...right company depends on the analysis of target market. Companies react when they recognize benefits in some certain markets. It is essential for an 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...
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...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...
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...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...
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...COMPANY ANALYSIS In 1898, several baking companies merged to form the National Biscuit Company (NaBisCo), the maker of Oreo cookies. By 1902, Nabisco created Barnum's Animal cookies and made them famous by selling them in a little box designed like a cage with a string attached (to hang on Christmas trees). In 1912, Nabisco had a new idea for a cookie - two chocolate disks with a crème filling in between. The first Oreo cookie looked very similar to the Oreo cookie of today, with only a slight difference in the design on the chocolate disks. Nabisco Oreo sandwiches, a brand that is older than the automobile assembly line. It is estimated that an average of 4.3 billion sandwiches have been eaten each year over the last 90 years. Nabisco, a business with a rich and colorful history, is able to trace its founding back to the late 1800s. In the next century, the company experienced a sustained period of growth and became no stranger to the process of mergers and acquisitions, before finally coming to rest under the considerable umbrella of Kraft at the turn of the millennium. Company Profile Kraft Foods (NYSE: KFT) is a global leader in branded foods and beverages with 2004 net revenues of more than U.S.$32 billion. Built on more than 100 years of quality and innovation, Kraft has grown from modest beginnings to become the largest food and beverage company headquartered in North America and second largest in the world, marketing many popular brands in more than...
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...MARKETING ANALYSIS TARGET SEGMENT 5 POSITIONING 6 MARKETING MIX (PRODUCT, PLACEMENT, PROMOTION, PRICING) 6-8 COMPETITOR ANALYSIS 8 KRAFT IN INDIA: FUTURE MARKETING STRATEGIES NEW PRODUCTS 8 INNOVATION 8-9 ACCOUNTING INCOME STATEMENT ANALYSIS 9 BALANCE SHEET ANALYSIS 9-11 VALUATION DISCOUNTED CASH FLOW (DCF) ANALYSIS 11 CONCLUSION 12 APPENDICES A. NET REVENUE BY OPERATING SEGMENT (2006, 2010) 13 B. HISTORY OF MERGERS, ACQUISITIONS & NAME CHANGES 14 C. NET REVENUE BY CONSUMER SECTOR (2006, 2010) 14-15 D. 11 $1 BILLION KRAFT BRANDS 15 E. 54 KRAFT BRANDS 16 F. KEY COMPETITOR ANALYSIS 17 G. HISTORY OF NEW PRODUCT INTRODUCTION (DOMESTIC) 18 H. SWOT ANALYSIS: KRAFT FOODS, INC. 19 I. SWOT ANALYSIS: CADBURY 19 J. SWOT ANALYSIS: OREO IN INDIA 20 K. EXAMPLE: OREO IN CHINA 20 L. INCOME STATEMENT: FORECASTING VARIABLES 21 M. INCOME STATEMENT (2008-2010 REAL, 2011- 2015 FORECASTED) 21 N. KRAFT OPERATING PROFITS BY SEGMENT 22 O. BALANCE SHEET: FORECASTING VARIABLES 23 P. BALANCE SHEET (2008-2010 REAL, 2011- 2015 FORECASTED) 24 Q. COMPOSITION OF DEBT 25 R. HISTORICAL CAPITALIZATION 26 S. LONG TERM AMORTIZATION TABLE 27 T. CAPITAL STRUCTURE DETAILS (2008, 2009) 28 U. HISTORICAL CASH FLOW 29 V. DISCOUNTED CASH FLOW MODEL - KRAFT 30-31 W. CAPITAL STRUCTURE 31 X. EARNINGS PER SHARE (EPS) 32 Y. KEY RATIOS 33 Z. MARKET CAPITALIZATION 34 AA. KEY EQUITY MULTIPLIERS 35 BB. KRAFT DEBT SCHEDULE 36 CC. NOTES TO WACC CALCULATION 36 DD. BETA CALCULATION: KRAFT 37 EE...
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...are priced according to their sizes. Chocolates like Diary Milk and Five Star can be got for just Rs 10. Chocolates in India are slowly and steadily substituting the mithai or traditional Indian sweets. Due to the increasing levels of social consciousness people prefer gifting well wrapped chocolate packets rather than sweets on occasions and festivals. Taking advantage of this situation GATHERING AND ANALYSING MARKET INFORMATION PRODUCTS Amul chocolates Parent Company Amul Category Chocolates Sector Food Products Tagline/ Slogan Taste of India USP Quality and affordability STP Segment Quality conscious children and adults Target Group Kids and youth Positioning Taste of India by giving them quality products SWOT Analysis Strength 1. Good product range which includes chocolates, toffees, syrups etc 2. Good quality and packaging 3. Excellent distribution network of Amul ensure availability 4. Branding and advertising through TVCs and print ads is popular 5. Pricing is good as it attracts large segment Weakness 1. Limited international presence as compared to leading global brands 2. Penetration in rural areas is still limited Opportunity 1. Tie-ups with hotel chains, restaurants 2.Special occasion packages 3. Global expansion and more rural penetration Threats 1. Local sweet dishes 2. Entry of other local or international brands Competition Competitors...
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...continue to create value for its shareholders. Kraft Foods Inc. (KFT) was a processed food company that produced big name brands, such as Oreo, Maxwell House, Honey Maid, among others. In 2012, the company was the second largest processed food company in the world based on revenues, after its main competitor Nestlé. However, slow growth in many critical industry segments meant that the company was unable to increase shareholder value throughout 2011. Additionally, sales were stagnating and revenues were only increasing by raising prices. In order to address these issues, the Board of Directors at KFT announced in 2011 that the company would be restructured to create two new companies by the end of 2012. First, there would be a global snacks business that included all of KFT’s business units in Europe and developing markets, in addition to the United States snack business. This new company would be called Mondelez International (MDLZ) and the Board hoped it would be a high-growth global snacks business. The remaining business units would become Kraft Foods Group (KRFT) and would be a high-margin, slow growth, North American grocery business. The following report begins with assessing the processed food industry as a whole through a PESTEL and Porter’s Five Forces analysis. Second, a SWOT and financial analysis are used to evaluate MDLZ and KRFT. Lastly, final recommendations are made for each of the new companies. II. Industry Analysis The processed foods industry incorporates...
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...competitor. This could produce synergy through economies of scale and efficiency gains, and can decrease the threat from competitors. Both of these should help to increase shareholder wealth. There is, in theory, relatively little risk as the company is staying on its home territory which it knows well, but see the information about the Morrison’s – Safeway merger on page 6. 2 Market development and product development. Takeovers and mergers can give rapid access to new markets and to new product lines. There is some greater risk present because new areas are being explored and there is asymmetry of information insofar as the sellers of companies in these new areas usually know more than the buyers. However, it can be appreciated that these categories of takeover can allow a company to expand globally and to present more comprehensive product ranges, thereby allowing the possibility of increases in shareholder wealth. One of the main drivers behind the recent bid for Cadbury by Kraft was the access Cadbury has to many overseas markets, such as the rapidly developing economies of countries like India, Brazil and Mexico where Kraft had poor penetration. 3 Diversification. Both products and markets change and inevitably there is a greater risk that things will go wrong. Diversification has to be divided into two categories: ¤ Related diversification, including vertical integration (backward and forward), and horizontal diversification. Here, there is some connection between the activities...
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...KRAFT FOODS COMPANY INTERNAL ANALYSIS The starting of strategic management process is internal analysis where managers of the firm identify business strengths and weaknesses by analyzing its core competencies. For business to build competitive advantage and take advantage of profitability, it must be able to exploit and build upon its strengths and eliminate its weaknesses. Competencies for business are its resources and capabilities that allow the business to differentiate itself and its products and services, or reduce costs when compared to competitors (“The competitive advantage”, n.d). Assets can be tangible like equipment, land or technology, or intangible like brand, knowledge and expertise. When assets are utilized appropriately, they add value to output produced by the business. Similarly capabilities of the business, like skills, processes and structures are important to creating competitive advantage. Along with internal analysis managers must conduct SWOT analysis. SWOT stands for strengths, weaknesses, opportunities and threats. Strengths and weaknesses make up business’s internal analysis and opportunities and threats come from external environment of the firm and hence form external analysis. RESOURCES BASED VIEW FOR KRAFT FOODS Kraft Foods is one of the largest Food and Beverage Company in North America with presence in more than 155 countries. Kraft has a deep portfolio of consumer’s favorite food, beverage, cheese, refrigerated meals and grocery brands...
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...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 an organisation’s direction, structure, and capabilities to serve the ever changing needs of the external and internal customers” (Moran and Brightman 2001). Importance of Change Management Two Mckinsey consultants, Tom Peters and Robert Waterman (cited by Firoozmand 2013) interviewed 43 organisations in 1977 to understand what made them excellent. By 1987, only...
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...where the products and brands are categorized into elements that are used by the companies for promoting their products and services. Brand and product hierarchy is used by the companies for the purpose of increasing the branding and product relationships with their customers. Depending on the availability of brand elements, the companies categorize their products for representing their brands in the market. Within this study, five different industry sectors with each example company will be taken into consideration where researcher has conducted a hierarchical analysis for those company brands and products. On the other hand, the study even explores the information about the classes, categories, forms and brands of every company. A critical competitor analysis for those company brands will be carried out and finally the study draws a conclusion about their core competencies Hierarchical Analysis SECTOR1: CONSUMER DISCRETIONARY- RETAIL SECTOR- WALMART For the consumer discretionary industry the retail sector has been selected where again the world’s popular retailer company called Wal-Mart was selected as Example Company. According to the report of Wal-Mart (2011), Wal-mart is one of the world’s famous retailer companies which is based in USA that offers wider range of consumer products and goods to the customers across the world. Wal-Mart has different products range which has substitute product offerings like grocery products, consumer goods, electronics...
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...Report (Date of earliest event reported): June 23, 2015 LOGO Kraft Foods Group, Inc. (Exact name of registrant as specified in its charter) Virginia 1-35491 36-3083135 (State or other jurisdiction of incorporation) (Commission File Number) (IRS Employer Identification No.) Three Lakes Drive, Northfield, IL 60093-2753 (Address of principal executive offices, including zip code) (847) 646-2000 Registrant’s telephone number, including area code Not Applicable (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: x Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230-425) ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers. (e) As disclosed in the definitive proxy statement on Schedule 14A filed with the Securities and Exchange Commission (the “SEC”) by Kraft Foods Group, Inc. (“Kraft”) on June 2, 2015 (the “Definitive Proxy Statement”) relating to the...
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...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...
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...I. Case Title: PepsiCo 2005 Case Analysis Our Mission “Our mission is to be the world's premier consumer products company focused on convenient foods and beverages. We seek to produce financial rewards to investors as we provide opportunities for growth and enrichment to our employees, our business partners and the communities in which we operate. And in everything we do, we strive for honesty, fairness and integrity.’ Our Vision "PepsiCo's responsibility is to continually improve all aspects of the world in which we operate – environment, social, economic – creating a better tomorrow than today." “Our vision is put into action through programs and a focus on environmental stewardship, activities to benefit society, and a commitment to build shareholder value by making PepsiCo a truly sustainable company.” Performance with Purpose “At PepsiCo, we're committed to achieving business and financial success while leaving a positive imprint on society – delivering what we call Performance with Purpose. “ “Our approach to superior financial performance is straightforward – drive shareholder value. By addressing social and environmental issues, we also deliver on our purpose agenda, which consists of human, environmental, and talent sustainability.” PepsiCo: Products * Pepsi-Cola * Pepsi, Mountain Dew, Mug Root Beer, Sierra Mist, Slice, Aquafina, SOBE, Lipton… * Gatorade * Gatorade Thirst Quencher, Propel Fitness Water, Tiger Woods...
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...MERGERS & ACQUISITIONS WITH RESPECT TO ORGANIZATIONAL CULTURE INTRODUCTION 1. Mergers and acquisitions have often come in waves of activity that were motivated by different factors. Further 1890 to 1905, more than 200 mergers of major importance occurred as many small companies in the same industries merged to form monopolistic entities. After 1905, merger activity was particularly heavy during the 1920s as small companies in similar industries continued to merge to gain market power. According sources, the capacity of merger activity was also heavy after World War II as large companies completed friendly acquisitions of small privately held companies. Another large wave of mergers occurred in the 1960s and 1970s, motivated largely by the quest for risk reduction through diversification. 2. Investopedia explains “Mergers and Acquisitions – M & A” as general term used to refer to the consolidation of companies. A merger is a combination of two companies to form a new company, while an acquisition is the purchase of one company by another in which no new company is formed (investopedia.com, 2013). 3. M & A and corporate restructuring are a vital part of the corporate financial world. According to Ben McClure everyday Wall Street investment bankers arrange M & A transactions, which bring separate companies together to transform into large ones. 4. Furthermore describing on Mergers and Acquisitions, two terms separately. Mergers: two similar-sized firms are combined –...
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