INTERNATIONAL BUSINESS ENVIORNMENT ASSIGNEMNT

Submitted by Supreet Narang (PGP31238)

Section D
I, Supreet Narang. Do hereby declare that the report is my individual effort and that no part of
the report is copied from published/unpublished sources without proper citation

ConAgra Food Inc

Knowing a leading enterprise and Its Internal Environment
Contents
EXCECUTIVE SUMMARY ................................................................................................................................ 2
Origin............................................................................................................................................................. 2
Vision & Mission ............................................................................................. Error! Bookmark not defined.
Core Values .................................................................................................... Error! Bookmark not defined.
The Corporate Governance ............................................................................ Error! Bookmark not defined.
External Stakeholder Engagement................................................................................................................ 6
Management Strategy .................................................................................................................................. 6
Management Structure ................................................................................................................................. 7
SWOT Analysis............................................................................................................................................... 8
Market Performance & Growth .................................................................................................................... 8
Bibliography .................................................................................................................................................. 9

EXECUTIVE SUMMARY
The study is conducted to examine how efficiently the enterprise ConAgra Food Inc has used
its forces that drives the internal environment in making a positive change towards its brand
equity and valuation. The value system and approaches followed by the company has been dealt
in detail to see how they plan to achieve their mission and long term goals. The corporate
governance and the organization structure is a true reflection of the core values being
emphasized by the company. This can be visualized right from the hiring process giving much
importance to globalization and sustainability. A SWOT analysis has been carried out to see the
internal and external factors affecting the Company and a brief summary of the recent
performance has been analyzed to get a better picture to discuss the future growth aspects.

ORIGIN
The company started its operation in 1919 as Nebraska Consolidated Mills and was later
renamed to ConAgra Food Inc in 2000. It is among fortune 500 companies and has more than
30000 employees. It generated a revenue sales of $2.8 billion in fiscal year 2015. Its head is in
three location-Omaha, Kennewick, Naperville. Their famous brands include peter pan, crunch
and Munch, Marie calenders, Blue Bonnet, egg eater, Poppycock, dennisons, lamb Weston. It
can be categorises in term of sales into 5 segments : Frozen, snacks, Grocery, Store Brands and
commercial.
And its division can be categorised into 2 segments:
Commercial Foods
63%
Grocery
Mass Merchandise stores
Club Stores
20 brands in No. 1 or No.2 in their respective
categories.
Offer meals of less than $3 in most of the
categories.
Posted sales of ~$1.7 billion in fiscal 1Q16.

Consumer Foods
37%
Restaurant and commercial customers

Sales for the Commercial Foods segment

were $1.1 billion

It comprises of Specialty potato,

seasonings, blends, flavors, and bakery
products, as well as packaged food items
sold to restaurants, as well as
foodservice and commercial customers

MISSION STATEMENT
One company growing by nourishing lives and finding a better way today one bite at a
time."
2

SLOGAN
"ConAgra. The right kind of food company

FOOD COMMITMENT
Good food doesnt only means food that have taste, nutrition but it goes much beyond a
balanced life style also. A food is considered to be good when its procurement is done in a
sustainable way that is without affecting the environment in any form. Sourcing the ingredient
in a responsible way and using most of the natural ingredients is the main philosophy of making
foods at ConAngra food inc. CongAgra also give back to the community in every way possible. It
means growth should not come at any cost , infact it should create value.
That's why ConAgra Food have created Good Food, Stronger Communities and Better Planet to
drive robust environmental and social impact initiatives. It brings these commitments to life by
embedding integrity into its sustainable business practices and developing innovative programs
that deliver on their promise of being a leading corporate and community citizen. Their areas of
focus include those activities that will bring maximum value for stakeholders.
ConAgro has won prestigious Dow Jones Sustainability Index for past five years for embedding
economic, social and environmental performance in their business results. Dow jones
sustainability index recognises the sustainability leaders and company ewho have made the
mark by adopting sustainable practices in their business processes and operations.
Ending Child Hunger
CongAgra Food Inc is addressing the hunger issue of children by partnering with Non Profit
Organisation over 20 years and has donated million of dollars to address this issue. It is also
working towards an inclusive participation seeking the help of people nationwide to address
this issue.They are constantly inspired by vision to create better lives for kids across the
country.
Sustainability vision-2020
With an increasing population and consequently a huge pressure has been created on the
resources. So it is very important that sourcing of the raw material should be done in a
sustainable way and sustainability of agriculture is pertinent. To address this challenge ConAgra
is working in a sustainable way by following below methodology:
Firstly, ConAgra Food Inc is focused on efficiently using resources like energy, water and
materials to improve effectiveness in processes and operations.
Secondly, they are working on smart sourcing that is they are sourcing from suppliers and
farmers in such a way so as to meet the resource availability in future.

ConAgra holds sustainability Development Award annually to award the people and team who
have created and implemented impactful and innovative sustainable projects. Over 80 projects
were recognised last year for cutting down on waste , conserving water and reducing green
house gases. All these project resulted in a saving of $70 million dollars.

CORE VALUES
Integrity, trust and commitment are the main pillars for any organisation to succeed and to be
in a meaningful and sustainable business. ConAgra Food Inc works on four principles and their
value system is guided by these four principles- simplicity, accountability, collaboration and
integration. These principles serve as a code of conduct and lay the foundation of ethics and
behaviour.
Simplicity : is not about doing less. It is removing all the elements which dont contribute to the
competitive advantage. Simplicity in processes and operations help a organisation to grow and
channelize its energy in right direction. ConAgra focus on simplicity helps it to achieve its goal of
serving customers and provide them with high quality products and outstanding services,
focusing on the delivery of goals in compliant and ethical manner.
Collaboration : is working together so as to achieve the goals set. Working together as a team is
more valuable than working apart. Working as a team brings the best in us and ethically,
collaboration means that everyone is aware about the responsibility assigned and is
accountable for the work he does. When we trust and teach others, we win together.
Accountability : means doing the thing in the right way which meets the organisation
standards and ethics. All must be accountable for the work they do and know the
responsibilities assigned to them and build on the expectations that is set. When we hold each
other accountable for raising the bar, and we constructively challenge each other, we all benefit
our customers, consumers, shareholders, communities and employees.

Imagination : means thinking of the way to improve the work in all areas, including compliance
and ethical matters. People are the most valuable resource for the organisation and are the
source of new thinking and ideas. All must use their skills and capability to make the processes
more efficient in an ethical way.

CORPORATE GOVERNANCE
Sound Corporate governance is the integral part of any company foundation and traditions.
ConAgra Food Inc follows the following corporate governance:
1. Except the Chief Executive Officer, none of the directors have been, employed by the
Company.
2. Directors and executive officers are committed to owning stock in ConAgra Foods.
Directors can sell the stocks only if they meet the stock retention guidelines.
4

3. Loans to directors or executive officers are not permitted.

4. ConAgra never re-price stock options.
5. Audit / Finance Committee consists of independent directors, all of whom meet the
requirements to be an audit committee expert as defined by the SEC( Security and
Exchange Comission)
6. Human Resources Committee consists of independent directors who review and
evaluate the CEO's performance and compensation.
7. Nominating, Governance and Public Affairs Committee comprises of independent
directors who establish the corporate governance principles for ConAgra Foods
8. Non-employee directors routinely meet in executive session without management
present.
9. The Chairman of the Board is an independent director who is not an executive of the
Company.
10. Audit / Finance Committee has the authority to retain and replace independent
auditors.
11. Auditing is done by lead partner of independent auditing firm who is rotated at least
every five years.
12. Employees are encouraged to own ConAgra Food Inc.
13. ConAgra Food commitment to the Code of Conduct is part of their longstanding
standards for ethical business practices.
14. Governance principles include guidelines for determining director independence,
qualifications for directors (including a director retirement age), an annual evaluation of
the Chief Executive Officer, annual director evaluations and an annual Board and Board
committee self-evaluation.

EXTERNAL STAKEHOLDER ENGAGEMENT

Company doesnt disclose the way it deals with policymakers and government over nutritional
issues. It needs to maintain transparency in this matter and disclose more.

MANAGEMENT STRATEGY
Divestiture Strategy : ConAgra has planned to sell its private label business so as to focus on
the brands with great value and high potential growth. It will allocate resources across those
brands and channel from which high return is expected. By identifying strongest brands and
channel , it aims to realise better price mix, margin improvement and trade efficiencies.
The private brands was acquired for $5 billions and it generated $4.06 billion in sales for the
sales but the revenue generated from this business is decreasing and now stands at one-tenth
of its revenue sales.
5

Customer Retention Strategy : ConAgra plans to invest in brand building, innovation ,

renovation so as to make the product of good quality and packaging attractive. This will help to
retain the customers and will also tap into the growing customer needs.
Operational Efficiency : ConAgra will focus on improving margin by making supply chain more
efficient and cutting on Selling, general and administration expenses. Management is working
on working capital saving initiatives that includes consolidation of inventory, SKU management
and rationalisation.
Company is also investing in advanced supply chain technology that includes demand sensing
and multi-echelon inventory optimisation.
Company is also working towards smart sourcing techniques.
Sales Finance

CFO
CEO

Finance

Growth

M&A
Strategy

Treasurer

Supply
Chain
Chairman
of Board

Supply Chain
Finance

Sales

Customer
Strategy

Legal &
Secretary

Director

Sales
Lamb Weston

Consumer
Food

Consumer
Food Frozen

Commercial
Food

Digital
Marketing & PR

Communica
tion

MANAGEMENT STRUCTURE

SWOT ANALYSIS
Strengths

Weaknesses

Increased focus on Research and

development
Strong Brand recognition
Diversified Brand portfolio
Cost Advantage and pricing power with a
higher production rate
Efficient Supply Chain
Strong Financial Position that comes with
Financial leverage

Weak product quality. Faced many product

recall.
Poor customer service.
No step is taken to improve product image
Lack of scale
Bad Acquisition
A lot of investment is needed in technology
which is comparatively less to its
competitors to renovate products and its
packaging.

Opportunities

Threats

Acquiring production plants and businesses

Improving financial condition by cost cutting
and improving efficiency.
New Products, New Markets
Innovation
Online Market
Growing healthy habits among people and
growing food service sectors.

Economic crisis and slowdown

Intense Competition
Govt Regulations.
Changes in tastes
Substitute products

MARKET PERFORMANCE
ConAgra stock performance for the first quarter of fiscal 2016 was not good. The stock fell by
7%., closing at 39 dollars. After the release by the company regarding its split into two public
companies , the stock has risen to 40 $ and is in the range of 40-42 dollars. The stock has grown
by 13% over the last one year.
The company showed positive growth for two quarters . Its EPS (Earning per share) stands at
0.45 dollars and is expected to grow to 0.61 dollars by quarter two fiscal year 2016.It is
expected to grow at the modest rate in fiscal 2016 across consumer and commercial foods
segments . The operating profit of the Consumer Food segment quarter one fiscal 2016 was
$242 million compared to $193 million in fiscal 1Q15 which is a rise of 22% on year on year
basis. The Commercial Food segments reported operating profit rose 17% while adjusted
operating profit rose 13%.

The company is planning to achieve more profit by implementing cost cutting strategy mostly
by cutting selling, general, and administrative expenses (SG&A) and enhancing trade efficiency
and is also in the process of selling private label brand. The top line will improve by following
portfolio segmentation work and implementing innovation across processes and operations. It
is on a path of becoming a more leaner company.
The operating, gross, and net margins for fiscal 2016 quarter one is projected to be 13%, 24%,
and 8.2%, respectively.

The company is investing in creating long term value through

Reducing cost by cutting down on selling ,general and administration expenses
Selling private label operations .It is expected to generate ~$2.7 billion in proceeds from the
deal and plans to utilize the net proceeds primarily for debt reduction.
growing consumer brands and Lamb Weston
Managing capital allocation in such as a way to reap maximum profit.
The following graph shows the revenue of ConAgra Foods

Bibliography
1. http://marketrealist.com/2015/12/consumer-food-segments-contribution-operating-profit/
2. http://www.accesstonutritionindex2016.org/index/2015/company/conagra/pdf/atnindex.2015.score
card.conagra.20160114.190423.pdf

3. http://www.conagrafoods.com/news-room/news-ConAgra-Foods-Issues-2015-CitizenshipReport-2090339

4. http://media.corporateir.net/media_files/IROL/97/97518/ConAgra_2014_Citizenship_Report.pdf
5. http://www.theofficialboard.com/org-chart/conagra-foods
6. http://www.conagrafoodscareers.com/about-conagra-foods/leadership/