Mondelez Moves to Jordan

TABLE OF CONTENTS
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Abstract………………………………………………………….Page 3
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Introduction………………………………………………...……Page 4
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Company Background…………………………..……………… Page 4-6

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Jordan Background………………………..……………………..Page
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SWOT Analysis………………………………………………… Page 8-11

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Entering Jordan………………………………………………..…Page 10-12

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Conclusion………………………………………………………Page 12
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References……………………………………………………….Page 13-14
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Abstract

Mondelez International, a company founded in October of 2012, is one of the largest

companies that produces snacks globally. Mondelez International operates in over 150 countries

and is the largest publicly owned company. If Mondelez International operates seamlessly in so

many countries, will it be successful if it is established in a country like Jordan? What are the

steps needed to take to move such a successful company to a country that it currently has no

presence in? In this paper, the background of both Mondelez International Company and the

country of Jordan will be discussed. Also, an overview of a SWOT analysis for both Mondelez

International and Jordan. The analysis will cover Strengths and Weaknesses of Mondelez

International as well as the Threats and Opportunities of the country of Jordan. The steps that

will need to be taken in order to make their way into the Middle Eastern country of Jordan. As

long as Mondelez International enters the country of Jordan following the required procedures,

they will be successful, as they have proven to be in other countries globally.

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Mondelez International Company is moving to Jordan

Snacking is not a fad that will go away with time. People snack whether it be on healthy

or junk foods, consumers will always buy snacks. Cookies, gum or chocolate, there is a major

customer base for these types of snack foods. Mondelez International’s company name is not a

household name, however its many brands are. After further researching this company that I have

never heard of before, I discovered that I am familiar with most of Mondelez International’s

brands which include Cadbury Dairy Milk, Toblerone chocolate, Oreo, Ritz, Chips Ahoy,

belVita, Trident gum and the several others that operate under their brand. Mondelez

International primarily sells snacks such as cookies, crackers, and salted snacks, as well as

chocolate, candy, gum and powdered beverage products (Mondelēz International, Inc, 2020).

These brands are easily found and recognized in any market worldwide.

Company Background

Mondelez International is a cookie and cracker manufacturing company headquartered in

the United States in Deerfield, Illinois began its operations as Mondelez in October 2012. The

company was originally founded by Thomas H. McInnerney as Kraft Foods Inc. in 1930

(Harvard business school, 2019). Dirk Van de Put is the company’s current Chairman and Chief

Executive Officer, and he has been in that position since November of 2017 (Mondelēz

International, Inc, 2020). Mondelez International has a strong presence in markets globally, their

products are well known and liked. They also have a strong company culture that believes in

empowering their teams to deliver the best snacks to their consumers. They are innovative and
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always growing as a company. Currently, they employ over 83,000 people globally. Their teams

consist of a talented and diverse group of individuals to help grow their business the way they

hope for it to succeed. According to their website they are working more with a digital

transformation to build an excellent supply chain. They have set sustainability goals that they

wish to achieve by the year 2025 (Mondelēz International, Inc, 2020). These goals include

improving the production of all of their snacks by using fewer resources and creating less waste.

They hope to improve all of their products by making sure the ingredients they are using are the

best possible ingredients they could be using. The way this company works globally is very

interesting. Known as Mondelez (MDLZ) in the stock market, they are one of the largest publicly

owned snack companies in the world. According to their website, this company operates

factories, offices, distribution centers, and research and development locations in over 80

countries, and they distribute to four regions of the world to over 150 countries. In 2018 globally,

their net revenues were at about $25.9 billion, with net earnings of $3.4 billion. (About Us, 2020)

Mondelez International states on their About Us webpage that they have even made it to the

Fortune Magazine’s most admired list, and based on their total revenue in 2018; they also made

it to the Fortune 500 list of largest United States corporations. They are a strong company

globally and have great international presence.

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Mondelez (MDLZ) in the stock market, they are one of the largest publicly owned snack

companies in the world. According to NASDAQ’s website, Mondelez International, Inc.

MDLZ is a Class A Common Stock. Most recently, the stock prices are at $52.12 and

included below is current data showing their progress since becoming their own

corporation. Since their creation from Kraft Foods, Inc. their presence in the

markets have grown. They started it approximately $27 when they first started in

October 2012.
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("Stocks MDLZ," 2020)

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Competitors

There are many other snack companies, big or small they will be a competitor to this

company. Mondelez International's top competitors include Lindt & Spruengli, Nestle, Pepsico,

Tootsie Roll Industries, Hershey, Unilever, Kraft Group, Pladis, Kellogg and Mars (Craft,2019).

When moving into a new country, Mondelez would be considered a new entrant and a threat to

its future competitors. Although the culture of the country is accustomed to the products these

competitors offer, they may prefer the new products that they have become available more.

Background of Jordan

Once known as the Hashemite Kingdom of Jordan, Jordan gained its independence on

May 25, 1946 ("Country Profile: Jordan," 2006) According to a census conducted in 2018

Jordan’s population is 9.956 million up from the 2004 census found on its Country Profile page

of 5.1 million. The primary language in Jordan is Arabic with a majority of its population being

of Muslim religion. Jordanian dinar is the currency used in this country. One United States dollar

converts to 0.70900 Jordanian Dinar and vice versa one Jordanian Dinar converts to 1.41044

United States Dollar. ("XE: Convert USD/JOD," 2020). The country of Jordan is small and is

limited with its natural resources so they import a majority of their products. Currently there is a

Free Trade Agreement (FTA) with the United States.

SWOT Analysis
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Strengths of Mondelez International

Mondelez International has many strengths as a company. They may not be a household

name, but the brands under their company are well known globally. Since its beginning, this

company has put an emphasis on being innovative and has continued to do so throughout the

years. Mondelez has a powerful following on social media, according to their Instagram account

they have over 19k followers. When Mondelez exports to other countries, they have been known

to modify their products to make them a better fit for that country. They are in the business of

selling delicious snacks, cookies, candy and chocolates that are always desirable to consumers.

They have strong presence in markets in the United States as well as internationally. They have

the cash flow necessary to continue operations for years to come. Mondelez focuses on satisfying

its customers at a high level. Their workforce is solid and composed of highly skilled workers.

From what they have proven in the past, they are capable of being successful with mergers and

acquisitions. Most of their employees would say that are happy working for Mondelez

International. Based on a review from a former employee on Indeed.com, they say that Mondelez

was a great place to work and they provided training to help employees achieve their goals. Their

workforce is diverse because they operate in so many countries and with so many different

cultures.

Weaknesses of Mondelez International

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Mondelez International currently has many snack options. Although they have a strong

market of brands, there are many more snack option opportunities that they can produce but do

not. This allows room for competitors to step in and create the products they are lacking taking

away from their consumers. They currently spend a lot on research and development because

they are concerned with always being innovative and on top. Because they focus their attention

on being number one in their industry, they seem to have a high turnover rate. They spend on

training and development of their teams because they are constantly hiring new employees to

replace the ones lost. According to a former employee, Mondelez had them overworked and

underpaid and the pay did not match their work skills and workload (Indeed.com, 2019). They

tend to not hire as many employees as needed; instead, they make larger workloads for their

employees. For them as a company they are cutting costs and budgeting their workforce but this

leaves workers feeling unappreciated and taken advantage of. Having employees working in

these conditions does not allow for a high moral in the company forcing good employees to look

for employment opportunities elsewhere.

Opportunities in Jordan

Jordan has improved the legal rights they had in place for those starting a business to be

able to borrow from lenders with more ease. Jordan has the opportunity to expand Mondelez

International’s name in a new Middle Eastern country. Jordan has improved its business climate

and in 2019, they were selected as top three global improved countries that changed their

business practices because of new economic reforms they were enacted that same year (World

Bank, 2019). The United States and Jordan have a Free Trade Agreement allowing for ease of
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exporting and importing. Because of the currency difference, the US dollar holds more value,

which is beneficial when choosing a country to do business with. The cost of labor and materials

will be more cost efficient for Mondelez International’s United States headquarters. Foreign

investments made in Jordan will boost its economy and allow for more jobs, which in turn will

bring more revenue to the country. By entering Jordan and creating more jobs, Mondelez will be

giving their economy a boost that will allow for more education opportunities to its people.

Threats in Jordan

Creating a business in any foreign country has its risks. Competitors are a major risk, the

country has its established companies and its people are familiar with the products these

companies provide. When bringing a new company in with new products, the competition may

be preferred and favored by its people. Aside from the competitors, transparency is a major issue

that Jordan faces while doing business with them. There are many requirements that need to be

fulfilled prior to even thinking about bring a business there. Special approvals are required when

registering a company in their country and often times it is unclear exactly what is required.

Although the registration process of a company may only take 1 day to complete, the Jordanian

government may stop the process until it obtains the proper approval from other government

entities ("Challenges of Starting a Small Business in Jordan," 2003). It is difficult to obtain

vocational licensing because the requirements and procedures to obtain them are complicated.

Some of the information they require is irrelevant or unclear. Another issue is access to

financing. Generally, banks and investors play a critical role in assisting with the financing of a

firm. The Bank of Jordan is not an accredited Credit Bureau and cannot assist with securing

loans. (Challenges of Starting a Small Business in Jordan, 2003) One must come up with the
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money to finance a business on their own. Corruption affects the country of Jordan and many

other countries like it. The simple fact that they make the process to start up a business so

difficult there. The government does not seem to know what transparency is. Along with the red

tape and transparency issues, the government in traditional Middle Eastern countries is strict.

Entering Jordan

In order to create a presence in Jordan it is helpful to have a strong expatriate head this

assignment. An expatriate that either has knowledge of the language and customs or one that can

have a professional interpreter or a colleague that can assist with translations the

communications with the necessary officials. This person must be respectful of the country and

its culture and customs. First steps would be to connect with local bureaucracy, follow internal

regulations and work with local agriculture to familiarize themselves with the resources

available. According to Jordan’s United States Embassy, to consider an investment in Jordan, one

must Contact local U.S. business support organizations, register with the U.S. Embassy business

plans and investment ideas.

Jordan’s regulations on foreign investors have changed since they first gained their

independence as a country. “Since 2009, Jordan has made it easier to start a business, deal with

construction permits, obtain credit, pay taxes, trade and enforce contracts while making it less

costly to transfer property” ("Doing business – Jordan," n.d.). With Jordan creating more easily

accessible business opportunities throughout the years it has allowed for more foreign investors

to come in and help their economy flourish. As recently as 2019, the government created 13 new

laws that allows for assistance for foreign investors with ownership, zoning and establishing
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ownership of locations ("Jordan economy," 2020). Once the expatriate contacts Jordan’s local

bureaucracy to attain the proper forms and follow their regulations they need to find a potential

location that Mondelez International can create their factory and get the approval from the

government as well as Mondelez. Since Mondelez has the cash flow necessary to buy or rent a

space, they will not need to apply for loans or worry about a bank lending them the means to

create a space. The best recommendation for this expatriate is to hire someone to assist with

recruiting locals to employ. Once the employees are hired, trainers should be brought in to give

them the proper training.

Conclusion

Mondelez International Company has potential to do business in every country

worldwide. The country of Jordan has a great opportunity for Mondelez International. With the

opportunities available in Jordan, Mondelez can create a factory allowing for more job

opportunities for the country and more revenue for their company, which in turn can be

beneficial for the economy in Jordan. Their website has a tab for anyone to contact them with

business ideas or expansion ideas, Jordan may be a good suggestion for them to try as a new

company to do business with.

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References

About us. (2020, May 1). Retrieved from https://www.mondelezinternational.com/About-Us

Challenges of Starting a Small Business in Jordan. (2003, May). Retrieved from

jsf.org/sites/default/files/Challenges%20of%20Starting%20a%20Small%20Business

%20in%20Jordan_1.pdf

Country Profile: Jordan. (2006, September). Retrieved from

https://www.loc.gov/rr/frd/cs/profiles/Jordan-new.pdf

Craft. (2019). Mondelez International Competitors Retrieved from

https://craft.co/mondelez-international/competitors

Doing business – Jordan. (n.d.). Retrieved from

https://inform.gov.jo/en-us/By-Date/Report-Details/ArticleId/53/Doing-Business-Jordan

Getting started with business in Jordan. (2019, July 2). Retrieved from

https://jo.usembassy.gov/business/getting-started-jordan/

Harvard business school. (2019). Thomas H. McInnerney - Leadership Retrieved from

https://www.hbs.edu/leadership/20th-century-leaders/Pages/details.aspx?

profile=thomas_h_mcinnerney
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Jordan economy: Population, GDP, inflation, business, trade, FDI, corruption. (2020). Retrieved

from https://www.heritage.org/index/country/jordan

Mondelēz International, Inc. (2020, May 1). Mondelēz International, Inc.

https://www.mondelezinternational.com/

Stocks MDLZ. (2020, May). Retrieved from

https://www.nasdaq.com/market-activity/stocks/mdlz

Working at Mondelez international: Indeed.com. (2019). Retrieved from

https://www.indeed.com/cmp/Mondelez-International/reviews

World Bank: Jordan joins the top 3 global improvers. (2019, October 24). Retrieved

from https://www.worldbank.org/en/news/press-release/2019/10/24/doing-business-2020-

with-a-strong-reform-agenda-jordan-joins-the-top-3-global-improvers

XE: Convert USD/JOD. United States dollar to Jordan dinar. (2020). Retrieved from

https://www.xe.com/currencyconverter/convert/?From=USD&To=JOD