In September 2009, Kraft, American company, represented by Irene Rosenfeld (CEO) made an offer to Roger Carr (Chairman of Cadbury) in order to acquire the English company, Cadbury. Carr did not even consider the offer once they heard the amount. It took almost two years to finish the acquisition and several modifications were made to the offer.
Many factors and players were involved in the negotiation; these all influenced the final decision.
– What’s the problem (quadrant I)?
• What’s wrong?
The North-American (USA) brand Kraft looking forward to increasing their international expansion (strategic growth) and positioning made an offer to the English confectionery Cadbury with the intention of acquire it.
• What are current symptoms?
Kraft has 60% of the matured market in the US just with only two of its very famous products: Philadelphia cream-cheese and Oreo’s cookies.
Cadbury has a strong presence in growing markets such as India and Latin America.
By making this deal, Kraft not only remains being as strong as it is in the US market but it is also growing in other markets with a well-known company, increasing its production capacity and and brand building capability, which secures its revenues for a long time and increasing its competitive power, its positioning in the international market and winning market share.
The acquisition of Cadbury has more value for Kraft than the potential outcome it has for the counterpart. Cadbury chooses the hard bargaining way because of its position, making the process a little bit hostile and a bit long while a final decision is made.
At that time Cadbury was not even on sale, which of course meant that Kraft had to be the first one in bringing up the
• How are disliked facts contrasting ...
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...ed in any type of negotiation media is very involved and it gets a big role in the game, as it will always release and filter information that is not always necessarily true, having said this, it is important to trust and have effective communication with the counterpart to avoid any sort of misunderstandings.
I believe both companies had placed their interests at first, if Cadbury’s board would have been more interested in preserving the identity of the company rather than making money, then there would have been no place for a deal. Naturally, it was Kraft’s interest to purchase a company which was certainly promising to continue being successful and productive.
I consider this was a win-win situation, the old board of Cadbury got what they wanted, a fair price for their shares, and regarding Kraft, having purchased the world’s largest confectionery, was a deal.
Kraft Mac n' Cheese is just the best it gets. Kraft is the Star of the food aisle in target because it's just good. Kraft has a bigger appeal to children, and the boxes make children want to say "mommy can we put this in the cart". Kraft has a good way, making itself look better with advertising. Kraft Macaroni is so good that they even have statutes of the noodles.
“His decision to focus on the production of the Hershey milk chocolate bar is now hailed as one of the most important decisions in the history of American business” (Milton Hershey 1). Certain aspects of Milton Hershey’s life are impossible to not take notice of. A simple chocolate bar completely changed the world of business, Milton S. Hershey impacted the world in a huge way.
Hershey is a widely respected brand name and as a fact is the largest producer of quality chocolate in North America and considered as global leader in chocolate and sugar confectionery. With history dating to 18th century, Hershey competes with Nestle and Cadbury to dominate global confectionary business. The main product lines include chocolate and confectionery products; food and beverage enhancers, such as baking ingredients, toppings and beverages; and gum and mint refreshment products. Corporate strategy of Hershey is focused to deliver growth and capitalize by diversifying its brand in the global market.
...during the negotiation. Because they did not explicitly articulate their objectives to each other, the union and management did not reach a settlement that was mutually beneficial. I believe both teams prioritized “winning” over fulfilling their initial objectives. Therefore, I better understood how both teams suffered under pressure during the negotiation because they realized they could no longer rely on a zero-sum strategy. Moreover, I realized how important team cohesiveness is to the bargaining process. Both the union and management lacked basic cohesiveness among their team members and consequently exacerbated the contentious and emotional environment that they created during the negotiation. Nevertheless, under these circumstances I believe the union and management ultimately reached an adequate proposal that satisfied both sides of the bargaining table.
Hershey recently sued Let’s Buy British Imports or L.B.B., a british chocolate company to stop the imports of their chocolates into the United States. The Hershey company claimed that L.B.B.’s product resembled theirs: “This includes Cadbury chocolates, KitKat bars made in Britain, Toffee Crisps and Yorkie chocolate bars”. Jeff Beckman, the Hershey Company’s spokesman stated that “It is important for Hershey to protect its trademark rights and to prevent consumers from being confused or misled when they see a product name or product package that is confusingly similar to a Hershey name or trade dress” This lawsuit has made chocolate consumers immensely unhappy. Nicky Perry, one of the most vocal about this ban stated the following: “Due to legal action by the so-called chocolate maker Hersheys, we can no longer import the real Cadbury chocolate from England...They want us to sell their dreadful Cadbury approximation but we can 't in good conscience sell you such awful chocolate when we have made our reputation on selling you the yummy real English stuff." Many chocolate lovers reacted similarly to this
Kraft, who owns Oreo cookies, learned from their mistakes. When they entered into India’s biscuit (cookie) market, the organization expected to change the flavor, price, and shape. Kraft also capitalized on existing distribution networks, by acquiring
Lewicki, R. J., Saunders, D. M., & Barry, B. (2010). Negotiation: Readings, exercises, and cases. New York: McGraw-Hill Irwin
This case examines issues of asset control for Ben & Jerry’s Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer‘s Grand, Unilever, and Meadowbrook Lane Capital in January 2000.
Lewicki, R., Saunders, D.M., Barry B., (2010) Negotiation: Readings, Exercises, and Cases. 6th Ed. McGraw-Hill Irwin. New York, NY
Between the Cadbury being successful in overpowering the Fry’s, and being the business they are today, Cadbury gained a couple more competitors in the industry. Three of which include Nestle, Mars, and Hershey. Hershey, much like Cadbury, started out in a failing candy business, however Hershey was settled in Philadelphia. Milton Hershey showed interest in candy making and started up his business. Much like Cadbury, Hershey’s candy store was not successful, and contrary to Cadbury, Milton’s business nearly ruined him, while taking away his money. In the process of recovering, Milton decided to live with is business driven father, Henry. From there, Milton created the Hershey company that soon became a company to fear towards the Cadburys. Coming
Mondelez has launched “Cadbury Cocolicious” - a tasty milk chocolate bar with roasted coconut filling, which combines a favourite and abundantly available ‘coconut’ with its trademark ‘milk chocolate’.
The company’s name got changed in 1968 to Hershey Food Corporation and it expanded its operations with different product lines, in addition to this, the company acquired other companies that manufactured similar products. The company is currently the leader in production of both non-chocolate and chocolate confectionery products all over North America. The company’s products are known and enjoyed in several countries around the world; the company is still committed to its vision and values and it continues to produce new products.
Lewicki, R. J., Barry, B., & Saunders, D. M. (2007). Essentials of Negotiation. New York: McGraw-Hill/ Irwin.
In order to be effective, the company needs to honestly evaluate their current position within the market. Had Kraft completed and effective SWOT analysis, they would have likely realized that while they have a strength in distribution, manufacturing, and marketing, one of their singular weaknesses outweighed those positives. The main weakness facing Kraft in both China and India, was the simple fact that the consumers in that market simply did not like the taste of the cookie, and in China, the consumers were never known to be avid cookie eaters (Jain, Jose, & Koellmann, 2013). This miscalculation on the part of Kraft, nearly tanked the rollout of the
However, after large amounts of pressure from environmentalists, households and then businesses refusing to stock Cadburys chocolate, Cadburys finally conceded and moved back to the old recipe. The marketing director Matthew Oldham said, ‘At the time, we genuinely believed we were making the right decision, for the right reasons. But we got it wrong. Now we 're putting things right as soon as we possibly can, and hope Kiwis will forgive us’ (CHECK WHEN HE SAID THIS)