- April 15, 2014
- Posted by: essay
- Category: Term paper writing
2.4. Acquisition-based resources
It is possible to identify a separate group of resources of Mondelez International Inc. related to acquisitions. The recent acquisition of Cadbury by Kraft Foods followed by the spin-off of Kraft Foods into Kraft Foods Group and Mondelez International Inc. significantly changed competitive profile of the company. The focus of Mondelez International Inc. is on confectionery industry (chocolate, coffee and snacks), and in this particular niche Mondelez International has only one comparable competitor ”“ Nestle.
3. Intangible resources
3.1. Technical resources
The company possesses a lot of unique technologies in food manufacturing, and it is a specific strength of Mondelez International. Biodegradable packaging, new and exciting product tastes and innovations in production lines aimed at optimization and cost effective production form a significant strength for Mondelez International.
3.2. Intellectual Resources
Product innovation is a specific strength of Mondelez International ”“ the company adopted the innovative capacity of Kraft Foods and Cadbury, and shared product innovation is a very powerful resource. Excellence centers located primarily in Europe help the company lead the way in confectionery industry.
According to the recent balance sheet statement of December 30, 2011, Mondelez International Inc. has goodwill equal to $39,297 million, which constitutes about 39.7% of total company’s assets (Yahoo Finance, 2012a). Such goodwill value is a huge strength for Mondelez International. Although the company’s goodwill has slightly decreased since 2010, the spin-off results are likely to have positive influence on goodwill. High brand awareness and brand loyalty are also important resources of Mondelez International.
3.4. Other resources
The expansion into developing countries (e.g. recent advancement to the markets of Brazil and Russia) is a resource with great potential. At the same time, there were certain executive missteps done during the process of expansion, which have slightly reduced the potential of this resource (Yahoo Finance, 2012c).
Geographical diversity of businesses of Mondelez International creates additional business stability for the company: slow growth or recession of one region can be compensated by the expansion in the other region (e.g. currently the lapse of growth at Russia and Brazil is compensated by high revenues from China and Middle East).
4. Distinctive capabilities
Distinctive capabilities are organizational resources which play a leading role in creating competitive advantages for the company. Three key characteristics of distinctive capabilities are sustainability of resource, resource appropriateness and resource uniqueness or high barriers to copying this resource (Ireland, Hitt & Hoskisson, 2007). Distinctive capabilities derive from three major areas: architecture, reputation and innovation (Henry, 2007).
From the perspective of architecture, Mondelez International has the following distinctive capabilities: broad network of suppliers and distributors, geographic diversity, broad range of products, acquisition integration and empowerment, and focus on particular food manufacturing niche (confectionery, snacks and beverages) where Mondelez International is the leader. With regard to reputation, it is possible to name the following distinctive capabilities: strong goodwill which constitutes a large part of overall assets, strong brand loyalty and brand awareness ”“ ownership of global power brands (Mondelez International, 2012b). From the point of view on innovations, Mondelez International Inc. creates a platform for leveraging of global innovation in key world regions (Mondelez International, 2012b), drives efficiency due to R&D capacity, and uses innovative technologies in selling.
Resource-based analysis of Mondelez International Inc. showed that the company has a large number of both tangible and intangible resources. The most important resources shaping distinctive capabilities of the company are physical resources, human resources, resources received as a result of acquisitions, goodwill and technical resources. Using the results of the analysis, distinctive capabilities of Mondelez International Inc. were identified in the area of architecture, reputation and innovation.