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Memorandum
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 requires the team to learn from each other and cooperate well with open mind
In the integration process, the team should pay attention to keep internal business stable. Anxiety always arises inside and outside the company through merger because people will react to ambiguity. For example, the Kraft’s CEO promised $675 million of annual cost saving from the merger which might

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