Kraft in Asia: Lessons From a Turnaround

by Knowledge@SMU, 15 March 2010

4 comments

Facebook

Digg

Twitter

topics:
Management

tags:
innovation Kraft Foods Pradeep Pant risk-taking self awareness winning mindset

As a 34-year veteran of the fast moving consumer goods (FMCG) industry, Pradeep Pant, President of Kraft Foods Asia Pacific, can say quite convincingly that he knows the key to successful leadership.

The magic lies in a “winning mindset”: a trait that can make all the difference between making profits or suffering losses under trying business conditions. Pant, who spoke at a recent Wee Kim Wee Centre seminar at the Singapore Management University, said that it was this “winning mindset” that helped turnaround Kraft Foods’ Asia Pacific business.

Kraft Foods made the news recently when it launched a US$19.5 billion takeover of Cadbury plc, the British candy maker famous for its iconic purple-wrapped chocolates. This was barely three years after Kraft’s US$7 billion acquisition of Group Danone’s global packaged baked-goods business. Clearly, Kraft Foods is not a humble company merely selling cheese. Rather, it is one of the largest food manufacturers around.

On February 16^th, the company reported that operating profit for the fourth quarter ended December 2009 nearly quadrupled to US$1.3 billion, on the back of a 3.2% increase in revenue to US$11 billion in the same period.

Today, Kraft Foods’ products can be found on the shelves of supermarkets and grocery shops in 160 countries. In its stable is a line up of 11 ‘billion-dollar brands’ like Nabisco, Oreo, Philadelphia Cream Cheese, Maxwell House, and of course, now Cadbury, as well as dozens other in the ‘hundred million brands’ category.

Naturally, within such a sprawling business organisation, it would be impossible for every cylinder to be firing at the same speed all the time. While emerging markets are a critical engine of growth for Kraft Foods today, the Asia Pacific division was struggling with low to flat growth between 2001 and 2007. However, around 2007 onwards, three major ‘change’ factors came together.

First, there was a global reorganisation led by Kraft Foods’ CEO, Irene Rosenfeld, to move decision-making closer to local consumers and customers. Next, Kraft Foods acquired the Danone biscuit portfolio. Finally, new leaders, like Pant, were brought in. Since 2008, operating profits have been growing at double digit rates – despite the recent economic downturn.

From a regional business unit with relatively sluggish top line growth, Kraft Foods Asia Pacific has since taken on the mantle of being the global company’s growth engine. The Asia Pacific business now boasts approximately 6,400 employees across 15 markets, 21 manufacturing plants in eight countries around the region, and eight research and development centres.

According to Pant, who took on the job in January 2008, what drove the turnaround were: a clear strategic focus where Kraft Asia can win, consumer insight-based innovation, a powerful integrated marketing initiative, aggressive in-market execution, and heavy investment in people.

But all these would not have worked without the willingness to get into the mindsets of “we will be leaders” and “we will win.”

Eyes on the Prize

To win, it is necessary to focus. In many organisations, the focus is on the core business. Focus means knowing what you want. But it is useless to know what you want if you cannot articulate it, for you will not be able to formulate a robust plan and steer your team or organisation towards your vision.

Hello, The fast and

Submitted by stain123 JJJKJM on 2 December 2011 - 10:13am

Hello,
The fast and convenient online store offering your favorite right here in the USA. We invite you to browse through our store where you can find a wide range of British food favorites including English teas, Cadbury chocolate, Mcvities and Heinz to name a few. Order today, we offer the cheapest British food prices online and guarantee a fast and friendly service.

British Food
cadbury chocolate

Hello, The fast and

Submitted by stephen6780 sing on 30 October 2011 - 7:21pm

Hello,
The fast and convenient online store offering your favorite [url=http://www.britishfooddepot.com/]british christmas food[/url] right here in the USA. We invite you to browse through our store where you can find a wide range of British food favorites including English teas, Cadbury chocolate, Mcvities and Heinz to name a few. Order today, we offer the cheapest British food prices online and guarantee a fast and friendly service.

Hello, The fast and

Submitted by stephen6780 sing on 30 October 2011 - 7:19pm

Hello,
The fast and convenient online store offering your favorite British Food right here in the USA.http://www.britishfooddepot.com/

Hello, The fast and

Submitted by stephen6780 sing on 30 October 2011 - 7:17pm

Hello,
The fast and convenient online store offering your favorite British Food right here in the USA. We invite you to browse through our store where you can find a wide range of British food favorites including English teas, Cadbury chocolate, Mcvities and Heinz to name a few. Order today, we offer the cheapest British Food prices online and guarantee a fast and friendly service.

Comment on this article

Accounting and Regulations

CFO innovation Asia Accounting and Regulation the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Accounting Regulation, IFRS, US GAAP, Tax, investor relations, corporate governance, Corporate Law, Financial Regulators, Internal Audit, Audit, Corporate Law.

Auditing, Investor Relations, Law and Compliance, Tax

Finance and Banking

CFO innovation Asia, Finance and Banking the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Corporate Finance, trade finance, treasury and risk management, capital expenditure, Banking, mergers and acquisitions

Cash and Liquidity Management, Corporate Finance, Insurance, Treasury Management

Management

CFO innovation Asia the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Management, Corporate Governance, Human Resource Management, Compensation and Benefits, Mergers and Acquisitions, Professional Development, Corporate Real Estate, Risk Management, Budgeting and Forecasting, Business Process Management, Business Process Reengineering, Outsourcing.

Budgeting and Planning, Business Expense Management, Human Capital Management, Outsourcing and Shared Services, Risk Management

Metrics

Corporates, Financial Services

Technology

CFO innovation Asia Technology the Asia Pacific resource center for senior finance executives, daily news, analysis, best practice and case studies in Finance Systems, Business Intelligence, EPR, Accounting software, CRM, Cloud Computing, Telecommunications, Business Process Outsourcing, Business Process Management Software.

Business Intelligence, Enterprise Software and Systems, Financial Systems, Security

CFO innovation ASIA