SWOT analysis, developed as a result of detailed external and internal analysis, is a valuable instrument used in strategic management. In this report, the target company is Mondelez International Inc. The purpose of this report is to perform internal analysis of strengths and weaknesses of Mondelez International Inc. (former Kraft Foods company) using the approach of resource-based view and value chain approach, compile the results of internal and previously done external analysis into SWOT matrix, analyze SWOT matrix and generate strategic recommendations for Mondelez International Inc. basing on SWOT analysis.
Overall, 10 strengths and 7 weaknesses were identified, along with 5 opportunities and 5 threats. Major part of the company’s strengths belongs to primary activities, which means that the company has rich potential for growth and expansion. Using the TOWS approach, strategic recommendations were developed on the basis of SWOT analysis. Strategies were predominantly selected from S-O and S-T groups (5 and 4 strategies accordingly), with one important strategy mentioned from the W-O segment.
Analysis of organizational strengths, weaknesses, opportunities and threats (SWOT) is a powerful business instrument, which is actively used for strategic planning. SWOT can be used for setting objectives, scanning the environment, for analysis of existing strategies, identification of strategic issues and development of new strategies (Daft & Marcic, 2010). The purpose of this report is to perform internal analysis of strengths and weaknesses of Mondelez International Inc. (former Kraft Foods company), compile the results of internal and previously done external analysis into SWOT matrix, analyze SWOT matrix and generate strategic recommendations for Mondelez International Inc. basing on SWOT analysis.
1. Internal analysis of Mondelez International Inc.
1.1. Primary activities
First of all, it is necessary to identify internal strengths and weaknesses of Mondelez International. In this report, the combination of value chain analysis and resource-based view will be used (Henry, 2007). This section contains strengths and weaknesses related to primary group of activities, which includes production (manufacturing), research and development, marketing and sales, and customer service (Ireland, Hitt & Hoskisson, 2007). Using the results of the resource-based analysis outlined in SLP report, it is possible to determine the following strengths of the company associated with its primary activities:
1) broad network of suppliers and distributors
2) geographic diversity
3) broad range of products
4) focus on particular market niche (predominantly confectionery, gum and snacks)
5) strong goodwill
6) strong brand loyalty and brand awareness
7) strong R&D capacity (11 key technology centers)
Consideration of operations of Mondelez International Inc. and its development strategy allows to determine one more strength of the company related to primary activities: economies of scale, which are also empowered by the company’s innovative production cycle (Mondelez International, 2012). At the same time, resource-based analysis and value chain analysis reveal the following weaknesses of the company associated with its primary activities:
1) integration and empowerment of acquisitions
2) portfolio too large and complex
3) challenges at local markets
4) gum production integration issues
5) management missteps in emerging markets
1.2. Support activities
The group of support activities, according to value chain approach, includes management of materials, human resources, information systems and infrastructure (Ireland, Hitt & Hoskisson, 2007). Using the results of resource-based analysis, such strength as innovative selling technologies and environmentally effective technologies. The weaknesses related to support activities are rising costs of post retirement benefits (Yahoo Finance, 2012) and lack of synergy between different directions of production.