Inputs for Porters 5 Forces Analysis on Kraft Foods Case Study

Excerpt from Case Study :


Sources of Information for a Porters Five Forces Analysis on Kraft Foods

To undertake a Porters Five Forces analysis it is necessary to identify potential sources of information that will give the required information. The Five Forces analysis will require an assessment of the five areas; degree of rivalry among competitors, threat of new entrants, bargaining power of suppliers, bargaining power of customers, and availability of substitutes. This process can be examined by looking at the sources which may be used for a Porters Five Forces analysis of Kraft Foods, a firm that competes in the food industry. Each of the forces will be considered separately.

Degree of rivalry among competitors

Source 1; CSI Market; URL is

This is a very useful web site which has the primary aim of providing information to potential investors. The page on Kraft Foods is particularly useful in assessing the firm's position in the context of rivalry as it provides information on the market share that Kraft Foods has on the segments in which it operates. The webpage provides information on the company and its competition by segment, looking at the beverages segment, the cheese segment, refrigerated meals, grocery, and international and food service. For each of the segments the companies own market share is given, and the main competitors are identified, along with their own market share in that sector. This helps to indicate whether or not there is a high level of concentration, and position of the organization within that competitive industry.

Source 2; Kraft Foods 10k, URL is

The annual report is a useful source of information, and will be seen under several sections for using porters five forces analysis. Within the 10k annual report there is a section which deals with the threat of competition, and gives a broad indication of the type of competition at the organization faces, and gives information on the way that the company deals with the competition, identifying the broad tactics, such as effective advertising, innovation and supporting brand recognition and loyalty.

Source 3; K-Mart, web site, URL at

This is a supermarket website, which may be useful in identifying the level of competition that exists. As the website belongs to a major retailer, the grocery segment provides information on a range of choices for different products, and will help to identify the number and type of products that the craft products are competing with. Other supermarket websites may also be useful in this assessment.

Threat of new entrants

Source 1; U.S. Food and Drug Administration, URL is

This official government website provides information on potential barriers that exist for new entrants in the form of regulation and requirements. The food industry is regulated by the FDA, and regulations provided may be seen as barriers, the harsher the regulations or more difficult it is to comply with those regulations, the more difficult it may be for new entrants to compete with craft. The webpage provides information on guidance and regulation, including registration of food facilities, requirements of food businesses, and issues such as food labeling. These may all be seen as influencing the ease with which new entrants may enter the market.

Source 2; News Baertlein, L, (2014, Sept 30), Kraft challenged by "healthier" macaroni and cheese brands, Reuters, accessed at

This news article provides an inside an example of the way in which information from the marketing press, whether it is from the dedicated national press, or the news media, can indicate areas where there may be gaps in the market. This article demonstrates the presence of a gap for one of the core products within the craft product portfolio; macaroni cheese.

Bargaining power of suppliers

Source 1; Kraft Foods 10k, URL is

The first source of information regarding the power of suppliers is the firms own annual financial filing, referred to as a 10k. This is the annual financial report that is filed by the company and as the Securities Exchange Act 1934. Within the report as information regarding the types of suppliers that are utilized, and relationships they have with those suppliers. For example, under the section on raw materials and packaging, the company states that due to the volume is a purchase from some suppliers they are able to enjoy favorable pricing. The company also reports any significant changes in relationships with suppliers that could impact on their business.

Source 2; Kraft Supplier Web Site, URL is at

This is a website that was set up with the purpose of Kraft working with their suppliers. The site provides information regarding the company's expectations of suppliers, and information regarding the way in which the organization will support and work with suppliers. There are slide presentations from the supplier forums, and an insight can be gained to the type of suppliers the company works with. Notably, a large number of the suppliers can be seen as small organizations, supplying raw inputs, such as processed foodstuffs. This gives a great deal of insight into the type of relationships that Kraft has with its suppliers.

Bargaining power of customers

Source 1; Kraft Foods 10k, URL is

Just as the annual report for Kraft Foods group provide information on the relationship it has of suppliers, it is also a useful source of information in this relationship with customers. The report identifies significant customers, and reports on any changes in relationships with those customers. For example, it was noted that 43% of the net revenues and by the firm came from only five large customers, indicating a high level concentration, and the potential for those firms to exercise bargaining power.

Source 1; CSI Market; URL is

This website has a ready been used to assess the company's market share. It is also useful in assessing the potential bargaining power customers, by indicating the level of competition in any particular marketplace. Bargaining power customers may be increased where there is a high level of choice, easy switching, and the webpage indicates the sectors where there is the highest level of choice for consumers. This may be used to consider the issue from the perspective of the end consumers, rather than the retailers and resellers who are the direct customers of Kraft Foods.

Source 3; WalMart Annual Report, URL is

Just as the annual report of Kraft Foods is information on whose relationship with suppliers and customers, said other companies. Therefore, the 10k or annual reports of companies which are major customers may be considered as a potential source of information, indicating the importance of their relationship with Kraft as a supplier.

Availability of substitutes

Source 1; Kraft Foods own Web site, URL is at

The website of craft gives information on the different types of brands that the company sells across the different product ranges. In order to assess the availability of substitutes it is necessary to first look at the specific types of products that the company sells, to identify the way in which substitutes may manifest. This is only the first stage of an assessment of the availability, and except ability, substitutes.

Source 2; WalMart; web site URL is at

WalMart is a major retailer of craft products. According to the annual report it is also the largest single customer. The WalMart website will provide information on potential substitute products, including information on ease of availability, and pricing. Using information from the craft website, and knowledge of the craft products, it is possible to search the website for potential substitutes, and determine the acceptability, including two comparison of price. This may provide useful information, firstly due to the ease of comparison of substitutes (as well as competing products, so this could also be used to assess rivalry), but secondly because it is the…

Cite This Case Study:

"Inputs For Porters 5 Forces Analysis On Kraft Foods" (2014, September 08) Retrieved August 21, 2017, from

"Inputs For Porters 5 Forces Analysis On Kraft Foods" 08 September 2014. Web.21 August. 2017. <>

"Inputs For Porters 5 Forces Analysis On Kraft Foods", 08 September 2014, Accessed.21 August. 2017,