Winning Through Focus

When Sanjay Khosla first joined Kraft Foods in January 2007, some of the company's most recognized U.S. brands were struggling in international markets. Oreo, for example, has been an icon in American pantries for decades, but in the early 2000s the Chinese thought the cookie was too sweet, too big, and too detached from their culture. The same disconnect was occurring between the powdered drink Tang and Latin America.

"We were close to delisting Oreo in China. We could easily have said, forget Oreo; the American model doesn't work," said Khosla, president of developing markets at Kraft Foods, headquartered in Northfield, Illinois. "Or you can do something about it."

Khosla explained how he turned the brands into global successes during an interactive presentation and networking reception at Gleacher Center on March 1. Several groups sponsored the event: Kraft Foods, the Booth Marketing Club for part-time MBA students, the Booth Alumni Marketing Roundtable, Beta Gamma Sigma MBA Honor Society, and Gallup Consulting.

Khosla's presentation, "Winning Through Focus," outlined his strategy for streamlining Kraft's international brands. The strategy follows seven steps, starting with figuring out what works. Four years ago "our top line was not growing very much," Khosla explained. "We were in many, many countries. And our bottom line was declining." So, Kraft conducted a series of growth workshops around the world to identify strengths. "What was working was that we had phenomenal talent, great brands. But what was not working was we were not focused. We were trying to do too much, trying to plant flags all over the world."

The next two steps—building on what works and finding a simple hook—led to the implementation of what Khosla called the "5-10-10" strategy. Instead of blasting a host of developing markets with all of Kraft's 100-plus brands, Khosla's team—more than 60,000 employees in 60 countries—focused on five categories and 10 brands in 10 markets.

The fourth step is tapping into the power of people, especially those who best know the market. "Get a local leader and say, 'this is our brand, so this is your brand. You have to follow this framework globally, but otherwise don't ask Chicago for instructions,'" Khosla said. "Then, we'll give you unlimited resources because your only constraint to growth is your imagination."

The fifth step—execution—is the most important, Khosla said. This means clearly defining who will tackle which aspects of the strategy. Then, at step six, take a "glocal" approach, a hybrid of the best local and global promotion strategies from people who care about the brand.

When Kraft leaders in China followed these steps, Oreos became smaller and less sweet, and the marketing team developed a commercial that resonated with Chinese consumers: Chinese NBA star Yao Ming shooting an Oreo into a little boy's glass of milk. Measuring progress, the seventh step, proved that Khosla's model had worked. Oreo has become the number-one selling cookie in China with organic net revenue growth of more than 37 percent on average annually (2006–10) and organic net revenue growth of nearly 50% in 2010. What's more, the company's net revenue in China  grew from $130 million in 2006 to $600 million in 2010. The 10 brands have grown 16 percent on average annually in the last four years.

Measuring success, however, looks at more than just metrics. It also means rewarding outstanding team members. After an honor ceremony for the employee whose ideas helped boost Tang's metrics, "this guy comes to me at the end of it and said, 'you know what; you pay me a lot of money, and I'm really happy, but what you did today for me, building me up in front of my peers and colleagues was really special," Khosla recalled. "And then he started crying."

Khosla's presentation provided an insightful perspective for Chicago Booth students like Matt Glowacki, an independent marketing consultant who plans to complete the Evening MBA Program in June. "Chicago Booth teaches the fundamentals and foundations of marketing, finance, everything. Putting those together creates the big picture," said Glowacki, also president of the Booth Marketing Club. "That big picture is what Sanjay gave us tonight."

Glowacki added that "networking with professionals in the field and hearing their expertise is one of Booth's biggest value drivers. We brought together several different groups: Booth part-time students, full-time students, Beta Gamma Sigma members from throughout the entire city, plus our own alumni."

—Kadesha Thomas