With the news of the approval of Kraft’s US$19.4 billion offer for Cadbury, many of the staff of the British chocolate maker will be waiting with anticipation to hear their fate. Cadbury employs around 5,600 workers across Britain and Ireland, many of whom could now face redundancy as Kraft starts its reported US$675 million cost-saving plan.
No doubt, the move makes perfect financial sense to Kraft, which is acquiring a strong set of brands and a flourishing business, but it is a pity that these big acquisitions so often result in job losses.
In the packaging world, too, there continue to be major acquisitions and mergers: witness the takeover of Amcor by Alcan. One of our news stories this month describes how the organisation will restructure itself and its senior management: as yet, there is no talk of lay-offs. And in the flexibles packaging world, there are likely to be ‘fewer yet larger multinational consumer flexible packagingo rganisations’, in the coming months and years, according to a new report from PCI films (see news section).
Any major merger or acquisition involves a difficult ‘bedding in’ time, when often very different cultures and working practices are expected to blend together. A clash of cultures, if inevitable, is tricky to handle, and often ‘change managers’ are brought in. A few years ago, I would have dismissed this as corporate nonsense, but having experienced the merging of companies first-hand a few times, I can see why these guys are necessary.
Branding specialist Interbrand highlights the very different cultures of Kraft and Cadbury: “For Cadbury it’s about being open and honest, acting with integrity and providing quality products; whereas Kraft is guided by a more dynamic proposition, which promises a ‘dynamic, fast-paced environment’ founded on results-focused principles.”
Other issues that can arise from these big deals, according to a report from the Society of Human Resources Management foundation, include a drop in financial performance; loss of productivity; loss of key talent; a clash of management styles; inability to manage and implement change; objectives not being well understood; and a clash of cultures, as mentioned above.
Whether Cadbury will change its brand image or not remains to be seen. Personally, I think it would be marketing suicide, as the iconic purple packaging sets it up as one of the best loved and most recognised brands in the confectionery market, not only in the UK, but across the world. Packaging is the first contact that these products have with consumers, who are emotionally drawn to favourite brands.
Maureen Byrne
Editor
Maureen Byrne Maureen Byrne
