Kraft-Heinz recently reported historically bad financial results. Many investment analysts have characterized these results as a repudiation of the acquisition strategy of 3G, the investment firm that acquired first Heinz and then Kraft and later merged them into Kraft-Heinz. Describe 2 aspects of 3G’s acquisition strategy that have contributed to the negative results Kraft-Heinz recently reported.
The main acquisition strategies that have contributed to the negative results are
1. Cost cutting strategy
It slashed the workforce and adopted a zero -based budgeting. This is a strategy that demands constant justification of costs without regarding the previous spending levels. The firm even yanked the employee perks. This strategy also turned off potential acquisition targets.
2. Less adaptability
The merged company hasn't adapted to changing consumer tastes. There is a growing interest towards organic food as against processed food . And because of cost cutting strategy it was not able to acquire any other company in order to meet the needs of the consumers .
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