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Published: August 6, 2012
 / Autumn 2012 / Issue 68

 
 

Blank Checks: Unleashing the Potential of People and Businesses

The team also looked beyond chocolate with the “Kuch Meetha Ho Jaye!” (Let’s have something sweet!) campaign, tapping into the Indian tradition of having a sweet bite before life’s most important moments. The idea was to expand the franchise into a larger market of sweets rather than just focusing on chocolate.

The results were transformational. In 2010, Cadbury India had its best year ever, with almost 28 percent revenue growth — doubling its original growth targets and exceeding the $500 million blank check target. The momentum continued in 2011 with more than 30 percent growth. The best part? The team did not end up spending all the money they had asked for, and returned a significant portion of their blank check allocation.

Doubling the Tang business in five years. The developing markets leadership team decided to issue blank checks to a team of Tang leaders in key global markets, asking that they connect locally with consumers in their market, but leverage the resources of the $50 billion global Kraft Foods organization.

The team came up with several innovations quickly. Using Kraft’s global technology resources, they developed locally relevant flavors for Tang such as tamarind and horchata (a traditional drink flavored with lime and cinnamon) in Mexico, mango in the Philippines, passionfruit and soursop (a local fruit) in Brazil, and pineapple and lemon mint in the Middle East. Although Tang’s original orange flavor tops the sales charts worldwide, these local flavors soon made up about 25 percent of Tang sales in developing markets.

With the realization that taste is king and children’s diets in developing markets are often deficient in nutrients, the team repositioned Tang as an affordable (pennies per glass), nutritious beverage fortified with vitamins and minerals. True to Tang’s heritage as a source of vitamin C, the team took the global idea of fortification and localized it to meet regional nutrition needs. For example, they fortified Tang with vitamin C in all geographies, but in Brazil and the Philippines, where children often are iron deficient, they added iron as well as other vitamins and minerals.

The team also crafted a marketing idea for Tang to create a kids’ movement involving sustainability called the “Preparou, Bebeu, Faz” (Prep, Drink, Do) campaign. Tang is a very green brand — it takes less energy to produce and transport than other beverages because the water is added by the consumer — so the new campaign built upon the brand’s green equity. The team standardized the pouch size and structure across Latin America to reduce 3 million pounds of packaging annually. They took this green idea to places like Brazil and encouraged children to recycle. More than 90,000 kids recycled more than a million packages in Brazil within the first few years. The used packages are recycled into soccer balls, bags, and building materials whose sale raises money for schools. This kids’ movement has been expanded to other markets, including Argentina and Mexico.

Inspired by the blank check, the Tang team used local innovation and global technology resources and a collaborative approach to achieve phenomenal results. Tang is Kraft’s newest billion-dollar brand. Its sales have almost doubled in five years, and it is now more than three times the size of its nearest competitor. In 2011, Tang was served 20 billion times in 90 countries.

“Having a blank check for Tang allowed us to think differently about this brand,” says Gustavo Abelenda, president of Kraft Latin America. “Our small, virtually connected team had the freedom to develop a global framework for the brand, quickly scale up local innovations, and use global technology to drive explosive growth.”

 
 
 
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Resources

  1. Sanjay Khosla and Mohanbir Sawhney, “Growth through Focus: A Blueprint for Driving Profitable Expansion,” s+b, Autumn 2010: Rather than seek increased revenues and profits by expanding products and markets, companies should follow a seven-step strategy for achieving more with less.
  2. Irene Rosenfeld, “Inside the Kraft Foods Transformation,” s+b, Autumn 2009: Top leaders from the largest food and beverage company in the U.S. talking about their three-year turnaround and their campaign to reorganize for growth.
  3. For more thought leadership on this topic, see the s+b website at: strategy-business.com/strategy_and_leadership.
 
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