- April 15, 2014
- Posted by: essay
- Category: Term paper writing
2. Overall SWOT
Using the results of value chain analysis and resource-based view for internal analysis of Mondelez International Inc. and the results of external analysis outlined in the previous SLP report, it is possible to bring together these data into SWOT matrix (Table 1).
Strengths |
Weaknesses |
| 1)Â Â Â broad network of suppliers and distributors2)Â Â Â geographic diversity
3)Â Â Â broad range of products 4)Â Â Â focus on particular market niche (predominantly confectionery, gum and snacks) 5)Â Â Â strong goodwill 6)Â Â Â strong brand loyalty and brand awareness 7)Â Â Â strong R&D capacity 8)Â Â Â economies of scale 9)Â Â Â innovative selling technologies 10) environmentally effective technologies
|
1)Â Â Â Â Â integration and empowerment of acquisitions2)Â Â Â portfolio too large and complex
3)Â Â Â challenges at local markets 4)Â Â Â gum production integration issues 5)Â Â Â management missteps in emerging markets 6)Â Â Â rising costs of post retirement benefits 7)Â Â Â lack of synergy between different directions of production
|
| Opportunities | Threats |
| 1)Â Â Â expansion into emerging markets and niche differentiation in these markets;2)Â Â Â the focus on international market after the spin-off can help overcome the main international competitor – Nestle S.A.;
3)Â Â Â preferences towards healthy and nutritional food products can be used to further differentiate and increase sales; 4)Â Â Â purchase of smaller companies in the growing economies can stimulate international expansion; 5)Â Â Â use of mobile and social marketing to increase customer loyalty.
|
1)Â Â Â Â Â intensive competition and similar product offerings by the competitors;2)Â Â Â Â Â tightening international regulations might hinder growth and increase costs of expansion;
3)Â Â Â Â Â supplier prices over the world are likely to increase; 4)Â Â Â Â Â rising demand for organic food might affect the sales of other foods, especially confectionery; 5)Â Â Â Â Â litigation cases related to obesity and food supplements might affect brand name and incur high costs.
|
Table 1. SWOT analysis of Mondelez International Inc.
3. Evaluation of SWOT
In general, Mondelez International Inc. has more strengths than weaknesses ”“ 10 strengths and 7 weaknesses were identified. The major strengths and weaknesses of Mondelez International Inc. are focused on the primary activities (8 strengths and 5 weaknesses), while only 2 strengths and 2 weaknesses related to support activities have been identified. This is quite expectable because the acquisition of Cadbury and further spin-off of Kraft Foods into Kraft Foods Group and Mondelez International Inc. has significantly improved the company’s market position and created multiple perspectives for growth.
The number of threats and opportunities is the same, which shows that the external environment performs rather balanced impact on the company’s operations and perspectives. Since the company has more strengths than weaknesses, it is reasonable to recommend focusing on strengths-opportunities and strengths-threats strategies for Mondelez International Inc. More detailed recommendations on strategies will be provided in the next section.
4. Strategic recommendations
For the results of SWOT analysis, it is reasonable to apply TOWS approach for determining primary directions of strategies for Mondelez International Inc. and generating strategic recommendations for the company. Overall, it is possible to identify four types of strategies associated with four SWOT quadrants: S-O strategies, aimed at using organization strengths for taking advantage of existing opportunities, S-T strategies, which are focused on using company strengths to avoid threats, W-O strategies, centered around taking advantage of opportunities via addressing weaknesses, and defensive W-T strategies, which imply minimization of weaknesses in order to avoid threats (Botten, 2009).
The number of strengths of Mondelez International is greater than the number of weaknesses, and most strengths relate to primary activities of the company. This means that it is reasonable to focus on strategies relying on strengths (S-O and S-T types of strategies).
S-O strategies recommended for Mondelez International Inc.
1)Â Â Â use of goodwill, high brand awareness and loyalty and supplier network to expand into emerging markets;
2)Â Â Â use of innovative technologies (leading to economies of scale and sustainable production) for increasing market share and over-performing Nestle at the confectionery and snack market;
3)Â Â Â use of R&D power for introducing new products in the healthy/nutritional food segment;
4)Â Â Â more personal and intensive management of customer relationships empowered by innovative technologies and IT innovations;
5)Â Â Â increasing market presence with the help of collaboration or acquisitions of smaller local companies operating in the similar market segments.
It is also possible to determine several S-T strategies aimed at overcoming threats for Mondelez International with the help of existing organizational strengths:
1)Â Â Â development of original R&D products for the health and nutrition sphere in order to weaken competition and to avoid the threat of substitution (this strategy can be combined with strategy 3 in the S-O group);
2)Â Â Â use of innovative technologies and supplier network in order to increase economies of scale and to minimize costs, therefore decreasing the threat of increasing expansion costs;
3)Â Â Â adjust brand image to the increasing trend towards healthy and organic food;
4)Â Â Â improve product sustainability and compliance with international regulations, and therefore decrease the risk of lower demand for the production of Mondelez International conditioned by the demand for organic foods (maybe even develop own code of compliance, since international regulations might significantly differ from country and country); this strategy will also allow to decrease litigation cases
One strategy from the W-O group is also worth attention. For Mondelez International, it is also important to focus on integration of acquisitions and on simplification of the company’s product portfolio which is currently to large for creating synergies between different product lines. In fact, Mondelez International has already included such goal into its strategic objectives (iStockAnalyst, 2012).
Conclusion
Analysis of strengths and weaknesses of Mondelez International Inc. showed the company has more strengths than weaknesses, and the primary strengths of the organization belong to primary activities. The latter fact is an indicator of significant growth potential. The acquisition of Cadbury broadened the perspectives of the company, and due to the spin-off the company has become more focused. Strengths-related groups of strategies were therefore selected for generating strategic recommendations for Mondelez International Inc. Five strategies of the S-O segment were identified, 4 strategies of the S-T segment, and one strategy belonging to the W-O segment was included into recommendations for Mondelez International Inc.