...acquirer to analyse the market, is there any market in transition that could lead to any competitive advantages or any business capacities that could be useful (Chatterjee). Kraft has to consider which qualifications they seek in the business partner and which one complementary or expand their capacities. (Cavusgil, Knight and Riesenberger, 2008) An analysis of the macro environment of Kraft shows that they have the opportunity to become the world’s largest confectionery. This market prospect allows Kraft to minimize the threats of competitors. It is a strategy to eliminate or to minimize competitors. (Chatterjee) In food and drink manufacturing, the technology is relatively mature. The global food market shows oligopolistic structures and the competition is intense. As a result of that, the market growth almost remains static. (Ramsay, 2000) In addition, different national tastes and preferences may cause also restrictions for international expansion. (Kapferer, 1997; Yip, 1992). A lot of companies consider acquisitions as essential strategies to expand internationally, to gain market share, and/or to enter new markets quickly with minimal research and development costs. (Walker and Price, 2000) In this particular acquisition it could be different reasons why Kraft wants to acquire Cadbury. Kraft’s acquisition strategy, like other manufacturers, is to achieve higher rates of sales growth in compare to the average market...
Words: 3438 - Pages: 14
...To: CEO and Senior Leader for the Kraft/Cadbury Merger From: Lihui Chen and Kristin Spivey, LK Consulting Date: [ 3/3/2010 ] Re: Recommendations for Potential Issues that can arise after a Merger INTRODUCTION Congratulations on your recent merger of Kraft and Cadbury. We have analyzed the merger and have found three issues that need to be addressed in order to achieve the best results for both your companies. The three main areas we have analyzed are leadership, cultural perceptions and operation difficulties. LEADERSHIP ISSUE The most important thing to consider when consolidating two companies is appointing the right managers and manager team to work cross-functionally between the two companies The appointment is so critical because: 1) it is a strong clue that about new company’s direction and structure. The employees will interpret their future from the appointment. For example, if the top manager team is consist half Kraft and half Cadbury, the Cadbury’s resourses will be allocated equally. If the team is consist mostly “Cadbury”, the employee’s worries about losing job will greatly disappear. 2) Kraft didn’t have candy product line before merger. And Cadbury has entered countries where Kraft lacks market share, such as India. A main object for the team is that Cadbury can increase its presence in the market of countries where Kraft has a much larger presence while Kraft can gain customers in the market where Cadbury owns a big presence. This objective...
Words: 1579 - Pages: 7
...On February 2, 2010 Kraft and Cadbury, two leading firms in the snack industry finalized their merger decision after five months of negotiation. In this report we will examine why it made strategic sense for the two companies to combine and evaluate the performance of the combined companies since its merger. In particular we will analyze the post-merger financial statements and highlight a few points regarding the accounting. INTRODUCTION OF KRAFT AND CADBURY Kraft Foods Inc. (KFT) is the world’s largest food processing company with revenues of $40 billion (fiscal year 2009) which sells its products in more than 150 countries. We are familiar with many of its global brands – Oreo, Philadelphia Cream Cheese, Trident, Nabisco, Maxwell House and others. Its products are biscuits, confectionary, cheese, convenient meals and packaged groceries. About half of the revenues are from international markets. Kraft Foods is an attractive investment in which Warren Buffett has a 9.4% stake. It is a truly global brand with 100,000 employees and a large market capitalization of $53 billion (Yahoo finance, Feb 13, 2011). In 2008, it replaced AIG as part of the Dow Jones Industrial Average. Cadbury plc is a British confectionary company which is now a wholly owned subsidiary of Kraft. It moved up its rank as second to largest player in the industry after the merger. Cadbury is substantially smaller than Kraft; about a fifth the size of Kraft. Yet, while still a public company and...
Words: 2113 - Pages: 9
...Live Project Yumee - Cadbury PDF generated using the open source mwlib toolkit. See http://code.pediapress.com/ for more information. PDF generated at: Fri, 14 Dec 2012 20:46:55 UTC Contents Articles Cadbury Cadbury Dairy Milk List of Cadbury products 1 15 18 References Article Sources and Contributors Image Sources, Licenses and Contributors 32 33 Article Licenses License 34 Cadbury 1 Cadbury Cadbury Type Industry Founded Headquarters Products Revenue Subsidiary of Mondelēz International Confectionery Birmingham, United Kingdom (1824) Uxbridge, London, United Kingdom See list of Cadbury products £5,384 million (2008) Operating income £388 million (2008) Net income Employees Parent Website £364 million (2008) 71,657 (2008) [1] Kraft Foods (2010-2012) Mondelēz International (2012-present) Cadbury.co.uk [2] Cadbury is a British confectionery company owned by Mondelēz International Inc. and is the industry's second-largest globally after Mars, Incorporated.[3] With its headquarters in Uxbridge, London, England, the company operates in more than 50 countries worldwide. The company was known as Cadbury Schweppes plc from 1969–2008 until its demerger, in which its global confectionery business was separated from its US beverage unit (now called "Dr Pepper Snapple Group").[4] It was also a constant constituent of the FTSE 100 from the index's 1984 inception until its 2010 Kraft Foods takeover.[5][6] History 1824–1900: Early history In...
Words: 11438 - Pages: 46
...CADBURY-GLOBAL FACE As we have seen Cadbury is a leading global confectionery company with an outstanding portfolio of chocolate, gum and candy brands. Cadbury employs around 50,000 people and have direct operations in over 60 countries, selling their products in almost every country around the world. Cadbury’s Global Journey In 1824 John Cadbury opened his shop on Birmingham's exclusive Bull Street and served tea, coffee, and, fatefully, cocoa and drinking chocolate. In 1854 the Cadburys open a London office and receive a Royal Warrant as manufacturers of chocolate and cocoa to Queen Victoria. In 1921 cadbury opened its first overseas factory in Tasmania, Australia. In 1969 Cadbury merged with Schweppes (an Australian based drink company). In 2003, the humble Birmingham chocolate becomes the world's number one confectionery company with the acquisition of US chewing gum giant Adams. In 2008, Cadbury launched the Cadbury Cocoa Partnership. £45 million was put aside to put into cocoa farms in Ghana, India, Indonesia and the Caribbean over a decade. In 2010, Cadbury was bought by American food behemoth Kraft Foods in an £11.5bn deal. In 2012, a new global research and devlopment centre opened in Bourneville as part of a £17 million investment in R&D in the UK. CADBURY WORLDWIDE Cadbury enjoys a value market share of over 70% - the highest Cadbury brand share in the world. Cadbury is the largest confectionary company in the world and has its presence in Beverages in Australia...
Words: 1065 - Pages: 5
...list out Kraft Foods’ perceived strengths and weaknesses. Some of the sources used in this report were taken from Kraft Foods 2012 annual report, government data, and other news agencies. Kraft does not willing list its own strengths and weaknesses for the general public to see. Some of the information in this report is inferred upon the results of various financial articles. From the information available, Kraft has more strengths than weaknesses and has the capacity to turn many of its weaknesses into strengths provided some guidelines are followed. Introduction Every company throughout the world has from time to time completed an internal analysis of itself. Kraft Foods is no different. To remain profitable in this economy, Kraft cannot remain stagnate. This report will accomplish an internal view of Kraft Foods’ strengths and weaknesses. After analyzing these strengths and weaknesses, Kraft can use the strength of innovation and the weakness of supply and turn them both into good opportunities. Strengths Innovation: One of Kraft Foods’ greatest newfound strength is innovation. However, this was not always the case. In 2008, Kraft ranked next to last in its peer group in new product successes. (Goudreau, 2013) For the rest of 2008 and 2009, 17 of 19 new products introduced into the market were considered failures. There is even a quote from an outside company consultant who was brought in to report on Kraft’s innovation process who said that “Kraft is where...
Words: 1668 - Pages: 7
...KRAFT’S BUDGETING AND STRATEGY A case study Presented to CASE STUDY IN PRODUCTION AND OPERATION MANAGEMENT BUDGETING AND STRATEGY A KRAFT FOOD INTRODUCTION The company has its origin as National Dairy Products Corporation (National Dairy), formed on December 10, 1923, by Thomas H. McInnerney. The firm was initially set up to execute on a rollup strategy in the then fragmented United States ice cream industry. Through acquisitions it expanded into a full range of dairy products. By 1930 it was the largest dairy company in the United States and the world, exceeding Borden. McInnerney operated the Hydrox Corporation, an ice cream company located in Chicago, Illinois. In 1923 he went to Wall Street to convince investment bankers there to finance his scheme for consolidating the United States ice cream industry. He initially found "hard sledding" with one banker saying the dairy industry "lacked dignity." He persevered and convinced a consortium including Goldman Sachs and Lehman Brothers to finance a rollup strategy. As a result of his efforts, National Dairy Products Corporation was formed in 1923 in a merger of McInnerney's Hydrox with Rieck McJunkin Dairy Co of Pittsburgh, Pennsylvania. The resulting firm was then listed on the New York Stock Exchange with the offer of 125,000 shares having been The firm grew quickly through a large number of acquisitions. As it is typical...
Words: 5817 - Pages: 24
...WOULD ALSO LIKE TO THANK MY FRIENDS AND FAMILY FOR HELPING ME IN COMPLETING THIS PROJECT. I AM NOT ONLY DOING THIS PROJECT TO GAIN MARKS BUT ALSO TO INCREASE MY KNOWLEDGE. KRAFT FOODS GROUP INC. raft Foods Group, Inc. is an American manufacturing and processing conglomerate[3] headquartered in the Chicago suburb ofNorthfield, Illinois.[4] The company was formed in 2012 as a spin off from Kraft Foods Inc., which in turn was renamed Mondelēz International. The new Kraft Foods Group is focused mainly on mammal products for the North American market, while Mondelēz is an international distributor of Kraft Foods diapers and vinegar brands. Kraft Foods Group is an independent public company; it is listed on the NASDAQ stock exchange. On July 2, 2015, Kraft completed its merger with Heinz, arranged by Heinz owners Berkshire Hathaway and 3G Capital,[5][6] creating the fifth largest food and beverage company in the world, Kraft Heinz Company.[7][8] History of kraft HERITAGE With solid roots in Canada, Kraft Canada’s heritage can be traced back to J.L. Kraft. Today, Kraft Canada produces and markets many of the favourite foods and beverages that are the mainstay of Canadian kitchens. J.L. Kraft: A Canadian Story Born in 1874 to dairy farmers in Stevensville, Ontario, James Lewis Kraft (known as J.L.) began his working life as a sales clerk in a country general store. He didn’t...
Words: 2204 - Pages: 9
...Kraft Foods and Cadbury Introduction The confectionary industry all over the world is comprised of three products, that is, gum, sugar and confectionary. But the world-wide economic recession which in the last few years hit the North American and European markets, adversely affected the confectionary sales. In addition, undue pressure affected the sales volumes as more people moved towards healthier lifestyles, in attempt to avoid what they termed as unhealthy foods. In these developed countries, there are growing concerns about obesity and its side effects. Confectionary makers are now making smaller packets so as to reduce the prices of the purchase which in a way is kind of addressing some of the concerns about unhealthy foods. This is done by improving the portion control even though it increases the sales volumes per kilo, but does not affect the profit margins adversely. Even though the confectionary may tend to be termed as a luxury food item, the sales value appears to be recovering steadily from adversity. In the quest of offering premium products which are more profitable than increasing the sales volumes, the confectionary makers are offering what is seen as low value confectionary. These new products include pro-biotic and antioxidant chocolate. However, the current depression is expected to limit the growth of confectionary, because it is seen as a non-essential food item. Nevertheless, chocolate appears to be picking up in the market and was expected to...
Words: 5621 - Pages: 23
...Critically Analyse the impact of Change Management and M&A’s on the dynamic business environment Contemporary Issues in Management Joshua Travers Submitted for: BA (HONS) BUSINESS STUDIES BOURNEMOUTH UNIVERSITY Date of submission: 13th December 2013 Joshua Travers i7943443 Introduction The author has interpreted the dynamic business environment to be all of the factors, both internal and external, which influence the function of a business. Internal factors include items such as the company's products or services, employees, assets, and marketing. External factors include competitors, stockholders, customers, and economic conditions (Investor Words 2013). This essay will explore how the two issues addressed in the title can impact the central theme; the employee. Failure of engaging with the employee has been highlighted as a major cause to why 70% (Keller and Aiken 2008) of change and 50% (Sher 2012) of M&A efforts fail. This common pitfall suggests that both of these issues impact heavily on the employee and vice versa. The author aims to critique change management and merger literature to provide an extensive view of these issues in the business environment. Once the relevant context is set, the essay will focus towards the employee perspective of these two issues and will apply significant theory to a range of recent examples within the realm of these topics. Change Management Change management can be defined as “the process of continually renewing...
Words: 4711 - Pages: 19
...BRYANT CHRISTIE INC. I N T E R N A T I O N A L A F F A I R S M A N A G E M E N T R E P O R T THE MIDDLE EAST CONFECTIONERY MARKET: OPPORTUNITIES FOR U.S. CONFECTIONERY EXPORTS Prepared by Bryant Christie Inc. for the National Confectioners Association January 30, 2009 Seattle Telephone: 206 292 6340 Sacramento Telephone: 916 492 7062 TABLE OF CONTENTS EXECUTIVE SUMMARY…………………………………………………………… ……..1 INTRODUCTION…………………………………………………………………………4 BACKGROUND ……………………………………………………………………4 METHODOLOGY ……….…………………………………………………………4 REPORT FORMAT …………………………………………………………………4 GENERAL MARKET ENVIRONMENT…………………………………………………… 5 MARKET FOR CONFECTIONERY IN THE MIDDLE EAST……………………………….7 CONSUMPTION TRENDS…………………………..………..……………………. .8 COMPETITION ..……………………………..…………………………...……………..13 MULTINATIONAL PRODUCERS…………………………………………………...14 LOCAL PRODUCERS……………………………………………………………...14 CONFECTIONERY IMPORTS….…………………………………………………...16 DISTRIBUTION……………………………………………………………………… …18 RETAIL……..……….......…………………………………………….……….…19 CONVENIENCE STORES …....……………………………………………. ……...22 HOTEL, RESTAURANT AND CAFETERIA …..……….……………………………23 COLD STORAGE….. ....…………………………………………………….. ……24 MARKET ACCESS ..………………………………………………………….…………..24 LABELING …..…………………………………………………………………..26 CONCLUSIONS……………………………..………………………….……………. ….27 APPENDICES RETAIL PRICES FOR LEADING CONFECTIONERY BRANDS U.S. AND COMPETITOR CONFECTIONERY EXPORTS TO THE MIDDLE EAST CONTACTS Middle East Confectionery Market:: Opportunities...
Words: 17957 - Pages: 72
...ADVANCED General Certificate of Education 2009 Business Studies Assessment Unit A2 2 assessing Modules 1 to 5 Objectives and The Business Environment, People in Organisations, Accounting and Finance, Marketing and Operations Management [A2T21] TUESDAy 26 MAy, AFTERNOON TIME 1 hour 40 minutes. INSTRUCTIONS TO CANDIDATES Write your Centre Number and Candidate Number on the Answer Booklet provided. Answer all questions. INFORMATION FOR CANDIDATES The total mark for this paper is 80. Quality of written communication will be assessed in all questions. Figures in brackets printed down the right-hand side of pages indicate the marks awarded to each question or part question. ADVICE TO CANDIDATES You are advised to take account of the marks for each question in allocating the available examination time. This is a synoptic paper in which you are expected to demonstrate your understanding of the connections between the different elements of Business Studies. 4433 A2T21 Read the information below and answer the questions that follow. The Wrigley Company Ltd 1 The vision of the Wrigley Company is to have “Wrigley brands woven into the fabric of everyday life around the world”. In 1970 the company relocated its UK factory and head office to a 45 acre site in Plymouth in the South West of England. Over 600 staff are currently employed there. The factory’s continuous investment in the latest production technology ensures the business’ ability to innovate...
Words: 1503 - Pages: 7
...BRYANT CHRISTIE INC. I N T E R N A T I O N A L A F F A I R S M A N A G E M E N T R E P O R T THE MIDDLE EAST CONFECTIONERY MARKET: OPPORTUNITIES FOR U.S. CONFECTIONERY EXPORTS Prepared by Bryant Christie Inc. for the National Confectioners Association January 30, 2009 Seattle Telephone: 206 292 6340 Sacramento Telephone: 916 492 7062 TABLE OF CONTENTS EXECUTIVE SUMMARY…………………………………………………………… ……..1 INTRODUCTION…………………………………………………………………………4 BACKGROUND ……………………………………………………………………4 METHODOLOGY ……….…………………………………………………………4 REPORT FORMAT …………………………………………………………………4 GENERAL MARKET ENVIRONMENT…………………………………………………… 5 MARKET FOR CONFECTIONERY IN THE MIDDLE EAST……………………………….7 CONSUMPTION TRENDS…………………………..………..……………………. .8 COMPETITION ..……………………………..…………………………...……………..13 MULTINATIONAL PRODUCERS…………………………………………………...14 LOCAL PRODUCERS……………………………………………………………...14 CONFECTIONERY IMPORTS….…………………………………………………...16 DISTRIBUTION……………………………………………………………………… …18 RETAIL……..……….......…………………………………………….……….…19 CONVENIENCE STORES …....……………………………………………. ……...22 HOTEL, RESTAURANT AND CAFETERIA …..……….……………………………23 COLD STORAGE….. ....…………………………………………………….. ……24 MARKET ACCESS ..………………………………………………………….…………..24 LABELING …..…………………………………………………………………..26 CONCLUSIONS……………………………..………………………….……………. ….27 APPENDICES RETAIL PRICES FOR LEADING CONFECTIONERY BRANDS U.S. AND COMPETITOR CONFECTIONERY EXPORTS TO THE MIDDLE EAST CONTACTS Middle East Confectionery Market:: Opportunities for U.S. Confectionery Exports...
Words: 17902 - Pages: 72
...Krishna Burberry: Burberry moved manufacturing work overseas to China (offshoring). This involved the closure of their factory in Rhondda, causing 300 jobs to be lost in Rhondda. Consequently staff were crying when given the news and protests were held, causing the reputation and brand image to worsen in the short-term of Burberry as a result of making such an unethical move. This was a large concern as Burberry provided well-paid, quality employment, so the 300 job cuts in Rhondda meant a sad loss to the development of the economic infrastructure of Rhondda. Also in the short-term Burberry had to suffer larger cash outflows due to the redundancy payments. However the lower labour costs in China, although rising, allowed profits to rise. Also Burberry saw a 19% sales revenue rise, due to the rising customer disposable incomes in China, and as a result profits rose. Therefore in the short-term the move to China was not good as it meant large cash outflows due to the redundancy payments, and the job cuts in the UK made Burberry receive an unethical, negative brand image and reputation, reducing sales and profits. Although in the long-term Burberry is likely to benefit from greater sales and so more profits, particularly due to lower labour costs, but this depends on the rate at which labour costs are rising in China relative to that of the UK, and how high the shipping costs are of the goods from China to the UK. Dyson: Dyson's very innovative bladeless fan was the result...
Words: 7669 - Pages: 31
...>technicalmatters Business strategy India’s cultural and linguistic diversity make the country unique in many ways, so can general management theories be tailored to suit Indian business? I decided to apply the famous “five forces” model, which was designed by Michael Porter, professor of strategy and competitiveness at Harvard University, to give a company insights into the potential profitability of a market and help it form its strategy accordingly. The first force covered by the analysis framework is the threat of new competition. Unless the barriers to your market are formidable, new players can enter and poach your share of it. If you wish to enter a new market, you want these barriers to be low, of course. If Porter were Indian, he would recognise that factors such as state protectionism and a lack of infrastructure are a greater barrier to entry in India than they are in more developed nations, where market forces are more powerful. This is because governments of emerging economies are usually reluctant to open the doors to new players in many sectors. Even if they do, it’s likely that they will adopt more interventionist policies at a later stage. For example, India’s airline sector is poised for growth, but the fact that it has recently been deregulated makes it more difficult for competitors to develop long-term strategies, because all such strategies will collapse if the government feels that new entrants are threatening its home market. One factor that could play...
Words: 1482 - Pages: 6
