Kraft and Cadbury Merger Analysis Essay

With global hunger at the forefront of world issues today, Kraft-Heinz has made a commitment to provide 1 billion meals to people in need by 2021, as a part of their company vision "To be the Best Food Company, Growing a Better World." Their CSR program will make a considerable difference in the fight against hunger and malnutrition while ensuring sustainable food practices are achieved. Kraft-Heinz is committed to nourishing all lives and making the world a better place to live.

Even through years of an economic recession which began in 2008, the company actually performed relatively well. Because consumers were eating more at home and less in restaurants, the company was positioned to take advantage of conservative shoppers. In an interview with USA Today, CEO Rosenfeld commented that, even though the economy had softened worldwide, “We’re seeing (strength in) products that provide obvious value: powdered beverages like Kool-Aid and Crystal Light” (“CEO Forum”). When the global food market began to see recovery, Mondelez International experienced that recovery in its bottom line. “In its results for the third quarter ending September, Mondelez’s net earnings rose 57.1% to $1.02 billion, from $652 million in the same quarter last year” (Khan). The future also looks promising for the company as it continues to focus on emerging markets. “Despite the mixed performance, Mondelez is well positioned for long-term growth in the emerging markets. While it has witnessed revenue declines in China, it still remains the leading player in the biscuits, coffee and gum categories in the country” (Kahn). Throughout any economic global downturn, the company has not strayed from its commitment to diversity, and perhaps this philosophy has eased the effects of the

• Kraft Foods Inc., is the largest food and beverage company in North America and the second largest in the world. Was founded in 1903 by James L. Kraft.

The company may now be known as just Kraft Foods Group but the slogans “make today delicious” and the old statements about healthy enjoyable food still stands true. Just like everything in life, things must adapt and grow with time. So being the best food and beverage company means having healthy and delicious food.

(Finical Times, 10 Feb2010) The challenges on the transaction was, firstly taking over a company that was not on sales and rejection to be made by shareholder as the Cadbury owner believed the chocolate company would be engrossed into Kraft’s low growth. Cadbury the chocolate producer was finally acquired for £11.4bn by Kraft US food company.

SG&A expenses of $1,630.9 million in FY2012, $1,625.8 million in FY2011 and $1,644.1 million in

As I mentioned above, Mondelez was created to fit a need that Kraft Foods Inc. had to increase their growth globally. Kraft Foods Inc. established their name in 2007 when they broke apart from Altria Group. Kraft became the second-largest processed food company in 2012 with annual revenues of more than $54 billion in 2012 (Gamble, 2016). However, significant growth in the company was not much different from that in 2007 when they became independent. It is the belief of the company’s upper management and board that the reason for their stagnation was due to the fact that their corporate strategy was not focused on the growth of the company.

2. Kraft’s marketing strategy will benefit significantly from buying Cadbury in two different ways. Firstly, when we look at the brand portfolio of Kraft, which is the world’s second biggest food company. It is clear that there are plenty of old-timer cash cows, such as cheese, Nabisco and Suchard, but there are only very few rising stars. According to the Boston Matrix, cash cow means a product with a high share of a slow growth market, which can generate a stable

This memo is in regard to a recent horizontal and vertical analysis performed on Kudler Foods. The analysis completed was to inform the company of potential interests from different users. The users will be able to use ratios calculated to reveal performance and the current position of the company. The vertical and horizontal analysis is attached along with calculations of liquidity, profitability, and solvency ratios.

Brand building, consumer health and wellness, and advertising and promotions were all critical to success in the industry. Kraft’s ability to compete with lower priced snacks showed its ability to differentiate itself from other lower priced competitors.

Analysis of the Cadbury Business The person, who created the Cadbury business, is John Cadbury in 1824. The business started as a shop in a fashionable place in Birmingham. It sold things such as tea and coffee, mustard and a new sideline - cocoa and drinking chocolate, which John Cadbury prepared himself using a mortar

Industry Analysis: Cadbury Schweppes (CS) is comprised of a global confectionery and beverage company. For the purpose of this case we will maintain our focus on the confectionery business and the assessment of adding to their sugar confectionery portfolio. CS is number three in the beverage business but see the opportunity to become the largest confectionery in the world. The categories are chocolates, sugar and chewing gum. At this time Adams is the number two sized in the gum business. This industry operates on “bigger is better in confectionery”. Their strategic discussions and ambitions appear to stay true, in mentality, to this mantra. This mantra could be potentially dangerous to the business. CS had a presence in over 70

Strengths of this brand include: it is the 4th largest marketer, brand longevity, and it has a large/high awareness in big cities. Its’ weaknesses are: low market share, low market coverage, limited bottlers’ network, relatively low advertising

In the late 1990’s and early 2000’s the food industry was struggling with weak sales and low inflation which caused waves of consolidation among some of the largest firms in the industry. In 1998 General Mills studied areas of potential growth and value creation for their company which lead to small acquisitions of other firms. Looking to further grow their company, in December 2000, management of General Mills made a recommendation to its shareholders that they authorize the creation of more shares of common stock and approve a proposal for the company to acquire Pillsbury Company, a producer of baked goods, from Diageo PLC.

Whilst the definition of corporate governance most widely used is "the system by which companies are directed and controlled" presented by Cadbury Committee, (1992). More specifically it is the framework by which the various stakeholder interests are balanced, or, as the IFC (International Finance Corporation) states, "the relationships among the management, Board of Directors, controlling shareholders, minority shareholders and other stakeholders".