Irene Rosenfeld: Setting New Directions for Kraft Foods

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""Servant leadership" is the most important aspect of a successful leader - the recognition that I am here to help the organization accomplish its objectives rather than they are here to meet my needs. Once you recognize that, you are able to engage the hearts and minds of your followers, and they are able to just deliver the kind of results that you are looking for."

-Irene B. Rosenfeld, Chairman and CEO of Kraft Foods Inc., in 2010.

In August 2011, Irene B. Rosenfeld (Rosenfeld), CEO of US-based snack-food company Kraft Foods Inc. (Kraft), was pushing ahead with her decision to split Kraft into two independent public companies, a high margin North American Grocery business and a high growth Global Snacks business. Rosenfeld contended that this was the best way to stage the company's businesses "for long-term success, the best way for shareholders to value each business, and the best way to ensure a bright future for our people." Rosenfeld, who was ranked number one on Fortune's1 'Most Powerful Women' in 2011, and had around three decades of experience in the food and beverage industry,

-was credited with turning Kraft around and positioning it for growth through the takeover of British chocolate giant Cadbury Plc.² "Irene Rosenfeld is a visionary leader with business acumen, savvy and real impact. She's a catalyst who recognizes and seizes opportunities and empowers others to get dynamic results," said Robert Swieringa, dean of Johnson School at Cornell University³. Upon taking over as CEO of Kraft in 2006, Rosenfeld launched a three-year turnaround plan to bring the company back to profitability and growth. She repositioned Kraft by transforming its product portfolio, revamping some iconic brands, and consolidating its presence in emerging markets. In February 2010, Rosenfeld successfully spearheaded the takeover of Cadbury to make Kraft a market leader in the global confectionery market. According to Greggory Warren (Warren), an analyst at Morningstar, Inc.⁴, Rosenfeld has been "very smart about what she has been doing and how she has been doing it."

As a next step in the company's progression, Rosenfeld announced the decision to split Kraft into two independent public companies. However, some industry experts felt that the proposed split might offset the synergies resulting from the Cadbury acquisition. They wondered whether Rosenfeld’s radical decision to split Kraft would pay off. According to Joe Cornell, president of Spin-Off Advisors LLC.⁵, "On the surface, this makes sense but it kind of reverses what they did with the confectionery buyout. They're basically admitting that all these synergies didn't work."...

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1] Fortune is a global business magazine published by media group, Time Inc.
2] Cadbury Plc was the second biggest confectionery group in the world. The UK-based chocolate giant manufactured and marketed mainly three kinds of confectionery products - chocolate, gum, and candy. The company had a strong presence in Europe and emerging markets such as India, Mexico, Egypt, and Thailand. In 2009, the company's revenue from continuing operations was £5.975 billion. Operating profit rose by 27% to £808 million (US$1.3 billion) and sales increased by 11% to £6 billion.
3] Johnson School is Cornell University's graduate school of management. Cornell University is an Ivy League university located in Ithaca, New York.
4] Morningstar, Inc. is a US-based investment research firm.
5] Spin-Off Advisors LLC is a US-based independent equity research firm.

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