Incentives and Consequences of the Shift to Zero-Based Budgeting in International FMCG Companies by the Case of the Kraft Heinz Company and Mondelez International

Budgeting is universally applied in companies of different sizes and occupations all over the world and represents a strong management tool, which drives a company's performance. Among different types of budgeting approaches, there has appeared a zero-based budgeting (ZBB) concept, which has its roots based on the idea of budget preparation for each period from scratch. This study aims to determine whether ZBB can act as a long-term sustainable strategy in international FMCG companies and whether this approach is purely directed to cost-cutting initiatives. Based on the review of the literature on the topic of budgeting in companies and the shift to ZBB by international FMCG companies, a performance analysis of the Kraft-Heinz Company and Mondelez Int. has been conducted in a form of case studies. The results indicate that ZBB can serve as a budgeting strategy for a period of 4-5 years and requires afterward a temporary break, while still bringing other benefits despite the pure cutting cost. The difference in the implementation approach had an influence on the subsequent performance, which led to a certain list of recommendations for the companies. Further research is needed to investigate the case-studies of longer-term implementation of ZBB.