in Chapter 21 of our text book, any company that is looking to expand globally must make five key decisions. A firm must decide if: a) they really want to expand to the international market; b) they

In a market with such competitors as The Hershey Business, Kellogg as well as General Mills, it is believed that Kraft will certainly continue to gain from its cost conserving campaigns and also will continue to be a strong investment opportunity for shareholders. In a claim at the 2013 Citi Global Customer seminar, Irene Rosenfeld stated that Kraft lately "worked with as

This results from the fact that it is a mature segment with many well established companies vying for market share. The industry is highly consolidated and very fragmented. To grow their businesses, companies rely heavily on mergers and acquisitions to capture additional market share. Historically, the grocery industry has been characterized by slow growth which results in strong price competition and the development of aggressive marketing campaigns between existing firms. Perceived product quality and strong brand recognition by consumers are the basis of competition among firms in the industry. The source of General Mills’ competitive advantage lies in its ability to develop innovative products and highly reputable brands. As a result, they hold cost leadership positions across a number of grocery categories. Exhibit 1 shows the top US companies according to their sale of packaged foods globally. Market leaders include Kraft Foods, PepsiCo, Nestle, Mars, Kellogg, and General Mills, however, neither company possess an overwhelming share of global sales. This is in part due to the large degree of product diversity throughout the industry and the strong brand rivalry of each competitor’s labels.

According to Slack et al. The corporate strategy or business strategy is the guide lines for the whole corporation’s businesses in relation to its markets, customers, and the competitors (2007). In the same context, the same authors discussed the link between the corporate strategy and

Mondelez International is an American multinational confectionery, food, and beverage company. I have been given the opportunity to analyze all ratios 8-14 for Mondelez. After a careful review of the Consolidated Balance Sheet, I am able to give the following analysis based on various ratios used to determine how well the company operates.

Earlier Heinz was a leverage buyout in 2013 through 3G Capital by Berkshire Hathaway. On the other hand Kraft Food Group was formed in October 2012, after a spin off from international snack food company Mondelēz International (MDLZ).

In 2010 Cadbury was sold to the multinational food corporation which merged with Heinz later on and is now operating under the name Mondelez. The takeover for $21,8 billion finally ending an area of the Quaker ideology in the company. Mondelez is a multinational cooperation with a net revenue of approximately $30 billion in 2015 (Mondelez, 2016). In their fact sheet of 2016 the company explains further “About 85 percent of our annual revenue is generated in fast-growing snacks categories, and nearly 75 percent of our sales come from outside of North America”. Shareholders are interested

Strategy has come to play a significant role in international business (IB) in recent times. This is predicated on the fact of complexities associated with globalisation. The interplay of various factors of production in an environment could have been sufficient for MNEs in taking investment decisions. However, experience has shown otherwise. In this light, strategising in the international business arena has been dominated by industry and resource based views, somewhat ignoring the magnitude of institutional impact on investment decisions.

Competitive Rivalry within an Industry Very high – Kraft Foods has to face a lot of competition