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Mondelez is a company with strong history in product innovation. Responding to the changing needs of the consumers and the dynamics of the external environment by changing products and processes is hard, but a company as big as Mondelez has to do it in order to stay competitive. As part of the food industry, the company’s largest innovation attempts are focused on their products.

Mondelez has traditionally used the Food Marketing Institute Show to showcase new products in all categories. In the past a lot of the categories saw improvements toward the number of calories, the inclusion of prebiotics and probiotics, addition of protein and fiber and several new products among the Planters and South Beach Living Brands.

One of the brands that deserves special attention is Milka. It encompasses several sub brands including biscuits and chocolates. Mondelez has traditionally had very rapid innovation cycle with the brand releasing several different varieties of the chocolates and biscuits depending on the time of year. Very few of those have stayed persistent over time and most were never produced again, giving the brand the outlook of exclusivity.

Strategic leadership is vital to the organization’s well-being. In order to thrive and evolve an organization has to formulate and implement strategies for its development in an effective manner. The managers can no longer be the only ones that think and good employees cannot just be mindless robots that strive only towards operational efficiency. Now the role of the effective leaders is to direct and form the organization and develop environment that can be an effective incubator for world-class employees.

Mondelez pays great attention two their customers, employees and leaders and strives to create a “delicious work experience”. By creating a culture of openness and inclusiveness the company wants to build a high-performing culture. Diversity also plays important roles in that strategy. By implementing ideas and techniques developed by their employees the company can be sure that they stay relevant in every market they do business in.

Some of the guiding rules that Mondelez imposes on itself:

• We require diversity and inclusion training for every employee at key career stages to sustain a culture that welcomes and values individual differences.
• We develop strategic relationships with external organizations to connect with a broad range of consumers and attract diverse talent to bring a wider spectrum of perspectives to our business.
• We link diversity and inclusion to executive incentive compensation to increase our leaders’ accountability.

Robert Monks and Nell Minow, two experts in the field of corporate governance, define it as “the relationship among various participants in determining the direction and performance of corporations, those participants are the shareholders, the company management and the board of directors”.

Modern corporations usually have separate management and shareholders, although there are some exceptions. Facebook’s Mark Zuckerberg, for example, holds 28.2% of the company and at the same time is the CEO. In order for corporations to be effective and grow, large number of people have to pull together their capital, experience and hard work. This all good, however, a certain problem arises between the people investing the capital and those who invest their hard work and experience. This problem is also known as “agency theory” or simply put how the shareholders and managers will work together despite the their different goals and the different attitudes toward risk.

Mondelez International tackles the problem by using a board of directors and several committees as intermediary between the shareholders and the management. According to the company good governance practices include:

• Disclosure of the board’s processes
• Independence of a majority of the directors
• Respect for shareholder rights
• Compliance with legislation and regulations

Irene Rosenfeld is Chairman and Chief Executive Officer of Mondelēz and the board consists of three standing committees: Audit, Human Resources and Compensation, and Governance, Membership and Public Affairs. The membership of each of these committees consists entirely of directors who are independent under listing standards of the NASDAQ Stock Market. The Audit Committee monitors the company’s financial reporting processes and systems of internal control. The HR and Compensation Committee oversees the company’s executive compensation, including determining the compensation of the CEO. Finally The Governance, Membership and Public Affairs Committee is responsible for identifying and vetting individuals qualified to become board members, oversees compliance with political contributions laws and regulations, reviews public affairs priorities and monitors significant developments in the regulatory environment.

As publicly traded company Mondelez International’s has to have Corporate Governance Guidelines. This is a document that explains the role of the board of directors, sets the rules for its composition, structure and policies, the procedures and the board’s compensation.

Mondelez is one of the biggest companies in the world. Managing more than 110 000 employees and offering products in 165 countries, that is coverage of 84% of the countries in the world and more than 95% of the population. You simply do not get bigger than this, unless you are Coca Cola. Managing all those people across the globe is difficult task and the type of Mondelez’s organizational structure plays key roles in solving that problem.

There are three basic types of organizational structure:

• Functional structure - the major functions of the firm such as marketing, accounting, R&D and production are grouped internally. The CEO’s job is to manage, coordinate and make possible the integration of those functional area.
• Divisional structure - a form of structure where the company is organized around different products, projects or product markets. The divisions are relatively independent and their products or services are different from one another.
• Matrix structure - it combines the functional and divisional structure. There are multiple lines of authority and each individual reports to at least 2 managers.

All of the types of organizational structure have certain advantages and disadvantages. The functional structure gives better coordination and control but makes communication between the areas more difficult. Divisional structure allows for better strategic and operational control and makes focusing on the different product groups easier but also increases costs by duplicating key functions. Finally the matrix structure allows for more flexible approach but can result in lower level of accountability and power struggles.

Mondelez has a specific approach toward organizational structure. After the spin-off from the North-American grocery business, it underwent a corporate restructuring, the goal of which was to make the company more flexible and competitive.

There are two types of operational units in the current organizational structure. The first and more notable are the five regional units. Those are European, Asia Pacific, North America, Latin America and the combined EEMEA (Eastern Europe,Middle East and Africa). The goal of the new division according to the CEO, Irene Rosenfeld, is to “fuel our growth by enhancing collaboration, expediting decision making and driving efficiencies”. The goal essentially repeats the main strengths of the divisional type of structure.

Second, as most of the big corporations, on corporate level the company also has Chief Category and Marketing, Financial, HR, Integrated Supply Chain, General Counsel, Research&Development and Quality and Strategy Vice Presidents. Those are clearly functional areas.

As a conclusion we can say that Mondelez International has a Matrix structure with focus on product markets and very strong and influential CEO.

Open your mind for the people different from you. Otherwise you will become obsolete and will be left behind.

(Source: Spotify)

Mondelez International was formed in 2012 as a separate entity from Kraft Foods Group. It comprises of the biscuits, chocolate, gum, candy, coffee and powdered beverages divisions, employs more than 100,000 people around the world and operates in 80 countries. There are very few businesses that are more international than this.

During its long history the company has gradually grown from a family wholesale door-to-door cheese business to multinational conglomerate making some of the best-known snack brands around the globe. The company has been acquiring, has merged, has been acquired and has been renamed more than a dozen times. Most of those were aimed to expand the business or roll-up the existing smaller firms.

The 2012 split was aiming to streamline the company’s portfolio of brands in order to concentrate their resources, in terms of innovation, operations and marketing, on their major brands and categories. Because of its geographic market coverage, Mondelez wants to drive strong volume growth in its identified emerging focus markets, such as Brazil, India, China and Russia, where volume growth prospects in snack food categories are about 7-8%.

One of the main challenges will be to expand the Chinese market of which Mondelez commands only 1-2%. The main player there is Mars Inc. that has about 18%, according to Euromonitor. Another part of their growth strategy is restructuring the division in a geographical manner. As I mentioned before the managerial restructuring will focus the company on the emerging markets where growth opportunity is the biggest.

The overall diversity in the brands owned by Mondelez allows them to pursue different strategies with them. For example the chocolate chip Chips Ahoy! appeal to all ages, where as Barni is healthier choice biscuit focused toward the younger consumers. We also have Belvita breakfast biscuits that are a healthier choice and are supposed to provide you with vitamins and minerals. This differentiation theme follows through all of the major categories and shows that Mondelez has covered both the cost and differentiation strategy.

Corporate level strategy

When we talk about the corporate level strategy of Mondelez we cannot miss the separation and rebranding of the company from the Kraft group. There are not many events of such significance in the corporate world. This separation shows the determination of Mondelez to focus itself on the business of snacks and beverages.

The strategic acquisition of Cadbury, a British confectionery company that is the second largest in the world after Mars, Inc, which happened in 2010 has also been fruitful with cost and revenue synergies close to 1 billion dollars each per year.

We can conclude that Mondelez creates value and profits through both related and unrelated diversification. Helping coffee farmers and cocoa farmers, restructuring the company and leveraging their core competencies - scale, scope, iconic brands and now developing innovation platforms.

This multi-diversification strategy is not surprising considering that Mondelez is one of the biggest international food companies. In order to sustain and increase their organic and non-organic growth they have to be able to tap in every possible source of innovation and sustainability.

BCG Portfolio matrix

The approach developed by the Boston Consulting Group in determining the portfolio management strategy. According to the model a company’s strategic business units are positioned in a matrix according to their profitability and market share in the respective industry.

There are four types of SBUs in this model - Starts, Question Marks, Cash Cows and Dogs. Each company tries to have Stars, as they provide the best growth rate and market share, but sometimes they forget that the next big thing can and probably will emerge from the dog group, where the cost of innovation is cheaper.

If we look at the graph below we see the SBUs of Mondelez International and their market share. The Biscuits and Chocolate categories have each grown 6 percent annually since 2009. Gum and Candy grew 5 percent, while Coffee and Powdered Beverages were up 10 percent and 7 percent, respectively. Source.

(source of the image)

All of the brands that Mondelez has, with the exception of Coffee, which is expected to grow with 10 to 12 percent, can be considered Cash Cows. The CEO of Mondelez has stated several times that those SBUs will remain the strategic focus of the company thus a sudden interest and development in other product categories is not to be expected. In the long run this focus will probably be harmful and in my opinion Mondelez should focus more on innovation of new market segments.

A Kickstarter project I can support.

I’ve been under quite a lot of stress recently. Everyone at some point of their live will be in the same situation. Whether it is too much work, tests and exams to prepare for or you have some personal issues, the negative things often pile up and make your life miserable for some time.

Several things work for me in those situations and since I like lists, here is a list of them with a short explanation:

• Work out - your body knows how to relax and physical activity takes your mind away and frees the clutter from your “mind pipes”.
• Prioritize - some things are more important than others. Choosing work over family because you want your family to be better off sounds ridiculous. Sometimes a step back is needed to know what is important.
• Quality time - have fun. It may be difficult but overworked person is several times less productive than a well rested one.
• Sleep - your brain needs a break and sleeping helps you sort things out. “The morning is wiser than the evening.”
• Focus - when you have to do something, do it.

Oreo is a sandwich biscuit made by Mondelez International’s Nabisco division. It is sold all over the world and has an unmistakable design and taste. The cookie was first created in 1912 in New York by the National Biscuit Company (today Nabisco). Oreo is one of the first names that comes to your mind when you think about biscuits. Its popularity is a combination of design, taste and tradition. With more than 100 years of history Oreo is one if the older if not the oldest biscuits made today.

According to Michael Porter there are five forces in any industry. The bargaining power of suppliers, the bargaining power of buyers, the threads of substitute product, new entrants in the industry and finally the rivalry among existing firms.

Nabisco has bargaining power over their suppliers. As one of the largest companies in the sector they can put pressure over their suppliers as large portion of the suppliers’ business is dependent on just a few large companies. The buyers on the other hand have the advantage over Mondelez. There are hundreds of other companies making the sandwich biscuits. This large selection makes the industry highly competitive which gives the buyers a choice. Oreo has to spent significant efforts and cash in marketing to offset the danger of being overrun. The competitors range from store brands that are sold cheaper to biscuits providing better health benefits and nutrition.

Additionally biscuits are product that is easily substituted by chocolate, candy, chips, popcorn and etc. The thread of new companies and local competitors is also high since the production and selling of biscuits is not a high-technological business defended by IP and hordes of lawyers. Despite that the company has several patents and trademarks over the design, the recipe and the name of the biscuit. Sam Porcello the previous food scientist of Nabisco also has several patents on his name.

As I mentioned before in order to stay competitive in the business Oreo has to put a lot of effort into marketing and change their recipe in order to satisfy the demands of their customers. Recent efforts include promotions with several successful football, basketball players and tennis stars. Public support for gay people and clever use of social media during popular events. The efforts have been paying off. Oreo is still the most popular biscuit in more than 18 countries and the brand’s sales are one of the strongest for Mondelez.