Cross Cultural Management A study on Cadbury and Kraft Merger

compensate Cultural Management A study on Cadbury and kraft unionIn the current era of globalization with the advancement in the technology, colloquy and the channels to access the external caper world the crop of trading has changed drastically. Corporate personnel and application professionals are making sound terminations and are developing efficient strategies to sustain their competitive advantage in the market. many a(prenominal) new vigilance disciplines like IT centering, corporate governance, coalitions acquisition, work continuity management and such new principles are becoming prominent. There are several(a) reasons that are pointed out by the corporate unfluctuatings which are behind these management concerns. They accommodate cost cutting measures through economies of scale, global expansion, risk reduction, in effect(p) and efficient management practices and so on.Merger Acquisition is one of the effective ways to perpetrate to gain market share an d to expand the business. They answer in global expansion, cutting costs, new know leadge and expertise acquisition, assignment of niche areas across the global market, extension of customer base, accessing new technologies and many. traffic with the integration of two similar or different companies, it also involves certain(p) difficulties and issues to handle. Although companies are pursuing MA aggressively, it is found that 60-80% of them are financial failures regarding their exploit in the stock markets or obtaining high profits (Salame, 2006). Through this study, I tried to understand the various management issues and concerns mixed in the merger acquisition process with the help of Cadbury and kraft merger.kraft paper-Cadbury MergerThe Kraft putsch of Cadbury did not happen in a simple routine manner. It touch various management issues which had proved this event likely to shape afterlife state-supported policy towards acquisitions and corporate governance.The initi al steps towards this strategic finality of getting Cadbury started in the year 2007 on 3rd October when Cadburys Somerdale pulverisation plans that inform its to shut down the factory with a loss of 500 ancestrys and to invest the production in the Bourneville Plant of Birmingham to the new plant in Poland. In the year 2009 on September 7th, Irene Rosenfeld, Chairman and chief executive officer of Kraft say that Kraft would be in a position to continue the Somerdale factorys trading operations without closing the plant and thus preserving United Kingdoms manufacturing jobs.But this statement give by the Kraft was not taken as granted by the Cadbury workforce before the takeover. The National Officer of the Unite the Union, which is a exercise body of Cadbury workforce, Jennie Formby compared Kraft statement with the line there is no fondness on the bones at all saying that there is no real intention of Kraft to come and save the jobs.Finally in the year 2010 on 19th of January, Cadbury announced the bid offer do by Kraft to its shareholders and the takeover is finally concluded on second of February, 2010. But to the shock of the domain and the stakeholders, Kraft, after a week of its stop of the takeover, announced that it would not be capable enough to maintain the Somerdale factory open and would like to approve the decision do by the Cadburys senior management to discontinue its operation. This decision do by Kraft flat after the takeover led towards unfavorable judgment. Marc Firestone, Executive President of Kraft Industries Inc. and Irene Rosenfield, CEO asserted their decision saying that before making a public statement Kraft was not aware of various factors like the sexual structure of building, products of Cadbury in that facility, status of machinery and others (Mergers, acquisitions and takeovers, 2010 )In this dramatic way, the whole process of acquisition of Cadbury by Kraft has been done making it an event that john shape the future endeavors of public towards takeovers, acquisitions and corporate governance.Inside Story of Cadbury and Kraft before TakeoverCadbury has faced many ups and downs throughout its journey peculiarly under the visionary leadership of Todd Stitzer. Todd Stitzer working successfully for 20 geezerhood for Cadbury Schweppes has played a key role as a restrain the best mind behind the acquisitions of soft drinks industries made by Cadbury in US. He was afterward appointed as the chief strategy officer by John Sunderland to the confectionary side to achieve the similar success. The then competitors in the chocolates and sweets industry were the international companies Nestle, Mars, Kraft, Wrigley, Ferrero and Hershey. Stitzer say that acquisitions alone would not solve the problems of Cadbury. He said that the revenue growth model has to be revitalized to gain in the financial achievement. Stitzer had developed many strategies, took some visionary steps and led Cadbury gai n the business world with his strategic thinking. Stitzer and his management team aimed at the global domination in the Confectionary world, while the stakeholders were much worried more or less the financial performance. Overall with all his visionary leadership abilities and strategic decision making capabilities, Cadbury Schweppes split into pure confectionary leader Cadbury. Nelson Peltz, founder of the hedge blood Trian Fund Management also had his own role in the business of Cadbury.Irene Rosenfield, CEO, Kraft Food Industries Inc. had a keen interest in the confectionary business and proposed an offer to buy Cadbury to Carr, Chairman of Cadbury after Sunderland. Carr without consulting the stakeholders had refused the offer but Peltz who becalm owned the shares in the Cadbury with discussion and negotiation with Kraft finally made Cadbury lose its independence in January 2010.Impact of the MergerCadbury-Kraft merger which involved a high dramatic and strategic process as d iscussed in a higher place has got its own pros and cons. Before analyzing the performance after a year later the takeover, there are certain agreements on which the takeover is being implemented. These include aspects like the brand name of Cadbury would be continued previous loyaltys, allowance arrangements would be honored and such, for at least two years.Regarding the business performance, the unite business has achieved profitable results despite of the difficult sparing climate outside. It had ameliorate the sales by 13% compared to 2009 and also has sold 300 one thousand million bars more comparatively. They improved and modified the corporate structure so as to combine the Cadburys successful chocolate history with the Krafts brand heritage. The unite systematic approach would create value and would help in economic and internal growth (Kraft Foods completes Cadbury takeover, 2010 ). There is high capital investment, support and commitment seen in the Cadburys RD sites so as to improve the combined business performance and the products.As we know, every coin has two sides every decision would have pros and cons. As discussed above, the withdrawal made by Irene Rosenfield regarding the Somerdale factory led to the criticism from the workforce. Similar reaction is seen even after the takeover with many employees departing from the Cadbury. Kraft is trying to improve the relationship with local authorities so as to increase the employment opportunities. Due to the change in the working culture, a feeling of fear is seen among the employees to express their views and opinions. Kraft says Cadbury being a firm of values and heritage we try to combine our efforts in bringing job satisfaction to employees and to outperform the market as well. (Update on progress made since Kraft Foods acquired Cadbury, 2011)To conclude, Kraft taking over Cadbury is not just acquiring an excellent company but establishing a strong connection with the public so it has to w ork hard to prove and show the combined benefits of Cadbury and Kraft Foods.