Reference no: EM132342871
Case Study: Mondelez International a Global Leader in Snack Foods Markets
In 2012, Kraft Foods split into two separate companies - North American grocery and international snack foods (named Mondelez and targeted at fast-growing international markets). The North American business sells established, profitable brands. Mondelez is built around ‘power' brands (Oreo, Cadbury, Ritz) and local brands tailored to local markets. The separation into two businesses allows each to use its own strategy that best suits its products and conditions in its markets. Mondelez is reinvesting profits into emerging markets seeking additional growth. Despite revenue growth for Mondelez, net income has declined due to increasing coffee prices, reduction in demand for some products, and overall market volatility.
As is the case with many US-based firms, when markets mature they often become saturated, forcing growth to come from other places. In these instances international expansion into new and emerging markets becomes central to business success. Kraft Foods created Mondelez specifically to pursue international opportunities. Identify and discuss how Mondelez allows for better positioning of snack foods in international (emerging) markets.
Hitt, M.A., Ireland, R.D., &Hoskisson, R.E. (2015). Strategic management: Competitiveness & globalization (11th ed). Stamford, CT: Cengage.
1. What other examples canyou think of that follow the same response as Kraft?
A global strategy is one where standardized products are offered across country markets and competitive strategy is dictated by the home office. The global strategy:
• Assumes strategic business units operating in each country are interdependent
• Attempts to achieve integration across business and national markets, as directed by the home office
• Emphasizes economies of scale
• Offers greater opportunities to use innovations developed at home or in one country in other markets
• Often lacks responsiveness to local market needs and preferences
• Is difficult to manage because of the need to coordinate strategies and operating decisions across borders
• Requires resource-sharing and an emphasis on coordination across national borders
Here is another example that puts this concept into play. The U.K.-based temporary energy provider, Aggreko, operates in 48 countries and employs a global strategy. The firm's fleet of equipment is integrated globally, which allows it to shift equipment to different regions of the world to meet specific needs. Its global strategy also allows Aggreko to design and assemble its equipment in-house to meet the needs of its customers.
Hitt, M.A., Ireland, R.D., &Hoskisson, R.E. (2015). Strategic management: Competitiveness & globalization (11th ed). Stamford, CT: Cengage.
2. What other examples can you think of that puts this concept into play ?