The result would be a shift in consumer habits toward better value through store-name brands and higher nutritional value through smaller-label or independently owned firms. This denotes a critical challenge for Kraft to present itself as providing healthy and organic lines of food, absorbing the cost of this strategic investment and pushing for a general change in its long-held image as a factory-firm with little direct interest in nutritional quality control.
Current Challenges:
In response to the challenges imposed by a shifting set of market tastes in the U.S., Kraft's current orientation is toward a growing international marketing scope. This is highlighted by its recent acquisition of the London-based Cadbury company and its heightened focus on penetrating new markets. According to Ferrari, "Kraft's supply chain is about to undergo a rather dramatic transition. According to a presentation delivered by Chairwomen and CEO Irene Rosenfeld...
The company itself will morph to primarily be a confection and snacks oriented business with a presence in 160 countries." (Ferrari, p. 1) the transition will improve its earning and cash flow, making future acquisitions again a prospect.
Divestment/Acquisition Recommendations:
A recommendation hereby derived is that Kraft should return some of this investment to its domestic market for acquisition of several established nutrition-conscious supermarket shelf items.
Works Cited:
Ferrari, B. (2010). Kraft Foods Facing Considerable Global Supply Chain Challenges. Supply Chain Matters.
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Langenfeld, B.K. & Morris, R.J. (2005). Tradictional Case 2: Kraft Foods in the Era of the Category Killer. Strategic Management: Theory and Practice-Cengage Learning.
