Running head: CASE STUDY 1

Diversification Strategies of Mondelez International

Student’s Name

Institutional Affiliation
DIVERSIFICATION STRATEGIES OF MONDELEZ INTERNATIONAL

2
Diversification Strategies of Mondelez International

Mondelez International's key long-term aim is to increase the firm's net profits. As a

result, the firm intends to strengthen its portfolio and reduce its expenses, which will contribute

to long-term growth. Furthermore, the firm is more concerned with net income growth than with

growth pace. Management feels that using this strategy will make it easier for the company to

develop its operational income, maintain a consistent cash flow, and achieve double-digit rates of

growth.

Diversification

Furthermore, the fundamental goal of the firm is to analyses its strategic plan. Mondelez

intends to increase profit ratios by employing cost cutting strategies in its manufacturing and

supplying network activities. As a result, the firm generates high-growth worldwide snacks as

well as margins in the North American supermarket industry. The company employs a re-

branding approach to assist it develop and enter the global market. The reformation strategy was

effective because it enabled the firm to gain a competitive advantage over competing businesses

inside the food market. According to the report, Mondelez International U.S turnover climbed by

eighteen to twenty-four percentage in the periods 2014, to 2016.

Nonetheless, the company's operational revenue fell from $8.8 billion to $2.6 billion

between 2015 and 2016, causing the business to lose funds in the financial markets. As a result,

as per to the complaint, stockholders profited from the flip when individuals were granted a share

in exchange for any 3 Retail Food Inc. share. In addition, the firm opted to offer new goods and

services to its customers. Finally, the Kraft Foods Corporation renamed itself Mondelez

International, Inc. and changed its trademark from The KFT to MDLZ.
DIVERSIFICATION STRATEGIES OF MONDELEZ INTERNATIONAL

3
Firm’s Performance in 2017

Mondelez International's plan was to capitalize on its formidable snack food brands in the

165 countries where its products were distributed. Oreo, Milka, and other popular brands were

successful in virtually all areas where the business traded and supplied a range of goods that

catered to practically all customer snacking preferences. The company’s goods selection, for

example, comprised biscuits or pastries, chocolates, sweets, gums, and drinks. The purchases

were made with the goal of growing the firm's brand base into fast increasing snacks categories.

The industry's 2015 purchase of Enjoy Live Foods expanded its snacks offerings to include

ingredient and diet crisps, nut-free chocolates, and seeds and fruit items.

The firm plan was to boost profits by introducing cost cutting strategies in its

manufacturing and supply chain activities. The corporation, on the other hand, was dedicated to

delivering the extra resources required to enhance sales and marketing skills in critical countries,

particularly in emerging economies. In 2015, the firm published its Sustainability 2020 targets

for lowering carbon emissions, eliminating deforestation inside its agriculture supply chains,

concentrating on water conservation activities, and lowering packaging and production waste.

Restraint in eating was also emphasized as an important component of the company’s ethical

responsibility and sustainable plan.

Financial Situation of the Firm

After the 2012 turnaround, the company was capable of managing its growth strategy for both

domestic and international markets. Purchases have demonstrated to increase the firm's

attractiveness and the value of its proprietors. The firm's diversification strategy led in natural

rates of profit of 1.3 percent in 2016 and 1.4 percent in 2015. The firm was profitable prior to

turning organic through corporate reform, but it failed to enhance stakeholder earnings. Due to
DIVERSIFICATION STRATEGIES OF MONDELEZ INTERNATIONAL

4
the approach, business stocks stayed stable between 2007 and 2022. As seen in the table below,

reformation in both the local and worldwide markets has resulted in a steady increase in earnings

per share.

Years 2016 2015 2014 2013 2012

Earning/share 1.07 4.49 1.29 1.30 0.90

The profits per share indicated above show that Mondelz's natural expansion plans have

the potential to engage in the corporation’s growing category. If the leadership spends more in

methods such as increased advertising, involvement with various stakeholders, and the use of

technology in both manufacture and sales, Mondelz is expected to maintain a tiny dividends

distribution to investors.

Conclusion

I would advise company to keep pursuing sustainable growth because it has proven to

have the capacity to accelerate market growth. To boost natural growth, management must seek

partnership with industry participants. Whereas the purchase of a strategic enterprise may not

directly convert to profits, it may create benefits such as a cost-effective supply network that

reduces expenses and operation costs for other business divisions. To begin, numerous

companies may agree to purchase in large quantity from specified suppliers in order to increase

their bargains from suppliers. Acquiring in bulk would boost their competitiveness in obtaining

lower prices for their raw resources, and as a result, their productivity is likely to grow. With
DIVERSIFICATION STRATEGIES OF MONDELEZ INTERNATIONAL

5
several brands employing a comparable operation, they may be able to pool their resources to

create revolutionary processing technologies that reduces manufacturing costs. Furthermore,

Businesses may successfully benefit’s from Mondelez's well-known trademark by confirming

that their goods are connected with the respected company title. Finally, managers must redesign

their product line to fulfil the needs of multiple markets while also keeping up with changing

market expectations.
DIVERSIFICATION STRATEGIES OF MONDELEZ INTERNATIONAL

6
References

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

E. (2020, May 15). Mondelēz International’s Diversification Strategy In 2017:. Essayhusk Blog.

https://essayhusk.com/blog/mondelez-internationals-diversification-strategy-in-2017/.