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Kraft Foods Case Study

Essay by   •  April 30, 2017  •  Case Study  •  864 Words (4 Pages)  •  1,191 Views

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Kraft Foods’ Strategy

By distinguishing its product from its competitors and by implementing lower costs as alternatives, the competitive strength of the company has varied in comparison to others in the same industry. Kraft Foods’ corporate strategy is to lead the market by dominating the business in the field of snacks. Aside from doing the best part in business, Kraft chose to focus on their brand image and the performance-driven culture. In other words, Kraft’s strategy was to optimize profit growth and generate excellent returns for the betterment of their company and their company’s investors and shareholders. Upon obtaining their independence from any other entities, Kraft focused much of their attention on their weaknesses and pain points and subsequently implemented strategies to address their core business functionalities. Kraft has certainly evolved over the years and their evolution has resulted in several improvements such as properly addressing product development, a stronger focus on organizational structure, strengthened accountability on all fronts, emphasis on promotion activities for the companies, and investments were made on the companies that are trading globally and in developing markets.

Kraft Foods’ Business Portfolio

Kraft Foods has a straightforward key strategy, which is to build and expand a dominant snack business worldwide. This strategy has been executed well over the last decade. Moreover, the number of sales and acquisitions for Kraft increased profit and market share. In North America alone, Kraft Foods’ grocery division has much profit potential to its shareholders and it also has long-term attractiveness to its shareholders in this region due to the significant size of the food company in North America.

Kraft Foods’ Strength Assessment

From the vantage point of the company’s strengths, the market share and reputable brand image are the most significant parts of the company’s competitive strength, namely for the North American business unit. In other business units such as Europe and developing areas, the new product development and expansion of product lines are demonstrations of competitive strength for Kraft Foods, especially when compared to their competitors. The culmination of these factors, accompanied with the strengthened supply chain relationship and marketshare in the North American business unit show higher profit margin and growth in revenue.

Kraft Foods’ 9-cell industry attractiveness/business strength matrix

A 9-cell industry attractiveness/business strength matrix displaying Kraft Foods’ business units would have the North American business unit in the lead with a rating of 6.75 for both industry attractiveness and business strength while yielding 46.30% revenue. Comparatively, the European business unit would be backing North America with a business strength at 5.05 and industry attractiveness at 5.85 and 24.60% revenue yielded. The developing market would be rated at 5.25 in business strength and 6.55 in industry attractiveness while yielding 29.10% revenue

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