Heinz And Beech-Nut Merger Essay

against Kellogg, General Mills, and General Foods (then the maker of the Post line). The FTC argued

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.

On particular piece of evidence that can be shown to the FTC is in that the elasticity of demand either remained unaffected by this merger or that it increased. Taking this into consideration, if a comparison of price elasticity was done before and after the merger, there would be proof that consumers still had a large amount of substitutes available in the market. Depending on the type of market present, such as a Global Market, it would be relatively simple to prove the wide array of substitutes that were available to the consumers. This particular merger may have been done for what every company is looking for, which is cost savings. One other form of evidence to be provided to the FTC is a statement of costs, which should show costs before and after the merge.

Competitors: Our primary competitor is Heinz 57. They have a market share of 16%. The secondary competitors of our business are private labels. They have a market share of 14%. The rest of the competitors towards our company make up the 16% of the market share. A new rising competitor is Lawry’s with new product, steak sauce.

The predominant view in the United States is that The Sherman Antitrust Act of 1890 was passed with the intent to protect consumers from inefficient market forms, and predation by large corporations. The specific provisions of the Sherman Act, as well as the later Clayton Act of 1914, prohibit acts that are considered to be anti competitive such as cartels, monopolies, price discrimination, and predatory pricing. Mergers and acquisitions are also individually reviewed to ensure they won 't have an anti competitive effect on the market. We will look at each of these acts to try to determine their actual impact to the consumer. We will also

The second force that I will use to analyze the Trader Joe’s company is the “the rivalry among established competitors”. Factors to consider when looking at the rivalries in the industry are industry demand, cost conditions, and exit barriers. Trader Joe’s competitors include The Kroger Co., Whole Foods Market, and Safewat Inc., and all super markets in general (Llopis, 2011). With that said, there seems to be a high demand for what Trader Joe’s offers, private labels. This means that the intensity in the industry is less compared to an industry with a flat demand. Trader Joe’s does not have to fight hard to sell their products because of the service they have created. Trader Joe’s brand can be considered “diversity on steroids” which has somewhat of a cult following among consumers (Llopis, 2011). Consumers that want unique experiences with their food are able to do exactly that at

mother’s recipe. As the story goes, Heinz was traveling on a train when he saw a sign advertising

Kraft is clearly a strong competitor, as they remain one of the top contenders in each of their industries. They are able to strongly differentiate their products from those of other companies to capture a large share of the markets they participate in. They have a wide array of products that can serve as subsituties for each other to keep consumers within their brands, but give them options on which products to consume.

The European Commission believed that allowing the merger was in the best interest of both consumers and for the beer market itself. I wholeheartedly disagree with that decision. Consolidating firms only decreases competition. John Colley, associate dean at Warwick Business School agrees, "Generally speaking, as industries consolidate down to fewer players, prices increase because there is less competition… You tend to end up with less choice of products too” (Thomas). There are four major European beer brewers and with this merger two of the largest are now consolidated. The consolidation “significantly increased the number of national markets where the merged entity and the two

Where did Quaker go wrong? What could it have done differently? Is Cadbury in danger of making the same mistakes as Quaker did?

Merger proves to be beneficial for both the companies as Heinz 61% sales from outside North America and on the other hand Kraft Foods sales is covered by 98% from North America for the revenues in the fiscal year 2014. This gives a big boost for the Kraft Food to enter and tap the international emerging markets for its strong growth also. As

Chocolate was not the only sweet food Nestlé became interested in however. Ice cream represented a profitable opportunity and the company jumped at the chance through the merger with US ice cream business Dreyer’s (2002) and the acquisition of Mövenpick Ice Cream (2003), further improving the position as a market leader in the super premium category. Nestlé also decided to take a chance with two niche markets in the food industry: pet food and frozen food. In 2001, Nestlé merged with Ralston Purina and they formed a new pet food company, Nestlé Purina PetCare Company. As for the frozen food, Nestlé acquired Chef America Inc. (2002) and Kraft Foods’ frozen pizza business (2010). Beyond horizontal integration, Nestlé diversified outside its core business, thus becoming one of the major shareholders of L’Oréal, as well as acquiring Alcon Laboratories in 1977, an American company specialized in products for eye

Answer: Based on the case study, Kellogg’s main competitors in the ready-to-eat cereals market are General Mills and Kraft Foods and PepsiCo. In the convenience foods market, the main competitors are Frito-Lay unit of PepsiCo which is the largest maker of salty snacks while the Nabisco unit of Kraft Foods which is the largest maker of cookies and crackers. Except from these competitors, Kellogg also has been facing competition with the new entrants or the improved store brand products which intent to get some shares of these two markets. Also, Kellogg’s brand

The threat of off brand or store brand condiments is very significant to Heinz. The rising popularity of salsa and similar international condiments is also something of which Heinz must be aware. The new trend of dieting and losing weight could also be a threat to the Heinz company. As people tend to eat healthier they may consume less Bagel Bites, and Boston Market gravy. The strength of the American dollar and economy is a serious threat to realized profits for Heinz. Heinz is very susceptible to international food regulations as well. They should have a plan of action if something similar to Mad-Cow occurs, affecting one or some of the ingredients of their products.

Sarah Talley and Wal-Mart are in a distributive negotiation as they only haggle about the price for 4th of July Watermelons (Lewicki, Saunders& Barry 2011). Rather than giving a “why” Wal-Mart persists with the position that the price is “too high” (Sebenius & Knebel 2006). In price-only negotiations only one party can win. Furthermore, there is a huge power difference due to Wal-Mart’s high position of strength which is based on their size (Lewicki et al. 2011). In the end these negotiations ended with Wal-Mart having to pay higher prices and with Frey Farm selling less volume at lower profits as they became a co-managed