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Restructuring / Turnaround Strategies Case Study
Case Title:
Kraft Foods Spin-Off: Will it help its Turnaround?
Publication Year : 2007
Authors: Kirti Nair, Ruchi Mankad
Industry: Packaged-Food
Region: US Europe
Case Code: RTS0142A
Teaching Note: Not Available
Structured Assignment: Not Available
Abstract:
On June 26 2006, Kraft Foods Inc., (Kraft) the world’s second-largest consumer packaged-foods Company after Nestle announced the appointment of Irene Rosenfeld, as the new chief executive officer replacing Roger Deromedi. Irene previously was the chairman and chief executive officer at Frito-Lay, a division of PepsiCo.
On January 31 2007, Kraft’s parent and 88% stake owner Altria Group Inc., one of the world’s famous tobacco corporations, announced the long awaited spin-off of its subsidiary Kraft, which would be completed by March 30 2007. It was an initial step of on-going restructuring exercise for creating shareholder value. On February 20 2007,Kraft announced a new phase of its turnaround plan to revitalize its falling sales.
The case details about how Kraft will utilize its spin-off and various opportunities and challenges for a successful turnaround.
Pedagogical Objectives:
- To understand the corporate spin-offs and its impacts
- To study the challenges for a turnaround with new leadership
- To understand the corporate restructuring.
Keywords : Kraft Foods Inc.; Packaged food industry; Altria Group of Companies; Spin-off; Turnaround plan; Irene Rosenfeld; Roger Deromedi; Rrestructuring; Restructuring / Turnaround Strategies Case Study; Competitive strategies; managing brand portfolio; cost reduction; acquisitions; focused portfolio; declining financial performance
