Essay About Market Of The Brand And Chinese Market

How Far Along Is Mondelez in Its Corporate Transformation?
Essay Preview: How Far Along Is Mondelez in Its Corporate Transformation?
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Q3. How far along is Mondelez in its corporate transformation?Irene Rosenfeld had a clear vision back in 2007, that the company needed to maintain long-term global growth, and to identify the good and the bad in its portfolio. Since the split from Krafts Foods in October 2012, the company focused on five categories: biscuits, chocolate, gum and candy, beverages, and cheese and grocery making up their snack portfolio. In order for Irene’s vision of Mondelez becoming a global name in the snacking industry, she needed to restructure the firm and its portfolio to reflect the overall strategy to gain competitive advantage that could see the revenue growth the company was expecting. However, like any transformation there will be challenges and this became increasingly more difficult the more global the company became. The macro environments really shaped how the company continued operating, but there was also a lack of understanding of these regions and its customers’ demands. An example of where the company went wrong was when they first introduced the Oreo cookie to the Chinese market. The company decided to take their popular American cookie product to the Chinese consumer and this quickly failed as the Chinese consumer had different needs in the types of products they purchase. Irene quickly understood that decisions were best placed regionally so that management in those economies could make decisions in the best interest of its consumers but also for the company on a global scale. Later, the company launched the “Cookie Jar Programme” which enabled the company to have a better insight into the route to market of the brand and to take advantage of the impulse nature by innovating the packaging and adjusting the size of the product that could sell in the “hot zones” of a store. This failed attempt of route to market made Irene quickly identify that I was not the snack categories that were preventing the growth of the company, it was their participation in those categories that were hindering the growth of the company and this led Irene and team to seek growth opportunities that could further accelerate the company on the global scale it is looking for. Focus on portfolio Reduce costs (Drive down O/H via ZBB and move power brands to advantage assets)Invest for growth (Power brands, innovation platforms and sales capabilities)Reduce supply chain and O/H costs Invest in routes to market Discontinue low margin specific product lines Streamlining (adopt region based, category led model)Shared services (simplify and standardise processes and focus on scalable, transactional processes in finance, HR, Receivables and payables)What remains to be done?50% of their revenue by 2020 will come from well-being lifestyle products Excess capacity to introduce more products and innovation Focus on expanding their footprint in convenience stores, traditional mom-and-pop stores, kiosks, and stores in emerging markets Much more potential in emerging markets, despite lag in 2017 A more holistic view of consumer snacking behaviours to sharpen brand positioning in clear demand spaces;Transformation of marketing and digital capabilities to increase ROI;Balanced investments in both global and local heritage brands to achieve higher growth;The creation of a more agile organization with accelerated innovation capabilities;Brand extension into new markets and snacking adjacencies;Increased investments in channels such as eCommerce;Accelerating exposure in higher-growth geographies; andLeveraging partnerships and M&A to expand into new markets and snacking adjacencies.Is the strategy consistent with the changing structure of the CPG industry? 5 forces The industry:2016, $600bn in global sales of packaged goods Focus on creating brand value for the end consumer with product innovations and positioning built on insights into trends in customer behaviour and perceptions Delivering value to the channel of distribution – Supermarkets, grocery chains, and wholesale clubs, set of smaller outlets varying from convenience stores in developing countries, and similar tiny storefronts in emerging marketsAdvantageous to position snack products, like confectionery, close to the checkout location – known as the hot zone in large stores – where consumers made impulse purchases. Centre-of-the-plate and centre-of-the-store foods were impacted as on the go lifestyles and increasing demand for healthy or natural foods shifted consumers eating behaviours toward quick or ready to eat meals and snacksIncreasing competition from warehouse clubs, convenience and drug stores, and online orderingNiche chains, including limited-assorted and small-format grocery stores such as Trader Joe’s and Aldi, and natural food retailers such as whole foods, challenged their dominance Growing price sensitivity increased the draw of private labels in chains like Walmart and Aldi and of bulk shopping in warehouse clubs A rice in consumer desire to buy groceries online – prompted additional investments from retailers, including exploring innovative in store experiences and developing multichannel approaches, such as click and collect Millennials – increasingly sought healthier options, gravitating towards fresh, healthy, convenient food in sustainable packaging, rewarding companies with transparent labels, fresh ingredients in packaged foods, and a commitment to sustainability.  CPG industry responded to consumer trends by consolidating via M&APlayers focused on power brands that had dominated shares in their category – supporting them with heavier advertising and promotion and investing in product line extensions, while culling smaller or weaker brands from their portfolio Driving operational efficiencies to improve margins; several introduced ZBB – manage and improve their top line by deepening their understanding of consumer appetites and shopping habits, uncovering pockets of profitability in small brands and realigning their brand portfolios for growth Emerging markets had been driving packaged food industry growth – Asia-Pacific region became the global leader in snack consumption To meet demand, packaged food companies increased their presence in these markets. From 2006-15, Nestle, PepsiCo and Danone Group grew their sales in emerging markets by more than 20%Consumers expressed a preference for imported goodsPressured packaged food companies to deftly adapt to the varied local distribution and retail models – found success in altering recipes to cater to local tastes and by packaging snacks in smaller quantities to appeal to consumers with less disposal income Q4. As you reflect on Rosenfeld’s decade long transformation, what do we learn about how to execute a corporate strategy? Can it be planned in advance?