strategic-management

Prior to 2006, ConAgra was a holding company. It was built over several decades by dozens
of acquisitions. But unlike most major competitors, there was no strategy to integrate. The
company grew much bigger, but developed no scale leverage. It was characterized by independent
operating companies and functional silos. In large part, its success or failure was
deal driven. And there was a mandate that all businesses, all brands must grow and were
handed resources without much segmentation or prioritization.
The most visible change that has occurred at ConAgra Foods was the sale of the commodity
trading group; the result of this action is that ConAgra now has a total focus on food
rather than food, fertilizer, and ethanol. Other changes include integrating the supply chain
infrastructure, upgrading food safety, investing $25 million into training initiatives, focusing
on research and development, and investing $170 million into manufacturing automation
and modernization.
Conclusion
After reviewing Kraft Foods’ Form 14A, which details executives’ compensation for 2008,
a number of analysts have increased their criticism of Rosenfeld because her compensation
grew by more than 50 percent in 2008. But this woman is one of the top, if not the top
(most effective), female managers in the United States.
Kraft just reported strong second quarter 2009 result although revenues declined 5.9
percent year-over-year to $10.2 billion, primarily due to the unfavourable negative 8.1 percent
impact of foreign currency and a negative 0.7 percent impact from divestitures. Kraft’s
organic revenues increased 2.9 percent. For that quarter, Kraft’s North American segment
(KNAC) sales were flat year-over-year as gains in U.S. Convenient Meals (7.1 percent),
U.S. Grocery (6.7 percent), U.S. Beverages (6.0 percent), and U.S. Snacks (1.3 percent)
were offset by the declines in U.S. Cheese (8.7 percent) and Canada & North American
Foodservice (10.0 percent). In the International segment, net revenues in the European
Union decreased 17.4 percent. Based on the strong year-to-date performance, CEO
Rosenfeld has raised guidance for 2009. She now expects earnings of at least $1.93 per
share compared to $1.88 guided earlier.
Endnotes
1. www.kraftfoodscompany.com
CASE 19 • KRAFT FOODS INC. — 2009 191