Case Analysis - Kraft Foods Oreo and China - Free Essay Example

Case Analysis Kraft Foods Oreo and China Case Analysis In order for a business to be successful in another country besides the country that their business is based out of, a business must understand the market conditions of the particular country they are looking at investing their products in. A market conditions that a business must consider when making a move to another country includes that of how well their product will do in another country. If a business has not fully analyzed this concept, then their product may not do as well as they hoped for in that particular country and in all will have an effect on the overall revenue for the business. In this particular assignment, I will analyze the case of the Oreo cookie manufactured by Kraft Foods and it acceptance into the country of China. The case analysis of the Oreo cookie manufactured by Kraft Foods and it acceptance into the country of China will include a summary of the basic situation described in the case, a discussion of Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢ market, a discussion of the changes in Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s marketplace over the last 20-30 years, an explanation of the efforts by Kraft Foods to enter Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s marketplace, and a discussion of the important factors that make entry into Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s marketplace challenging and potentially risky for Kraft Foods. Basic Situation Kraft Foods is one of the world leaders in the production of beverages, snack foods, dairy products, and food (Kraft Foods, 2011). Kraft Foods began its company in the year of 1903 in Chicago, Illinois (Kraft Foods, 2011). Kraft Foods has expanded its business from Chicago to New York to international over the year which has contributed much to the success of their business (Kraft Foods, 2011). Kraft Foods began the manufacturing of the Oreo cookie in 1912 (Clement, S., Jain, T., Jose, S., Koellmann, B, 2013). The basic situation in the case of the Oreo cookie manufactured by Kraft Foods and it acceptance into the country of China is how Kraft Foods did not anticipate the acceptance of their Oreo cookie in China to be unfavorable. Kraft Foods only marketed their Oreo cookie in the United States until the year of 1996 (Clement, S., Jain, T., Jose, S., Koellmann, B, 2013). In the year of 1996, Kraft Foods decided to market their Oreo cookie globally starting in China (Clement, S., Jain, T., Jose, S., Koellmann, B, 2013, para 3). However, Kraft Foods discovered that over the last 10 years, their Oreo cookie was not as favorable in China as it was in the United States (Clement, S., Jain, T., Jose, S., Koellmann, B., 2013, para 4). The cause of this unfavorable accpetance of Kraft Foods Oreo cookie in China was mainly due to the business strategy of Kraft Foods. Kraft Foods decided it would be acceptable if they used the business strategy of their Oreo cookie just like what they used in the United States. However, this business strategy was not as successful as Kraft Foods would have hoped it would be. The business strategy of Kraft Foods and their Oreo cookie in the United States was that of a sweet and bitter cookie which was not accepted well in China (Clement, S., Jain, T., Jose, S., Koellmann, B., 2013, para 6). In addition to the Oreo cookie being to sweet and bitter for China, the price for a package of Oreo cookies was high which was not accpeted by China (Clement, S., Jain, T., Jose, S., Koellmann, B., 2013, para 7). This led to Kraft Foods evaluating how it could change their business strategy to adapt to the needs of China. After evaluating the Oreo cookie to the needs of China, Kraft Foods discovered that t he Oreo cookie needed to make the Oreo cookie to contain more chocolate and less sugar in the cream filling (Clement, S., Jain, T., Jose, S., Koellmann, B., 2013, para 8). Kraft Foods also found that they needed to make the pricing of a package of Oreo cookies more reasonable to the Chinese market. Kraft Foods reduced their pricing of their Oreo cookie packages to $0.29 with less cookies in the package which is more sutiable for the needs of Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s people (Clement, S., Jain, T., Jose, S., Koellmann, B., 2013, para 8). With these adjustments to Kraft Foods Oreo cookie, may the acceptance of the Oreo cookie more favorable in China. Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s Market It is essential for Kraft Foods to understand the market and retail market for cookies in China prior to conducting business in their country. However, Kraft Foods went into China with a mindset that their Oreo cookie would be well accepted without any modifications to their market and retail strategy. Soon Kraft Foods discovered that this was not the case and needed to make adjustments to their market and retail strategy in order for their Oreo cookie to be successful in China. The United States market for cookies is favorable whereas in China it is in the middle. The people of the United States typically like their cookies more sweet and bitter whereas in China they do not care for that type of cookie. In order for the Oreo cookie to be as successful in China as it was in the United States, Kraft Foods needed to evaluate the flavor and type of cookies that the people of China cared for in which Kraft Foods complied too. In addition to evaluating the flavor and type of cookie the people of China cared for, Kraft Foods needed to evaluate the packaging and pricing of their Oreo cookies to meet the needs of the people of China. After evaluating the needs of the people in China for the packaging and pricing of their cookies, Kraft Foods discovered that they needed to reduce the a mount of cookies in a package as well as reduce the price for a package of cookies. Once Kraft Foods was able to make these adjustments to their Oreo cookies to meet the needs of the people of China, then the acceptance and sales of the Oreo cookie increased in China. The market and retail market of cookies in China was quite different than that of the United States which Kraft Foods was not prepared for. In the United States, the Oreo cookie is more accepted as a sweet and bitter cookie instead of more chocolate and less sugar in the cream type of cookie in which the people of China prefer. In addition to the type of cookie preferred, Kraft Foods is able to package more cookies in a package and charge more for the package compared to that of China. Once Kraft Foods was aware of these differences between the United States preference in an Oreo cookie and that of the preference of the Oreo cookie in China, Kraft Foods was able to bounce back from their poor acceptance of their Ore o cookie in China. Changes in Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s Marketplace Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s marketplace has increased over the last 20-30 years which has led to an increasing economy for China. Changes to laws and regulations by the Chinese government as well as changing their economy to more of a free market are what have contributed to the increase in Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s marketplace over the last 20-30 years (Berry, 2010, p.5, para 1). China is considered an agricultural country in which it is expected to lead the world in agricultural in the next 10 to 20 years (Berry, 2010, p. 3, para 1). The agricultural goods that China is known for include that of tea, potatoes, rice, peanuts, wheat, cotton, millet, apples, oilseed, barley, fish, cotton, and pork (Berry, 2010, p. 16, para 4). In potato production and consumer, China is the world leader (Berry, 2010, p. 16, para 4). Efforts by Kraft Foods to Enter Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s Marketplace Kraft Foods decided to enter Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s marketplace with no modifications to their Oreo cookie. Kraft Foods learned that this was not the ideal approach in making no modifications to their Oreo cookie for the Chinese market. Kraft Foods discovered not only did they need to make the Oreo cookie with more chocolate and less sugar cream to meet the needs cookie needs for the people of China but also later discovered additional modifications needed for their Oreo cookie (Jargan, 2008). Kraft Foods decided to tailor the Oreo cookie to meet the needs of the people of China a step further. In 2006, according to Jargan (2008, para 16), Kraft Foods decided to tailor the Oreo cookie to meet the needs for the people of China to à ¢Ã¢â€š ¬Ã…“consist of four layers of crispy wafer filled with vanilla and chocolate cream, coated in chocolate.à ¢Ã¢â€š ¬Ã‚  With this tailoring to the needs of the people of China, the Oreo cookie became Chinaà ¢Ã¢â€š ¬Ã¢â€ž ¢s top cookie seller in 2006 (Jargan, 2008, p ara 19). The new Oreo cookie in China was outselling the original Oreo cookie in China which led to Kraft Foods sell them in Canada, Asia, and Australia (Berry, 2008, para 19). Once Kraft Foods decided to make modifications to their Oreo cookie in China, it led to the success of their product in China. Important Factors The two most important factors that I feel make the entry into a host countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s marketplace challenging and potentially risky for a United States company includes that of not understanding the needs of the host countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s needs and not having a specific business strategy in place prior to entering a host countryà ¢Ã¢â€š ¬Ã¢â€ž ¢s marketplace. It is essential for a company to understand the culture and needs of the host country prior entering that particular country with their product. Countries may differ from each other based on their cultures in which a company needs to understand in order to be successful in that particular country. Companies need to have a business plan tailored to that particular country prior to conducting business in that country. A business strategy that works for one country may not necessarily work for another country. Having a business strategy that is tailored to a particular country, can aid in the success of that company when entering into a country to conduct business. References Berry, B. (2010, June). Agri-Food Past, Present, Future China. Retrieved December 18, 2013, from Ats-sea.arg.gc.ca: https://www.ats-sea.agr.gc.ca/asi/pdf/3833-eng.pdf Clement, S., Jain, T., Jose, S., Koellmann, B. (2013, March 31). Smart cookie. Retrieved December 18, 2013, from Businesstoday.com: https://businesstoday.intoday.in/story/how-kraft-foods-won-over-customers-in-china-and-india/1/193162.html KraftFoods. (2011, September 6). Brief History of Kraft Foods. Retrieved December 18, 2013, from Kraftblogr.blogspot.com: https://kraftblogr.blogspot.com/2011/09/brief-history-of-kraft-foods.html Jargon, J. (2008, May 1). Kraft Reformulates Oreo, Scores in China. Retrieved December 18, 2013, from Wsj.com: https://online.wsj.com/news/articles/SB120958152962857053

Subway Restaurants Essays - 21330 Words

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Traditional And Nontraditional Characteristics Predicting...

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No portion of this book may be reproduced, by any process or technique, without the express written consent of the publisher. Library of Congress Catalog Card Number: 2007007922 ISBN: 978–1–59158–408–7 978–1–59158–406–3 (pbk.) First published in 2007 Libraries Unlimited, 88 Post Road West, Westport, CT 06881 A Member of the Greenwood Publishing Group, Inc. www.lu.com Printed in the United States of America The paper used in this book complies with the Permanent Paper Standard

Deductibility of Legal Expenses †Free Samples to Students

Question: Discuss about the Deductibility of Legal Expenses. Answer: Introduction: ITAA 1997 is an important act of Parliament of Australia. It is a main statute under which the income tax is being calculated. ITAA 1997 is a rewrite of prior Income Tax Assessment Act 1936. ITAA 1997 can be known as the updated model of ITAA 1936. It formulated the norms for tax calculation in Australia. Under section 8-1, it gives provision to allow some deductions. (Australian Government, 1997). Here, the given questions explain some of these deductions their status in ITAA these are as follows: The cost of moving such fixed assets like machinery from one site to another site would be a capital expense no deduction is available under section 8-1 of ITAA 1997. This expense increases the cost for depreciation purpose so; it counted as the capital expenditure. Due to its capital nature, the given provision under section 8-1 does not allow to provide any tax exemption limit. The cost of revaluation of assets considered as the expenses related to fixed assets. During the calculation of deductibility, it is considered as relevant because these expenses enhance the income earning capacity and it also incurred to protect the assets. It is the part of operations in business so, it will considered as revenue in nature and if this cost helps to generate benefit and this expense is likely to recurred then it will considered as deductible under section 8-1 in ITAA 1997. Legal Expenses incurred by a company opposing a petition for winding up: These legal expenses are considered as expenditure related to income earning capacity and structure operations of the company. It appears, if outcome of such expenditure gives profit yielding capacity then this expenditure will considered as capital in nature. If this expenditure gives more impact on the process of operations in business then it will considered as revenue in nature. On the basis of its nature, allowable deduction has decided under section 8-1 in ITAA 1997. Legal Expenses incurred for services of a solicitor in respect of a number of matters, including conveyancing, discharge of a mortgage, and general legal advice relating to a clients business operations. Under section 8-1 of ITAA 1997, legal expenses are allowable deductions if these expenses arise due to daily basis activities of tax payers business. On the basis of the provisions of section 8-1 in ITAA 1997, any loss or outgoing from assessable income which is incurred in generating the assessable income will be allowed to deduct during the tax calculation. It is necessary that these expenses are incurred in carrying out for the purpose of producing assessable income. Then Solicitor can claim for the tax benefit for his expense. Solution: To claim input tax credit, it is required that an organization should be registered for GST purpose. Input tax credit can be claimed when an organization buy any service as their input to sell their product. So, at the time of tax payment, organization can reduce its tax liability because it has already paid during the purchase of this service (Australian Government, 2017) Here, Big Bank is providing services related to finance and it is also registered for GST purpose in Australia. As Big Bank launched its new product and due to this reason bank need to do some changes in its accounting system due to the application of GST on new product. Big Bank prepared its budget for expenditure on advertising campaign for $1,650,000 in which it spend $550,000 on television advertising campaign $1,100,000 on general campaign like radio print media etc. According to the norms of taxation, acquisitions to make input tax supplies like loan deposit facilities will not be creditable acqui sitions. If acquisitions are related to make tax supplies like home content insurance will be creditable acquisitions. In relation to advertising expenditure, TV ads for home contents insurance will be fully creditable. Here, input tax credit will be available for $50,000. In relation to general advertising sources, it becomes necessary to apportion by specific method which must be fair reasonable. One of these types of method will be attribute 2% of expenditure to make tax supplies 98% to input tax supplies, which shows reflection of actual forecasted business line split. References Australian Government, 1997. Income Tax Assessment Act 1997. [Online] Available at: https://www.legislation.gov.au/Series/C2004A05138 [Accessed 03 October 2017]. Australian Government, 2017. Claiming GST credits. [Online] Available at: https://www.ato.gov.au/business/gst/claiming-gst-credits/ [Accessed 03 October 2017]. Clough, M. Jaques, M.S., 2006. The Deductibility of Legal Expenses. [Online] Available at: https://www.tved.net.au/index.cfm?SimpleDisplay=PaperDisplay.cfmPaperDisplay=https://www.tved.net.au/PublicPapers/August_2006,_Sound_Education_in_Taxation,_The_Deductibility_of_Legal_Expenses.html [Accessed 03 October 2017].