Kraft Heinz Merger
Name
Institution
Kraft Heinz Merger
The merger between Kraft Foods Group and Heinz Holdings Corporation to form The Kraft Heinz Company has birthed one of the largest foods and beverage companies in North America (Hellman, 2016). The company is now valued at close to forty-six billion US dollars making it the fifth-largest food and beverage company in the whole world. In North America, it is considered the third-largest food and beverage company with annual sales of about twenty-seven billion US dollars (Hellman, 2016). The four-firm industry ratio in North America is thus expected to increase following this merger. An increase in the four-firm concentration ration reinforces oligopoly, meaning that the top four firms will have a significant grip on the market.
One major advantage associated with this merger is the resulting opportunities created. The two food giants coming together have increased the company’s grip in the market, enabling it to expand its market shares and explore more opportunities (Hellman, 2016). To serve and meet the demands of the increased client base, the company has to recruit more employees and ratify more partnerships. The partnerships and employment opportunities created to aid in improving the living standards of various hence boosting the economy of the nation.
After the ratification of the merger, the company embarked on cutting costs instead of focusing on the quality of its foods (La Monica, 2019). The cost-cutting scheme has therefore led to a reduction in the quality of foods and beverages by the company hence a great disappointment to the customers. Further still, the company, with so much focus on cutting costs after the merger, has become insensitive to the needs of its customers (La Monica, 2019). Instead, if adapting to changes like switching to organic foods that have become popular with many people, Kraft Heinz has stuck to its traditional cheese and processed meat.
References
La Monica, P. (2019). What went wrong at Kraft Heinz. Retrieved 30 April 2020, from https://edition.cnn.com/2019/02/22/investing/kraft-heinz-stock-strategy/index.html
Hellman, J. (2016). The Kraft Heinz Company: A Short SWOT Analysis. Retrieved 30 April 2020, from https://www.valueline.com/Stocks/Highlights/The_Kraft_Heinz_Company__A_Short_SWOT_Analysis.aspx#.Xqp4rWhKiCh