ASSIGNMENT SUBMISSION FORM

Course Name: CDMA

Assignment Title: KRAFT
Submitted by: Meghna Jain
PGID: 62110215

ISB Honour Code

• I will represent myself in a truthful manner.

• I will not fabricate or plagiarise any information with regard to the curriculum.
• I will not seek, receive, or obtain an unfair advantage over other students.
• I will not be a party to any violation of the ISB Honour Code.
• I will personally uphold and abide, in theory and practice, the values, purpose and
rules of the ISB Honour Code.
• I will report all violations of the ISB Honour Code by members of the ISB community.
• I will respect the rights and property of all in the ISB community.
• I will abide by all the rules and regulations that are prescribed by ISB.

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 Q1. Why has the merger of Kraft and General Foods been such a success?
The business of Kraft and GF were extremly complimetnatry to each other with both of them
being in Food business . There was very little overlap in the product line which resulted in
minimum cannablsim and fewer regulatory hurdles
The Richman was able to move quickly with the integration while acquisition was still fresh to get
the benefit of chaos , The entire approach was structured and meticulously planned to have the
complete control of operations during trasnsiton and retain the quality personnale.
Further they were able to get some unexpected sysnergy benfits from the integration namely in
following area
Purchase
• They consolidated the purchases to get the lower of the negotiated price across both
enitites ( Eg. Media Purchase at GF price instead of Kraft Price to save 15Mn USD)
• Wherever possible they combined the raw material purchase to get the volume discount
or have a greater leverage ,
• Internal Sourcing of Products wherever possible

Overhead
• Reduction in domestic Staff and Interantional Staff due to restructuring
• Cosolidation of Supply Chain
• Better Capacity Utilization of manufacturing facilites for quicker rollout

Prodcut Devolpment
• Sharing of Technology and expertise
• Repurposing of R&D investment on one company into another company

Q2. What does Kraft contribute to General Foods?

Kraft Acquistion had the following benefits for GF :
• R&D sharing for devolpement of new product line
• Increased Internal Presence and Distibutor network
• Joint Marketing of both product lines which were complementary to eachy other resulting
in favorable Customer response
• Strong Management style which rooted in food based background not Tabacoo based
• Alignement of Operating philosophy likes brand building , brands extendison , new
product line with Parent Company

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 • Increased leverage in certain purchases due to higher volume .

Q3. What does Philip Morris contribute to KGF, and what does KGF give Philip Morris?
Philip morris ensured that the meger of Kraft and GF was successful , They manainted a Hands-
off approach with regular reviews, Further they planned the entire approach meticulously without
wasting any time , they were able to identify the are where synergy can be built like purchase ,
R&D , etc . The chose the best personeel for management instead of diving the possitons between
two companies.
KGF provide the Philip Moris a strong diversified porflio in food segment and an opportunity to
have a significant revenue source other than tobacco . Further it provided a based through wichi
Philip moris was able to grow in ffod industy with further aqusitions in future

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