Mgt599 Case 3 Essay

1066 Words May 12th, 2013 5 Pages
TRIDENT UNIVERSITY

Jonathan M. McClure

Module Two SLP

MGT599 - Strategic Management

Dr. Carr Oduro

February 20, 2013

INTRODUCTION

Once a firm determines its corporate level strategy, it must decide on its business level strategy. An international firm must decide on only what business level strategy it wants in one market but also whether it wants to have the same business level strategy for each country in which it competes or whether to give its managers in other countries the responsibility for creating their own business strategies.

KRAFT FOOD SPLIT

In the summer of 2011, corporate giant Kraft Foods surprised Wall Street by announcing that it would split itself in two. One company, which would keep the current moniker,
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Additionally, as the forecast is passed on in the supply chain, it propagates with increased volatility— a phenomenon popularized as the “bullwhip effect” or the “Forrester fly-wheel effect” (Ganeshan and Boone, 2001).

VMI (Vendor Managed Inventory) is a technique where a supplier is empowered to manage inventories of agreed-upon items at distributor or retailer locations. VMI is now a widely practiced initiative in the retail industry. Manufacturers like Kraft Foods, Procter and Gamble, Xilinx and their distributors, and retailers like Wal-Mart have well-developed VMI systems (Ganeshan and Boone, 2001). VMI has the following potential benefits: (1) Improved customer service, (2) reduced inventory, (3) reduced uncertainty for the supplier, and (4) reduced administrative costs.

Kraft Foods recognizes that an accurate demand plan is the key for the manufacturers (and suppliers of the manufacturers) to realize the benefits of supply chain collaboration. And they are increasingly dependent on consumer demand information communicated by their retailers to develop the most accurate demand plan possible (Ireland, 2004). A great example of how hundreds of manufacturers are quickly realizing the importance of supply chain collaboration and the value of retailer demand information is the building boom going on in

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