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Situation Analysis

Discuss about the Situation Analysis of Mondelez International.

The assignment is a study of the current situation of a company which can help in making recommendations about the company’s future. The company considered is Mondelez Internatioanl Australia and New Zealand. The assignment is divided into two main issues, the external analysis and internal analysis. The report answers the question regarding the business environment and competitive analysis of Mondelez. The scope of the assignment spans over the news paper articles, journals and magazines to draw the necessary matter. The external analysis section is divided into sections, the first is the macro environment trends while the second is a competitive analysis. The internal section delves into the aspects of Mondelez like financial strengths, human resource management and so on. The final section is the conclusion along with the recommendations for Mondelez.

Mondelez International Australia and New Zealand is the Australian arm of Mondelez International and is one of the largest manufacturers and marketers of food in Australia. The company has its headquarters in Melbourne and owns Vegemite and Cadbury. The company earned net revenue of $26 billion in 2016 (mondelezinternational.com, 2017). The annual report shows that Mondelez International has increasing rate of cumulative return in five years compared to its competitors as shown in the graph below.

The situation analysis of Mondelez International Australia and New Zealand is has two parts, the macroeconomic and the SWOT analysis. The purpose of the external market is to examine the external macro environment factors which determine the strategies of the international company. The purpose of the SWOT analysis is to study the strengths, weakneeses, opportunities and threats to the company in question.

Mondelez Internatioanl works in a variety of external macroeconomic environments which summarised as PESTLE below. These factors determine the competitive advantage of Mondelez International in respect to its competitors (Hautz, Mayer & Stadler, 2014).

The political factors refer to governments policies, laws, international agreements with countries and so on which play significant role in the company policies and strategies. Australia is a constitutional monarchy where the government controls and create trade barriers to promote domestic companies. However, the government has gradually started encourage entry of multinational companies like Mondelez. Mondelez should also abide by the free market and lower tariif policies and gain by it (aph.gov.au, 2017).

Economic factors consist of those factors which effect the financing and pricing decisions of the companies like Mondelez. These factors are exchange rate, labour rates, value of land, supply chain management and so on. The international currency rates have strong bearing on the pricing strategies of the companies. The value of Australian Dollar has fallen which means that exports have become cheaper and the foreigners customers can buy more with their currencies. The experts say that the Australian manufacturers like Mondelez can export their goods more to earns high return (Beattie, 2017). Mondelez International should acquire resources sustainably and keep the pricing strategy low to gain from exporting its products to the foreign markets (Brandenburg et al., 2014).

Evaluation of the Company’s Internal Capabilities and Core Competencies

The social aspects deal with the effect of a product on the society and culture of a  market like Australia. Mondelez International manufactures chocolate products with high calories which often face criticisms from various strata of the society. The Australians chocolate market is growing and Mondelez should capitalise the opportunity. The Australian society loves premium chocolate and is ready to pay high retail price for it. Hence, Mondelez should fix high retail prices for its premium chocolate products and low for regular products to generate high revenue (Nieburg, 2017). The Treasury, Government of Australia tells than the country has experienced sustainable income growth in the recent years and the rich have contributed large to the increase in national income. The growing population of the country along with the growing income encourage chocolate market (Australian Bureau of Statistics, Australian Government, 2017). Mondelez should market its products more in the Australia and take advantage of the rising income of the Australians to sell its products (Fletcher & Guttmann, 2017).

Technology refers to the level of innovation and research companies carry out to bring about new products and improve their existing products. The capacity of a company to utilise technology also determines its power to adopt sustainable means of production and operation. Mondelez is an international food manufacturer who is financially very strong and can invest in modern technology. Australia is a technologically strong country and provides its companies advanced technology and scope for innovation. The ever increasing demand and changing consumption pattern encourages modernisation and sustainable production.  The food product manufacturers like Mondelez have state of art technology which helps them to create sustainable products and packaging(Gold, Kunz & Reiner, 2016). Mondelez has six modern manufacturing plants in Australia which allows to company to bring about innovative products of superior quality (Lynch & Jin, 2016).

Culture of people has an important role to play in the consumption pattern which further impacts the demand of products. Religion, nationality, and so on play important role in the culture of people. Mondelez International manufactures chocolate products which are enjoyed by people of all cultures. The company markets its products internationally to take advantage of this demand for chocolate across cultures. The Australian people love chocolate products especially premium chocolate products. Mondelez should manufacture and market premium chocolate products and cater to the Australian market (Tan et al., 2015). The people of Australia are increasing emphasising on sustainable products and are ready to pay for them. Mondelez should market sustainable chocolate products to cater to the Australian market (Wee et al., 2014).

Conclusions

Macroenvironmental Factors

Issue

Opportunity or Threat identification

Information Source

Political/Legal

Free market and lower tariif policies

Opportunity

aph.gov.au, 2017

Economic

Falling Australian Dollar

Opportunity

Beattie, 2017

Social

Risisng demand for premium chocolate

Opportunity

Nieburg, 2017

Technological

New manufacturing plants and advanced technology

Opportunity

Lynch & Jin, 2016)

Culture

Love for premium chocolate products among the Australians

Opportunity

Tan et al., 2015

The graph shows that Cadbury by Mondelez leads the chocolate market of Australia with its two direct competitors Kit Kat by Nestle having 17% share and Mars at 9%. Their strength lies in their power to cater the needs of both the premium and low variant consumers. The two dimensions which consumers consider while making purchase are variety and available. The weakness of the competitors is their inability to produce a variety of chocolate products which Mondelez can produce.

The perceptual map below show the competitors of Mondelez International, the Y axis shows wide choice and the X axis shows variety. The figure shows that Mondelez International ranks highest in the consumer’s minds according to the two parameters.

  1. Mondelez International is a multinational company catering to global consumer base. The company is present in over a hundred countries which gives it a huge competitive advantage.
  2. Product line consists of a variety of premium products. The company manufactures Cadbury which comes in both premium variants like Bournville and low priced variants. The company also owns Vegemite, Ritz, Belvita and other brands worth billions.
  3. The company is financially strong with a net revenue $26 billion in 2016. The company has acquisitions like Cadbury worth billions of dollars which has given the company its innovative product line. The product line helps the company to form a strong marketing strategy. The company follows strategic human resource management in all the location it operates in.
  4. The company is an international employer and employs people all over the world. Mondelez International Australia employs more than 2000 employees who attribute tit with itstalent and competitive advantage.
  1. Comes under criticisms due to high calorie and sugar content in the products which affects the marketing strategies of the company.
  2. Product line limited to food products.
  1. Expand product line towards other products like home care, electronic and so on.
  2. Introduce low calorie products like Coca Cola.
  3. Enter into organic product market by new organic chocolate products.
  4. Enter new markets
  5. Faces stiff competition from substitutes like coffee.
  6. Fcaes stiff competition from other multinational companies like Nestle and Unilever.
  7. Faces threat from new entrants in all its markets like local chocolate companies.

Conclusions:

The study shows that Mondelez International Australia and New Zealand is a big multinational companies which encounters various macroeconomic factors like political, economical and so on. The company is financially very strong and has a very strong product line. The products of the company dominate the market but face stiff competition from other multinational food manufacturers like Nestle. The following recommendations can be made for the company’s future:

Mondelez should expand its product portfolio in order to gain more competitive advantage. This will generate more revenue and better the market position of the company.

The company should enter the market of the organic products and introduce organic chocolate products. This will help the company to attract more premium customers which will yield higher profit.

References:

2017 Fact Sheet. (2017). mondelezinternational.com. Retrieved 28 April 2017, from https://www.mondelezinternational.com/~/media/MondelezCorporate/Uploads/downloads/mondelez_intl_fact_sheet.pdf

Australian Bureau of Statistics, Australian Government. (2017). Abs.gov.au. Retrieved 28 April 2017, from https://www.abs.gov.au/

Beattie, D. (2017). The fall in the Aussie Dollar. Canstar. Retrieved 28 April 2017, from https://www.canstar.com.au/travel-credit-and-debit-cards/the-fall-in-the-aussie-dollar/

Brandenburg, M., Govindan, K., Sarkis, J., & Seuring, S. (2014). Quantitative models for sustainable supply chain management: Developments and directions. European Journal of Operational Research, 233(2), 299-312.

Cadbury Bournville | Cadbury.co.uk. (2017). com. Retrieved 28 April 2017, from https://www.cadbury.co.uk/products/Bournville-2400?p=2400

Fletcher, M., & Guttmann, B. (2017). Income inequality in Australia | The Treasury. Treasury.gov.au. Retrieved 28 April 2017, from https://www.treasury.gov.au/PublicationsAndMedia/Publications/2013/Economic-Roundup-Issue-2/Economic-Roundup/Income-inequality-in-Australia

Gold, S., Kunz, N., & Reiner, G. (2016). Sustainable global agrifood supply chains: exploring the barriers. Journal of Industrial Ecology.

Hautz, J., Mayer, M., & Stadler, C. (2014). Macro-competitive context and diversification: the impact of macroeconomic growth and foreign competition. Long Range Planning, 47(6), 337-352.

Industry Policy in Australia – Parliament of Australia. (2017). Aph.gov.au. Retrieved 28 April 2017, from https://www.aph.gov.au/About_Parliament/Parliamentary_Departments/Parliamentary_Library/pubs/rp/rp9900/2000RP03#Intro

Lynch, R., & Jin, Z. (2016). Exploring the institutional perspective on international business expansion: Towards a more detailed conceptual framework. Journal of Innovation & Knowledge, 1(2), 117-124.

More Aussies chomping on chocolate. (2017). Roy Morgan. Retrieved 28 April 2017, from https://www.roymorgan.com/findings/more-aussies-chomping-on-chocolate-201603212333

Nieburg, O. (2017). Social climbers: Aussies plump for premium chocolate. ConfectioneryNews.com. Retrieved 28 April 2017, from https://www.confectionerynews.com/Markets/Social-climbers-Aussies-plump-for-premium-chocolate

Tan, H. S. G., Fischer, A. R., Tinchan, P., Stieger, M., Steenbekkers, L. P. A., & van Trijp, H. C. (2015). Insects as food: exploring cultural exposure and individual experience as determinants of acceptance. Food Quality and Preference, 42, 78-89.

Wee, C. S., Ariff, M. S. B. M., Zakuan, N., Tajudin, M. N. M., Ismail, K., & Ishak, N. (2014). Consumers perception, purchase intention and actual purchase behavior of organic food products. Review of Integrative Business and Economics Research, 3(2), 378.

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