Case study on Monddelez International Company

In this modernization era, where globalization plays a significant role as it introduced new technologies that empower the business sectors around the world. Globalization not improve the technology but also develop effective strategies that systematized the process of organizations respectively. However, the role of strategic management is efficient that enhance the performance and economy of the business sector because it emphasized on the planning and implementation of changes according to need and demand of time and consumers. It is necessary for organizations to develop effective strategies that enhance performance and development as implemented within the organizations (Schofield & Neil, 2017).

Therefore, due to fast globalization, the competition between businesses enhanced with the passage of time is increased which is based on the product and cost of the product. But in the current scenario, the competition is developed between organizations on the basis of strategies that are followed which enhanced the efficiency and good reputation among competitors. The implementation of strategies is important and if the strategies are not adopted and updated according to the requirement of time then organization suffered a lot. Moreover, Mondelez company generated revenue from 2007 to 2015 is increased and also decreasing every year 2.77%.

Mondelez is an international leading brand of snacks that is located in America and provides its services more than 160 countries such as Cadbury, biscuits, and chocolates. Although the company generated large revenue, effective cost structure by adopting different strategies like Blue Ocean strategy and strategic management that enhanced the performance of Mondelez international company. therefore, the company also has some strategic issue that reduced the efficiency of Mondelez company.

What is Mondelez International’s corporate strategy? How has its corporate strategy evolved since its independence in 2007?

The Modelez has been selling its product which is delicious snack food in 160 countries of the world. In 2007 top management of the company addressed the poor performance of the company and claimed that the company is not growing as it has to grow. The top management started to plan on the growth of the organization and instead of just entering into the globalized market, they have developed plans for the organizational internationalization. Subsequently, in 2012, the corporate restructuring occurred focusing on to the global expansion of the snack business. Before embracing the expansion, company has gone through deep research on the target market to estimate the demands of their international consumers. But there are some strategic issues which the company faced such as the company mainly focused on European region and ignored other key regions that put limit on their global expansion. Following this, most part of the revenue was used to expand target market which created threatening condition for the company. The strategic management is a systematic process that considers all internal and external factors but in Mondelez international company this strategy was not implemented with its core and the company is unable to monitor external factors which disturb the economy and sales of the company (Weaver Jr, 2014).

Subsequently, the company feel that the internationalization with a single products seems not so profitable therefore, they decided to in expand their product line. With the implementation of the idea named brand expansion the stock price of the business share also increased and their brand named Kraft food have become the second largest in the North African region. Moreover, the company also effected from competitors and entry of other company that provided snacks and similar services. This issue is also raised due to lack of effective strategy as Mondelez company not adopted diversified products according to the demand of consumers. Furthermore, due to globalization the used of innovative technologies that provide the competitive advantage of an organization. But the company do not adopt unique technologies which are necessary for the development of the company. All these issues are raised due to the issues in the implementation of strategies and also do not update the strategies according to the need and demand of consumers (Laven & Pyburn, 2015).

What is your assessment of the long-term attractiveness of the industries represented in Mondelez International’s business portfolio?

The Mondelez Company also suffered from a crisis created due to lack of proper management and implementation of strategies. This crisis management also problematic because it affects the performance of Mondelez company due to poor strategic management. Moreover, the company also suffered from its competitors like Kraft Group and Unilever as they provided their services with effective strategies that build up the trust and confidence of the organization. The strategic issues causing a problem for Mondelez international company and enhancing the chance of competitors to compete the company due to ineffective implementation of a strategy that not covered all internal and external factors which has a great influence on the performance and economy of Mondelez company (Palmer & Zanno, 2015).

Strategic issues also have a drastic impact on the reputation, sales of a product, performance, productivity and economic growth of Mondelez International Company. However, the top management of the organization timely recognized the long term attractiveness in the market and accordingly they have integrated their business to take a long term advantage from it. Subsequently,  in the assessment of the long-term attractiveness of the company, it is found that there are 12 brands have been functioning under the brand name Mondelez with annual revenue has crossed the figure $1 billion from each of the 12 brands and at the same time, there are 80 brands 2ith $100 million annual revenue (Lock & Seele, 2016).

What is your assessment of the competitive strength of Mondelez International’s different business units?

Due to the increasing rate of globalization, business sectors also improved with the passage of time. In addition to, awareness about the different aspects also increased as social media develop a sense of awareness and people become health conscious due to unfair services of food industries. Although, Mondelez International Company provided its loyal services in terms of healthy and quality snacks that are produced under international standards. However, this conscious attitude of consumers has a great impact on the development, performance and economic growth of the company (Giovannucci, 2014).

Moreover, this health-conscious attitude of people created an opportunity for competitors of Mondelez International Company and they achieved great benefits as producing products that are environmentally friendly as well as not create the harmful for consumer’s health respectively. Therefore, the competitors of Mondelez International Company achieved a good rank in the business market. Due to poor strategic management and not adopted changes in strategies according to the modernization then the company will lose its significant position in the business world.

Due to poor management of crisis the Mondelez Company suffered a lot because the performance, sales, and economic growth are disturbed and disturb the position of the company in this competitive business world. The use of advanced technology which enhances the operational activities of the company is not updated on time due to strategic issues which are raised and has a negative impact on the reputation of Mondelez Company (Lock & Seele, 2016).

Although, the company economy based on Europe and not other markets which are a negative impact on the economic growth of the company due to fluctuation in currency. The profit of the company is low as compared to shares which reduced the reputation of Mondelez company among its competitors and business world. The input cost is high in Mondelez International Company which is reducing the profit margin and financial status of the company is destroyed that also reduced the sales as consumers trust also decreased.

The Mondelez International Company also established its reputation but due to poor strategic management and lack of updated strategies according to time and requirement of consumers, the company will reduce its good reputation, performance and economic growth of Mondelez International Company. In this competitive business world, the company is not considering the more advanced technology according to the demand of consumers which reduced the economy of the company as well as the company lost its good position in the business world.

What is your assessment of the competitive strength of Mondelez International’s different business units?

Porter Five Forces Analysis

To estimate the competitive strength of the Modelez the potters five forces are aimed to discussed as follow;

Competition in the market:

Harshey, Pepsico and Unilever are the companies which are major competitors of the Mondelez. These competitors are rapidly adopting themselves to the recent trends of technology and environmental factors. Formerly discussed companies are initiating different social services and attracting customers’ attention. To cop up with the competitor's Models has to adapt itself to the recent trends.

New Entrants:

The snack food industry is so vast and it attracts different people to invest in. New industries may be a threat to existing industries as they tend to beat existing companies and be ahead. Mondelez is facing this threat of new entrants every day.

Substitutes:

When new companies enter into the market threat of substitutes arises. Many companies are debuting in the snack food industry and offering the products similar to the Mondelez at quite reasonable rates so substitutes from other companies are a major threat to the Mondelez.

Power of suppliers:

A supplier can be a threat or opportunity to a company. Packaging, ingredients’ quality, package designing and many other things of Mondelez reflect that Mondelez is in the hands of reliable suppliers. If suppliers prefer bargaining than the company would have to suffer from potential loses to provide products at a nominal rate.

Costumers’ demands and bargaining:

Customers usually prefer bargaining and low price products with high-quality ingredients. Recently a rise in prices of Mondelez products have been seen which is a threat that customers may attract to other substitutes.

From the above analysis, it is found that competitive strength of Mondelez international is that that company has wide product line as well the company has succeeded in developing a demanding taste in market competitive price. Likewise, the strategic acquisition and merger techniques have worked superbly well that enabled the company to successful enter into the international market.

What does a 9-cell industry attractiveness/business strength matrix displaying Mondelez International’s business units look like?

From the in-depth analyses of Mondelez it is found that the company has been enjoying strong business position in the market as compare to its competitors. The international expansion strategy worked as per the plan and likewise the addition in the product line has helped to produce positive results that enabled the company to gain strong market position. The company is now successful running its business in 160 countries of the world as well its brands are earning huge revenue in the market it is mentioned above. Moreover, after a successful implementation of international corporate strategy, the company’s holds long terms attractiveness in the industry that makes the Mondalez to appear in the 9-cell industry matrix on its upper left section. Subsequently, by addressing the current position of Mondelez in the 9-cell industry matrix, the company can be recommended as a best option for the investors to take advantage from the increasing market position of the market.

Does Mondelez International’s portfolio exhibit good strategic fit? What value-chain match-ups do you see? What opportunities for skills transfer, cost sharing, or brand sharing do you see?

From the analysis of the competitive advantage of the company it is found that the company has expanded into the global market with a strategy of acquisition and increasing its product line as it added biscuits, candy, gum, chocolate and some beverages. Moreover, the company has given great importance to the health consciousness and come up with the idea of gluten free and allergen free products. Following this, it is also found that the company strategic fit worked superbly well because the Mondelez  have helped its franchises to earn huge revenue as 12 brands reached to annual revenue exceeding $ 1billion whereas there are other 80+ stores that are giving an average annual revenue to $100 billin

What is your overall evaluation of Mondelez International’s corporate strategy and restructuring since 2012? What evidence and/or reasons support a conclusion that Mondelez International’s shareholders have benefitted from the spinoff of the company’s North American grocery business?

The Mondelez International Company although provided its services around the globe but major focus on the Europe company that is causing a problem and disturb the position of the company in the business market. However, the evaluation of Mondelez company in the industry is based on their strategies which are implemented and their efficiency rate with respect to the economy of the company. therefore, the company also has a significant position among the business market as adopting strategies. But the lack of efficient and latest strategies under globalization reduced the efficiency of performance and economic growth. Because of strategic issues which the company has not accessed and monitor the activities within and outside of the company.

Due to globalization and modernization, the eating pattern of people is changed due to busiest life and they have not enough time to cook healthier food at home. In this regard, the Mondelez International Company provided its services according to the demand of consumers. But due to lack of effective strategies that are updated according to demand and time as well as requirements of the consumer. This lack of update the strategies of Mondelez company as not introduced new products which reduced the performance and number of customers of the company. This strategic issue created opportunities for competitors to came into the business market and achieved a good position in the market (Logan & Katey., 2017). From the overall evaluation of the case, it is found that the stakeholders received great benefit from by investing in Modelez especially after 2012 because the corporate restructuring helped the company to raise its business in global setting and more importantly, the diversification of the product line and focus on the industry chaging trends that enabled it to earn huge revenue through.

What actions do you recommend that Mondelez International management take to improve the company’s performance and boost shareholder value?

·    People are health conscious and they prefer healthy and organic ingredients. Mondelez should not only collect the organic ingredients but showcase its efforts to collect these ingredients.

The main focus of Mondelez is the European market. It should expand its market to other countries also because customers are everywhere

According to recent news, Harshey has refused to be an alliance of Mondelez. Company should put more efforts to bring Harshey’s on the table.

·   Functional Chewing gums are being introduced in the market so the company should take initiative and introduce some smoking aid chewing gums and others etc.

·    Packaging of a product is the main attractant but it may cost enough and keep the company from providing a low-cost product. The company should promote small packaging.

·    The company should promote its products on all media sources like television, internet newspaper and attract customers through innovative commercials.

·        The company should introduce new products based on customer choice and having new and different taste.

·         It should produce customer-preferred products like sugar free products by using a sweetness inhibitor.

 Conclusion on Monddelez International Company

Mondelez is a well-known product which is very popular among customers due to its tasty products and beautiful packaging. Like many other companies this company also faces different threats and enjoys different opportunities. Mondelez is doing good but due to a vast market and new entrants, it should not only focus on the quality but also the price of products because many other companies are there to bring substitutes and engulf the profit of Mondelez. It has not updated its strategies with the passage of time. The portfolio and strategies of the company should have been updated and analyzed (Rihani, 2018). The company should always prepare to tackle the new entrants with having a hidden idea or trick beforehand. Packaging should be made smaller so that the cost for the customer should be attracted.

References of Monddelez International Company

Giovannucci, D. O. (2014). Corporate social responsibility and the role of voluntary sustainability standards. Voluntary Standard Systems.

Springer, Berlin, Heidelberg, 359-384.

Laven, A., & Pyburn, R. (2015). Facilitating gender inclusive agri-business. Knowledge Management for Development Journal , 10-30.

Lock, I., & Seele, P. (2016). Deliberative lobbying? Toward a noncontradiction of corporate political activities and corporate social responsibility.

Journal of Management Inquiry , 415-430.

Logan, & Katey. (2017). An introduction to business archives." The International Business Archives Handbook. Routledge.

Palmer, M. G. (1991). Sweetness inhibitor. U.S. Patent No. 4,992,279.

Rihani, M. (2018). Strategic Analysis the Case of Mondelez International." .

Schofield, & Neil. (2017). Corporate Actions." Equity Derivatives. . London: Palgrave Macmillan.

Weaver Jr, A. (1994). Packaging for food products. U.S. Patent 5,277,920.