How Kraft Crafted a Comeback
When Irene Rosenfeld took the reins at Kraft Foods in 2006, she found a company weakened by excessive cost cutting and a hidebound, inward-facing management structure. She wanted to move decision-making closer to Kraft’s individual business units and their customers, but that meant she would have to make wholesale changes. Here are the lessons that apply not only to her business but yours: Get the facts. Get real. Get holistic. Get your people involved. Get the incentives right. Get local. And get organized.
In the beginning, it was all about cheese, sold door-to-door in Chicago from a horse-drawn wagon operated by one James Lewis Kraft, a.k.a. J.L. Kraft. That was in 1903, and by 1914 his company was selling 31 kinds of cheese all around the country. As of the 1930s, the cheese no longer stood alone--salad dressing, ice cream, and margarine products were added to the Kraft cabinet of brands. And through a series of mergers and acquisition, the company was transformed over the following four decades into a global powerhouse. Then, in 1988, Philip Morris came calling.
The tobacco giant, its internal growth stifled, had begun to compensate by way of acquisition. It had bought General Foods three years earlier, and now it paid $12.9 billion to take over Kraft. In 2000 it purchased Nabisco and merged it with Kraft, and by 2003, when Philip Morris renamed itself Altria, the company had put together a major food conglomerate under the Kraft label.
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