Management Organization Behavior - Kraft Foods Company

Kraft Foods - Managing Change: Innovation & Diversity

Sou Sovannratanak

Management and Organization Behavior (CZBB9008)

Raffles International College Cambodia

Abstract

        For this particular MOB assignment, we each are assigned a case to solve. My case was revolved around a company named “Kraft”. The case discuss the numerous changes that the company had implemented in order to adapt itself to the ever changing market demands. In the following, we will answer the 5 questions related to the case which are:

- “If only a small percentage of people today are buying more nutritious foods, do you agree that Kraft should be introducing many new products?”

- “Use the five steps of the comprehensive change model to explain how Kraft is changing to offer more nutritional foods”

- “Discuss new ventures in this case”

- “Identify the strategy changes Kraft made with the introduction of more nutritional foods. Be sure to state Kraft’s corporate and business strategies.”

- “What type of departmentalization does Kraft have?”

Additionally, we will analyze Kraft’s history, strategic decisions and how the company had performed during its existence.

INTRO

1. History

        Kraft Foods Company manufactures and sell food and beverage products, including convenient meals, refreshment beverages and coffee, cheese and other grocery products. Kraft is come from the name of the founder name James Lewis Kraft. In 1903 he had only $65 in capital, a rented wagon and a horse name Paddy, he started a short time business by purchasing cheese at Chicago’s Water Street wholesale market and reselling it locally. In 1909, J.L. Kraft and his four brothers incorporated as a J.L Kraft & Bros. Co. In 1914, they purchased their first cheese factory in Stockton. In 1915, they began producing cheese and the method of J.L Kraft of producing cheese was so revolutionary. In 1916, he acquire a patent for the factory and in 1917 they started supplying cheese to the U.S military in World War I. Until 1988, Kraft was sold for $12.9 billion to Phillip Morris, now known as Altria Group, Inc. which is a tobacco company. This two companies was merged and both under the control of Phillip Morris, and changed the name of Kraft to Kraft General Foods. The combination of this two company creating the largest food maker in the United States. In 2003, Phillip Morris announced its plans to separate Phillip Morris’s Tobacco Company from Kraft Foods Company. Until year 2006, Kraft had an agreement that Kraft is no longer part of Altria Group. In today’s Kraft Foods is the
second-largest food and beverage company in the world. Kraft is headquartered in Northfield, Illinois. And Kraft products are marketed in 170 countries worldwide.

MAIN BODY

1. Should Kraft be introduction many new products? If only a small percentage of people today are buying more nutritious foods.

        Irene Rosenfeld the CEO of Kraft Foods Company says that “people do in fact want to eat healthier foods, but they don’t want to make a trade-off on taste”. And there are only a small percentage of people that buying more nutritious foods. Even though, Kraft knows that only a small percentage of people that buying more nutritious foods. But they didn’t refuse in offering their new products that are more nutritious foods. Kraft strategy is keep producing those junk foods and extend the health and wellness products in order to grabs both target group which are a group of people resist changing to more nutritious foods and a group of people that required more nutritious foods. Kraft take this commitment stage as an opportunity. Kraft Foods Company is a largest company that sell Junk foods such as white breads, pastries, cookies, candy, soda, ice cream, cereal, chips etc. which is food that has low nutritional value and it contains high amount of fat or sugar. However, most people denied from stop eating junk foods even though they know the facts that it’s not good for their health. But there is also a group of people that resist to eating junk food. So, Kraft introducing more products for the variety of customer choices.  

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