Mgt599 Case 3

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.

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?

But one thing is quite evident that both Apple and Cadbury have adopted a strategy that includes both push and pull methods. It is not rare or extraordinary at all. Most of the organizations use a mixture for push and pull strategy in the supply chain management. Both of these companies make a plan and set a goal forecasting the market position and consumer demand. But they do also focus on the real-time stats and data obtained from market research and response from the distributors. Therefore, the first part of the strategy pushes the product toward the consumer, but the later part pulls feedback from consumers to make their product

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.

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.

Since Kraft Food’s gained its independence last year, it has seen a 6.4 percent reduction in grocery sales from the previous year across the board with only a slight increase in cheese as all other took a loss thus far. It is expected that for the 2013 fiscal year Kraft should reflect earning of $3.40 per share, this is up from the previous estimation of $2.75 per share. Overall Kraft will probably be in line or slightly lower than originally projected. (NASDAQ)

In the last 4 years Kraft Foods are on a positive trend with most of $49,207 billion of sales in the last year, 2010. The effects of the crisis can be also seen as 2009 is the only position when the trend was disrupted. In spite of this they their net profit continues to skyrocket (Appendix 1).

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.

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).

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.

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

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

A firm’s structural choices always involve two opposing forces: the need for differentiation (focusing on and specializing in specific markets) and the need for integration (coordinating those same markets). The way a firm is organized along the differentiation-integration continuum determines how well strategies, along the localization-globalization continuum, are implemented. A globalization strategy treats the world as one market by using a standardized approach to products and markets.

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