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Executive Summary

Final stage of strategic analysis includes identification of the generic strategy pursued by

the target company, identification of strategic choices performed by the company and analysis of

the alignment between genic strategy, strategic choices and SWOT variables. The goal of the

report was to perform such analysis for Mondelez International Inc. and to generate

recommendations for the strategic choices as well as for the mission, vision and goals of the

company. Strategy analysis showed that mondelez International pursued the strategy of

differentiation. Consideration of strategic choices applied to SWOT variables revealed two

strengths, two weaknesses, two opportunities and one threat which were not addressed by the

strategic choices of Mondelez International Inc. Basing on these data, recommendations for

altering strategic choices were generated for Mondelez International and recommendations

towards formulating clear mission and vision were also provided.

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I. Introduction

The Mondelez Philippines, Inc.’s (MPI) was established in 1963, manufacturing

operations began two years later in 1965 inSucat, Paranaque City where its offices and

cheese and grocery manufacturing plant are located. MPI holds strong leadership positions

in the process cheese market (block and cheese spread) and powder beverages. It has also

gained strong positions in biscuit and imported chocolates.

Formerly called Kraft Foods, Mondelez Philippines changed its name in 2013 due to a

global spit of the entire Kraft Foods company. This resulted in two companies, a North

American grocery business which retained the name and global snacks powerhouse

called Mondelẽz International, of which Philippines is part of.

MPI manufactures and carries a number of iconic brands. Under the Cheese and

Groceries Category (locally manufactured); Eden cheese, Cheez Whiz, Eden Mayo and

Eden sandwich spread and Magic Whirl.

Imported brands include Powder beverages: Tang. For snacks/Confectionary: Tiger

Energy Biscuits, Oreo, Chips Ahoy!, Toblerone, and Cadbury Dairy Milk chocolates, and

Halls candies. Another brand being sold in the Philippines is Calumet Baking Powder.

Mondelez Philippines has around 450 permanent employees in its Sucat offices and

manufacturing point.

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MPI is committed to empowering people with healthy habits that leads to holistic

wellbeing. Its Joy Schools program is a three-year commitment to create delicious

moments of joy for the community through programs for nutrition and education. A 9-

month feeding program provides fresh food for undernourished students. Teacher training

makes teachers able partners in harvesting joy. Improvement of the school environment is

complemented by nutrition education for parents and students, and promotion of active

play.

MPI ensures that it has programs that address the problems of today and make a

difference for tomorrow. Most notable is the ‘Go Green’ program, which aims to reduce

the Company’s use of water and energy, and its waste.

Employees of MPI have a strong sense of volunteerism and regularly participate in the

Company’s community activities.

Our board

The composition of the Board taken as a whole enables the Board to represent effectively

all shareholders. All directors have the personal attributes including integrity, sound business

judgment and vision necessary to establish a competent, ethical and well-functioning board.

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Competencies and demographics

The individual directors have a variety of backgrounds and experiences that provide the

Board with the key competencies needed for the Board to fulfill its current and future

obligations. The Governance Committee works with the Board to determine the appropriate mix

of competencies that will result in a Board that is strong in its collective knowledge, enabling the

Board to fulfill its responsibilities and best perpetuate the Company’s long-term success and

represent all shareholders’ interests. Based upon its discussions with the Board, the Governance

Committee has identified these key competencies that are particularly desirable in order for the

Board to fulfill its current and future obligations:

 Industry Knowledge

 Significant Operating Experience

 Leadership Experience

 Substantial Global Business and other International Experience

 Accounting and Financial Expertise

 Product Development and Marketing Experience

 Public Company Board and Corporate Governance Experience

 Academic and Research Experience

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Dirk Van de Put Charles E. Bunch

Chairman and Chief Executive Officer Retired, Chairman and CEO
Mondelēz International, Inc. PPG Industries, Inc.

Lewis W.K. Booth

Retired Executive Vice President and Debra A. Crew
Chief Financial Officer Former President and
Ford Motor Company Chief Executive Officer
Reynolds American Inc.
British American Tobacco P.L.C.

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Lois D. Juliber Peter W. May

Retired Vice Chairman and President and Founding Partner
Chief Operating Officer Trian Fund Management, L.P.
Colgate-Palmolive Company

Jorge S. Mesquita
Mark D. Ketchum Executive Vice President
Retired President and Worldwide Chairman, Consumer
Chief Executive Officer Johnson & Johnson
Newell Rubbermaid Inc.

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Joseph Neubauer Christiana Shi

Retired Chairman of the Board Former President
Aramark Holdings Corporation Direct-to-Consumer
Nike, Inc.

Fredric G. Reynolds Patrick T. Siewert

Retired Executive Vice President and Managing Director
Chief Financial Officer The Carlyle Group
CBS Corporation

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Jean-Francois M. L. van Boxmeer

Chairman of the Executive Board and Chief Executive Officer

Heineken N.V.

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I.Research design and Methodology

The data used in this research came from various internet source, journals,

newsletters, news article, blogs, book, law books, and different sites. And some

information from their home page which is the ph.mondelezinternational.com

Most of the data used are from the site of the company that are visible.

II.Company’s Mission and Vision

Our dream

Our dream is to create more moments of joy – and that’s exactly what our tasty

products do. They give that joyful moment just for you.

Our Belief

We’re a big company. But we believe, above all, in one thing – something that’s

unique to us – and that’s the power of Big and small. Yes, we have the scale and

resources of a global powerhouse. But also the speed, creativity and agility of a fresh new

start-up.

Our Values

Our seven values provide the foundation for our Company and guide everything

we do:

We believe there’s big value in every human connection and in every bond… especially

when times get tough.

So we…INSPIRE TRUST

We believe that it’s up to each of us to do what it takes to drive growth.

So we…ACT LIKE OWNERS

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We believe that complexity crushes the human spirit and that simplicity is the essence of

speed.

So we…KEEP IT SIMPLE

We believe we can’t wait for it to happen: we’ve got to make it happen… now.

So we…DISCUSS DECIDE DELIVER

We believe honest discussions and direct feedback are essential to making the right

decisions, quickly.

So we...TELL IT LIKE IT IS

We believe in the power of different perspectives and in daring to try new ways.

So we are…OPEN AND INCLUSIVE

We believe that what makes our workplace great is passion and personality.

So we… LEAD FROM THE HEAD AND THE HEART

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III.External Analysis

Opportunities

 The new technology provides an opportunity to Mondelez International to

practices differentiated pricing strategy in the new market. It will enable the firm

to maintain its loyal customers with great service and lure new customers through

other value-oriented propositions.

 Decreasing costs of transportation because of lower shipping prices can

also bring down the cost of Mondelez International’s products thus providing an

opportunity to the company – either to boost its profitability or pass on the

benefits to the customers to gain market share.

 New trends in the consumer behavior can open up new market for the

Mondelez International. It provides a great opportunity for the organization to

build ne revenue streams and diversify into new product categories too.

 Stables free cash flow provides opportunity to invest in adjacent product

segmentswhich more cash in bank the company can invest in new technologies as

well as in new products segments. This should open a window of opportunity for

Mondelez International in other product categories.

 New customers from online channel - Over the past few years the

company has invested vast sum of money into the online platform. This

investment has opened new sales channel for Mondelez International. In the next

few years the company can leverage this opportunity by knowing its customer

better and serving their needs using big data analytics.

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 The new taxation policy can significantly impact the way of doing

business and can open new opportunity for established players such as Mondelez

International to increase its profitability.

 Organization’s core competencies can be a success in similar another

products field. A comparative example could be – GE healthcare research helped

it in developing better Oil drilling machines.

 Opening of new markets because of government agreement – the adoption

of new technology standard and government free trade agreement has provided

Mondelez International an opportunity to enter a new emerging market.

Threats

 New technologies developed by the competitor or market disruptor could

be a serious threat to the industry in the medium to long term future.

 Growing strengths of local distributors also presents a threat in some

markets as the competition is paying higher margins to the local distributors.

 As the company is operating in numerous countries it is exposed to

currency fluctuations especially given the volatile political climate in number of

markets across the world.

 Changing consumer buying behavior from online channel could be a threat

to the existing physical infrastructure driven supply chain model.

 Imitation of the counterfeit and low product is also a threat to Mondelez

International’s product especially in emerging markets and low-income markets.

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 Rising raw material can pose a threat to the Mondelez International

profitability.

 The company can face lawsuits in various markets given – different laws

and continuous fluctuations regarding product standard in those markets.

 New environment regulations under Paris agreement (2016) could be a

threat to certain existing product categories.

IV.InternalAnalysis

Sales

(1) The selected financial data should be read in conjunction with Management’s Discussion

and Analysis of Financial Condition and Results of Operations and our consolidated

financial statements and related notes included elsewhere in this Annual Report on Form 10-

K and Annual Reports on Form 10-K for earlier periods. A significant portion of our

business is exposed to currency exchange rate fluctuation as a large portion of our assets,

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liabilities, revenue and expenses must be translated into U.S. dollars for reporting purposes.

Refer to Management’s Discussion and Analysis of Financial Condition and Results of

Operations for a discussion of operating results on a constant currency basis where noted.

(2) Significant items impacting the comparability of our results from continuing operations

include: Spin-Off Costs in 2013-2014; restructuring programs in 2013-2017; cost savings

initiatives in 2013; the contribution of our global coffee businesses and investment in JDE

and related gain in 2015; gain on equity method investment transactions in 2016-2017; other

divestitures and sales of property in 2013 and 2015-2017; acquisitions in 2013 and 2015-

2016; the Cadbury acquisition-related Integration Program in 2013-2014; the benefit from

the Cadbury acquisition-related indemnification resolution in 2013; losses on debt

extinguishment in 2013-2017; unrealized gains on the coffee business transaction currency

hedges in 2014-2015; debt tender offers completed in 2013-2016; loss on deconsolidation of

Venezuela in 2015; the remeasurement of net monetary assets in Venezuela in 2013-2015;

accounting calendar changes in 2013 and 2015; impairment charges related to intangible

assets in 2014-2017; losses related to interest rate swaps in 2015-2016; benefits from the

resolution of tax matters in 2017; CEO transition remuneration in 2017; malware incident

incremental expenses in 2017; and our provision for income taxes in all years, including the

U.S. tax reform discrete net tax benefit in 2017. Please refer to Notes 1, Summary of

Significant Accounting Policies; 2, Divestitures and Acquisitions; 5, Goodwill and

Intangible Assets; 6, 2014-2018 Restructuring Program; 7, Debt and Borrowing

Arrangements; 8, Financial Instruments; 12, Commitments and Contingencies; 14, Income

Taxes; and 16, Segment Reporting, for additional information regarding items affecting

comparability of our results from continuing operations. (3) Items impacting comparability

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primarily relate to the Keurig and JDE coffee business transactions in 2014-2016, the loss on

deconsolidation of Venezuela in 2015 and the receipt of net cash proceeds from the

resolution of the Starbucks arbitration in 2013. Refer to the Annual Report on Form 10-K

for the year ended December 31, 2015, for additional information on the resolution of the

Starbucks arbitration in 2013. Beginning in 2015, debt issuance costs related to recognized

debt liabilities were recorded as a deduction from the related debt obligations instead of as

long-term other assets on the consolidated balance sheet. We made this reclassification in

the prior periods presented for consistency. (4) Refer to Note 11, Capital Stock, for

additional information on our share repurchase program in 2013-2017. (5) Refer to the

Equity and Dividends section within Management’s Discussion and Analysis of Financial

Condition and Results of Operations for information on our dividends.

Strengths

 Automation of activities brought consistency of quality to Mondelez International

products and has enabled the company to scale up and scale down based on the demand

conditions in the market.

 Successful track record of developing new products – product innovation.

 Superb Performance in New Markets – Mondelez International has built expertise at

entering new markets and making success of them. The expansion has helped the organization to

build new revenue stream and diversify the economic cycle risk in the markets it operates in.

 Highly skilled workforce through successful training and learning programs. Mondelez

International is investing huge resources in training and development of its employees resulting

in a workforce that is not only highly skilled but also motivated to achieve more.

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 Successful track record of integrating complimentary firms through mergers &

acquisition. It has successfully integrated number of technology companies in the past few years

to streamline its operations and to build a reliable supply chain.

 Strong dealer community – It has built a culture among distributor & dealers where the

dealers not only promote company’s products but also invest in training the sales team to explain

to the customer how he/she can extract the maximum benefits out of the products.

 Strong Brand Portfolio – Over the years Mondelez International has invested in building

a strong brand portfolio. The SWOT analysis of Mondelez International just underlines this fact.

This brand portfolio can be extremely useful if the organization wants to expand into new

product categories.

 High level of customer satisfaction – the company with its dedicated customer

relationship management department has able to achieve a high level of customer satisfaction

among present customers and good brand equity among the potential customers.

Weaknesses

 There are gaps in the product range sold by the company. This lack of choice can

give a new competitor a foothold in the market.

 Organization structure is only compatible with present business model thus

limiting expansion in adjacent product segments.

 Days inventory is high compare to the competitors – making the company raise

more capital to invest in the channel. This can impact the long term growth of

Mondelez International

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 High attrition rate in work force – compare to other organizations in the industry

Mondelez International has a higher attrition rate and have to spend a lot more

compare to its competitors on training and development of its employees.

 Investment in Research and Development is below the fastest growing players in

the industry. Even though Mondelez International is spending above the industry

average on Research and Development, it has not been able to compete with the

leading players in the industry in terms of innovation. It has come across as a

mature firm looking forward to bring out products based on tested features in the

market.

 Financial planning is not done properly and efficiently. The current asset ratio and

liquid asset ratios suggest that the company can use the cash more efficiently than

what it is doing at present.

 The marketing of the products left a lot to be desired. Even though the product is

a success in terms of sale but its positioning and unique selling proposition is not

clearly defined which can lead to the attacks in this segment from the competitors.

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V.Strategy Formulation

STRENGHTS WEAKNESSES

 Dominant Brands: Aside from  Uneven Execution: While

the nine billion-dollar brands Mondelez has a fine management

mentioned earlier, Mondelez’s team headed by CEO Irene

product portfolio consists of 53 Rosenfeld, execution has not

other labels that each generate been great since the company

annual revenues of more than spun out its North American

$100 million. The company’s grocery division. In particular,

market dominance appears Mondelez has been hampered by

unlikely to slip, either, given the capacity constraints in certain

company’s emphasis on overseas markets, such as India.

innovation -- it routinely Pricing missteps, most notably in

modifies core products when it Brazil and Russia, have also been

sells them overseas, so as to something of a problem. Indeed,

make them better fit local tastes - in some cases, they enabled low-

- and distribution growth. cost rivals to steal business.

 Attractive Categories: Snacks,  Falling Gum Sales: The gum

including cookies, chocolate, segment, which together with

gum, and candy, is among the candy accounts for roughly 15%

fastest-growing categories in the of the sales mix, has been a

otherwise-sluggish packaged persistent weak spot for

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food industry, notwithstanding Mondelez, with the company

the recent slowdown. experiencing big volume declines

Additionally, it appears to be a on both sides of the Atlantic.

bit more resilient than other food Furthermore, while declines

niches, since snack items are appear to be diminishing, it is

often last-minute impulse unclear when efforts to reverse

purchases. This suggests that the market-share losses will begin to

snack category can grow in the pay off.

mid-single digits over the long

run, even without a blistering hot

global economy.

 Robust Free Cash Flow: This,

along with a sound balance sheet,

should enable Mondelez to

reduce its debt-to-capital ratio,

repurchase stock, and continue to

pay a modest dividend. (The

yield tends to hover around

1.5%.) Bolt-on acquisitions are

also likely

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OPPORTUNITIES THREATS

 Emerging Markets: About 40%  Commodity Pressures: Rising

of the top line comes from input costs are a threat to

developing markets, which puts Mondelez, as they are to most

Mondelez on par with food processors. One potential

multinational behemoths headwind worth watching is

like The Coca-Cola Company coffee prices, which appear set to

(KO - Free Coca-Cola Stock rise significantly because of

Report). Moreover, the snack drought and fungus in Brazil and

maker continues to invest heavily large coffee-producing countries.

abroad, with the goal of (The tough climate conditions

leveraging its leading brands in have taken a big toll on this

countries where powerful, long- year’s harvest.) The higher bean

term macroeconomic tailwinds prices could weigh on margins if

are in place. Just last year, the they are not effectively passed

company outlined big along to consumers.

investments in the BRIC nations:  Low-Cost Rivals: Price

it announced plans to expand a competition from smaller,

chocolate factory in Brazil; it regional brands and/or private

committed over $70 million to labels is always a cause for

increase gum production in concern for market leaders like

Russia; it pledged more than Mondelez. Thus, it is important

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$190 million to build a new for the company to stay

multicategory manufacturing innovative, carefully manage

plant in Sri City, India; and it price gaps, and maintain a robust

indicated it would spend $85 advertising budget. Otherwise,

million to enlarge a key biscuit share erosion may emerge, as it

facility in China. These efforts has, from time to time, in less-

should translate to greater sales stable international markets.

in the important BRIC

geographies as we head toward

late decade. Today, BRIC sales

account for about 15% of the

revenue mix.

 Cost Cutting: Mondelez, more

focused on margins these days

against a slower sales backdrop,

still has lots of opportunities to

save money by controlling

overhead expenses and boosting

efficiencies. In fact, the

company, already garnering

savings from manufacturing

upgrades and a redesign of the

supply chain that is expected to

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make it more competitive in the

U.S. and Europe, recently

outlined an incremental

restructuring plan that will likely

yield an extra $1.5 billion-plus in

annual savings through the 2017-

2019 time frame. The program

also aims to boost annual

productivity savings to 3% of

COGS (cost of goods sold)

within the next few years, which

should support our view that

share net will exceed $2.50 by

late decade. The $2.50-a-share

bottom-line target is

conservative, we believe, given

the powerful operating leverage

that will probably materialize

once revenue growth picks up

again.

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Conclusion

In sum, we think that the positives well outweigh the negatives here. Though the top line has

weakened this year, we expect healthy organic growth to return before too long, as Mondelez

makes the most of its snacks dominance and vast presence in developing nations. In the

meantime, margin expansion ought to lift profits, as the company steps up its restructuring

efforts. And shareholder value will likely be enhanced by capital returns (dividends and stock

buybacks) and strategic actions on the M&A front.

The issue is best suited for defensive-minded, longer-term investors looking for a little

growth and a small income stream. While not cheap at the current quotation, the quality

stock should provide decent risk-adjusted returns through the 2017-2019 period.

VI.Recommendation

Product. Their product must be affordable by their consumers and it has a unique and

quality taste. They need to develop their product and make some twist.

Employers. Giving care for their employees, it’s important to give concern for them.

They need to add more employees, to achieve that product that they want to do.

Market. Increasing market presence with the help of collaboration or acquisitions of

smaller local companies operating in the similar market segments.

Investors. More investing to come with their company.

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