strategic-management

the largest food company in the United States and the second largest in the world. Initially
the merger created a competitive advantage for the newly formed subsidiary; the company
was able to save $400 million through consolidations and increased purchasing power.
Philip Morris acquired Nabisco for $14.9 in cash plus the assumption of $4 billion
in debt. Philip Morris completed its acquisition of Nabisco in December 2000 and immediately
began integrating the Nabisco operations into those of Kraft Foods and Kraft
Foods International. In 2001, Philip Morris created a new holding company for the combined
operations known as Kraft Foods Inc. (lacking the comma of the previous Kraft
Foods, Inc.). The previous Kraft Foods was renamed Kraft Foods North America, giving
the new Kraft Foods two main units: Kraft Foods North America and Kraft Foods
International. The two CEOs of these units, Betsy D. Holden and Roger K. Deromedi,
respectively, were named co-CEOs of Kraft Foods Inc. In June 2001, Philip Morris sold a
16.1 percent stake in Kraft Foods to the public, retaining the remaining shares. The second
largest initial public offering (IPO) in U.S. history, the offering raised $8.68 billion,
which Philip Morris earmarked to reduce debt it had incurred in acquiring Nabisco. The
result of this IPO is that Kraft Foods Inc. is a company that is less than 10 years old.
Internal Information
Organizational Structure
It took several years to complete the spin-off of Kraft Foods Inc. from the Philip Morris
Company. During that process, Kraft Foods Inc. saw a number of changes in its leadership
team. The most significant was that Irene Rosenfeld was appointed CEO in June 2006; she
assumed the position of chairman of the board in March 2007. The organizational structure
of the management team is provided in Exhibit 1. Note the chart is divisional by
geographic region. Some analysts feel that a by-product divisional structure would be
more effective for Kraft.
Company Mission and Ethics Statement
The Kraft Foods Inc. mission statement was presented to the general public during the
CAGNY Conference in February 2009. According to the Kraft Foods Inc. Web site
(http://www.kraftfoodscompany.com/About/who-we-are/), the mission statement consists
of three words and reads as follows:
Make Today Delicious.
In order to fulfill this mission Kraft Foods Inc. focuses on consumers in everything that
they do. The company also understands that actions speak louder than words, so at
Kraft Foods:
• We inspire trust.
• We act like owners.
• We keep it simple.
• We are open and inclusive.
• We tell it like it is.
• We lead from the head and the heart.
• We discuss. We decide. We deliver. 1
EXHIBIT 1 Structure of Management Team at Kraft Foods Inc.
David Brearton
Exec. VP of
Operations &
Business
Services
Marc Firestone
Exec. VP of
Corp. & Legal
Affairs
Michael Clarke
Exec. VP and
President Kraft
Europe
Karen May
Exec. VP of
Global Human
Resources
Source: www.kraftfoodscompany.com and Company Form 10K.
Irene Rosenfeld
Chairman and
CEO
Sanjay Khosla Richard Searer
Exec. VP and Exec. VP and
President Kraft President North
International America
CASE 19 • KRAFT FOODS INC. — 2009 185
Jean Spence
Exec. VP of
Research,
Development &
quality
Michael
Osanloc
Exec. VP of
Strategy
Mary Best West
Exec. VP and
Chief Marketing
Officer