5 Group Thinking

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Apr 3, 2024

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Gustavo Murtha, Matthew Coleman, Nils Roth, Paul Suarez Mondelez International, Case #21. Problem/Opportunity Statement As the snack food industry is constantly becoming more competitive and challenging, Mondelez must maintain competitiveness, sustain its company growth, and look to enter new, less crowded markets. Situational analysis Product Diversification Currently, Mondelez has tried to focus on producing/delivering high-growth snack categories, including gluten-free products and nut-free products. Mondelez has acquired companies with proven track records, such as Enjoy Life Foods. This approach allows them to maintain competitiveness as they expand into new markets with potential growth. International Market Diversification Mondelez has operations in over 80 countries from all over the globe. The company has an impressive 79% of its revenue generated overseas (outside the US). Mondelez's strategy has focused on emerging markets rather than markets with a high concentration of popular snacks. They have looked to deeply understand the needs they enter in new parts of the globe where disposable income is increasing rapidly. Acquisitions Mondelez acquires multiple companies that can benefit the company in the future as they already have a solid track record in a market that Mondelez sees as a potential growth opportunity. For example, they acquired Enjoy Life Foods and a majority stake in Perfect Snacks. Strategic Sales to Focus on Profitable Operations Mondelez has reduced product portfolios indoors to focus on areas they know they can perform better. For example, they sold Trident, the chewing gum company, to shift their resources to snack regions where they were performing better. They sold 50% of a Japanese coffee Joint for $225 million. Appropriateness of Diversification Decisions Overall, most of the diversification strategies have been appropriate. Given the company's strength in focusing on emerging markets, their streamlining and reduction in areas that don't support this is a vital decision. It's tough to say how effective the strategies are given the reduction in revenue and profit over the years. Mondelez focuses on improving yields in

Gustavo Murtha, Matthew Coleman, Nils Roth, Paul Suarez the future, meaning they hope that their streamlining of businesses and diversification decisions will be profitable. Solution Statement Mondelez should strategically prioritize expanding into rapidly expanding emerging markets with targeted growth. They should also identify and acquire companies that have demonstrated effectiveness in productive industries and continue streamlining operations through strategic sales. With a stronger position and increased presence in potential regions, Mondelez can adapt to changing consumer preferences and maximize resources for long-term profitability thanks to these specific initiatives. Evaluated alternatives and their justification The company's proficiency in global marketplaces is demonstrated by its ability to generate revenue from activities abroad successfully. Although it necessitates in-depth industry analysis and adjustment to local preferences and habits, targeting emerging markets can result in significant growth. With their increasing disposable incomes, specific emerging markets should be Mondelez's key priority. They can access high-potential areas for long- term growth by carefully analyzing local tastes and designing products for these markets. It is recommended that Mondelez persist in optimizing its product portfolios by withdrawing from ventures or product categories that conflict with its expansion plans. They can reallocate resources to regions with greater efficiency and potential. Previous Trident sales and the partial sale of a Japanese coffee company demonstrate Mondelez's determination to focus on successful business ventures. More strategic sales must be carefully considered to ensure they allow opportunities for further expansion. By locating businesses with a track record in industries with development prospects, Mondelez can carry out its acquisition strategy. They can increase their market position by acquiring such firms and capitalizing on their track record of success. Enjoy Life Foods and Perfect Snacks, two of Mondelez's prior purchases, have demonstrated possibilities. Each acquisition involves extensive research to guarantee conformity with Mondelez's strategic goals for the future and culture. In addition to pursuing new, fast-growing food categories, Mondelez should continue expanding the variety of goods it offers beyond those free of nuts and gluten. To remain ahead of changing customer preferences, they may invest in research and development or acquire businesses specializing in emerging trends. This tactic is consistent with Mondelez's accomplishments in developing companies like Enjoy Life Foods, allowing them to enter new markets. Significant spending on research and development and thorough market research is required to guarantee alignment with recent consumer trends. Financial Analysis:

Gustavo Murtha, Matthew Coleman, Nils Roth, Paul Suarez The world’s second largest processed food maker achieved in 20121 annual revenues that exceeded the $54 billion threshold. The recipe for Mondelez International’s success is that the company carries in their portfolio multiple brands with annual revenues exceeding $1 billion each! BY 2016, the snack company had successfully achieved its internationalization goal by almost 80% of its revenue generated outside of the United States. However, no other nation than the U.S. accounts for 10% or more of Mondelez International’s sales which would speak for a spin-off of the North American grocery business. Unfortunately, the company’s stock performance as well as their revenues are declining and thus, we need to look deeper into their overall performance: Profitability Ratio: Gross Profit Margin: Mondelez International 2015 2014 2013 38.8% 36.8% 37.1% Return on Asset: Mondelez International 2015 2014 2013 11.6% % 37.1% Liquidity Ratio: Current Ratio: Mondelez International 2011 2010 0.84 0.82 Leverage Ratio: Times-interest-earned ratio: Mondelez International 2015 2014 2013 8.8 4.71 2.51 In this case, it makes sense to also analyse Mondelez International by their diverse products they carry in their portfolio which I did by comparing the Annual Growth Rates between the years 2013-2015:

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