Are your costs too low?

It seems to be inevitable that when one company takes over another it immediately launches a cost-cutting exercise on that brand, as was the case when Kraft bought out Cadbury.

Are your costs too low?

Jules Goddard

When Kraft announced it was taking over Cadbury, it wasn't long before a hefty round of cost-cutting started. But is this depressing and familiar scenario really the best way to grow a company? Jules Goddard examines the flawed assumptions inherent in efficiency drives, concluding that it is strategy, not costs, that determine competitiveness

Within A Day of acquiring Cadbury, before the ink was dry on the contract, Irene Rosenfeld, CEO at Kraft, was announcing $2 billion of cost-cutting. How utterly predictable. How depressing. How unimaginative. But more than anything, how puzzling....

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