This is a paper on the integration of SWOT factors for Kraft Foods Company with the different strategies identified by Michael Porter. For each SWOT factor, it gives a tactic which can be applied by the organization in order to take advantage of the strength or opportunity or manage the weakness or threat.
Strategic Choices
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Low cost
Differentiation
Preemptive
Strengths: Outbound logistics
The company should improve their distribution method to make it more cost effective thus allowing them to cut distribution costs and these savings can be passed on to the consumers. As posited by Alagse (2012)
, the best strategy for Kraft foods would be to become the lowest cost supplier of their products rather than the lowest cost producer. This would enable the company to translate their cost advantage into price advantage for their consumers enabling them to improve their market share.
The company should ensure availability of their products in order to enjoy prolonged sustainability as a result of ease of access of their innovative products to the consumers thus increasing brand loyalty. The company will also be able to create unique value for their products as a result of their ready availability in the market thus increasing the appeal of the product greatly Jemmeson, 1997()
The company should improve their outbound logistics in order to attempt to tap into market segments which have not been targeted by competitors thus allowing the company to focus on a specific market niche. This will enable the company to increase their consumer base through offering preferential access to their products to these new market segments.
Kraft foods should position their products uniquely by improving their distribution channels to ensure they reach as many consumers as possible in order to establish a dominant position in the market. This strategy will help Kraft foods to establish a large customer base enabling them to be able to respond better to the competitive wars in the industry by the company being seen as the premier destination for food products Passemard & Kleiner, 2000()
Weaknesses: Difficulty in marketing & sales of new brands
The company should position new brands as low price brands in the market in order to become the cost leader for these new brands Ma, 2002()
The company should ensure the new brands are as innovative as possible through improved quality, packaging, and design and that they are constantly improved in order to keep them a step ahead of competitor's products.
The company should ensure new brands are targeted for specific market segments in order to focus on these specific market niches.
The company should ensure they have the necessary technical skills and corner raw materials to be able to produce the new products in a unique manner that the competitors cannot copy Ma, 1999()
Opportunities: Growth of U.S. economy and coffee market
The company should ensure their products are well priced to take advantage of the growth in the U.S. economy and coffee markets. In order to increase their market share, the company will need to leverage economies of scale with some cost-cutting measures in order to pass cost reductions to the consumers Lindahl & Beyers, 1999()
The company should ensure their products are differentiated through quality and superior designs in order to create value for the product against the products of competitors which will attract potential customers and help to maintain the existing customers Powell, 2001()
Growth of the U.S. economy and the coffee market creates new markets for Kraft foods to market its products. Kraft foods should embark on ensuring their brands are well-known and recognized in these new market segments established through promotional activities.
Kraft foods should ensure they improve their technical expertise and gain access to as much high-quality raw material as possible in order to have a stronger competitive advantage Powell, 1995()
Threats: Strong competitive rivalry
The company should strive for the product positioning that promotes the visibility of their products as low cost products and does not harm the profit margin of the company. Kraft foods should thus strive to ensure their consumers
The company should improve their product differentiation through improved quality, design and packaging of the products in a way that creates the perception that there is no substitute that is available for the consumers as a result of the differences in quality and design of the product Dennis, Nunamaker, & Paranka, 1991()
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