This paper presents a comprehensive strategic analysis of Kraft Foods, one of the largest consumer packaged goods companies in North America. The analysis begins by reviewing Kraft's vision and mission statement and assessing whether the company's actions align with its stated values of respect, quality, safety, innovation, openness, and integrity. It then applies Porter's Five Forces model to evaluate Kraft's competitive environment, followed by an examination of the company's intensive strategies across market penetration, market development, and product development. A SWOT analysis identifies the firm's key strengths, weaknesses, opportunities, and threats. The paper concludes with strategic recommendations for the next five years, focusing on cost reduction, responsiveness to consumer trends, and expansion into emerging markets.
When most people think of Kraft Foods, they associate it with specific products the company sells, such as Kraft Macaroni and Cheese. While this is true, the reality is that the firm owns a large number of major brands. The most notable include Bakers, Cheez Whiz, Cool Whip, Cracker Barrel, Crystal Light, Jell-O, Kool-Aid, Kraft, Lunchables, MiO, Miracle Whip, Oscar Mayer, Planters, Shake & Bake, Stove Top, and Velveeta. This breadth of offerings has diversified the company's ability to reach a larger demographic of consumers. However, managing such an extensive portfolio also presents unique challenges. To fully understand Kraft's competitive position, it is necessary to analyze its vision and mission statement, conduct an external assessment, evaluate the organization's intensive strategy, perform a SWOT analysis, and offer recommendations for the next five years. Together, these elements highlight the underlying strengths and weaknesses of the company (Kraft Foods, 2013; Nestle, 2007).
Kraft's vision and mission are centered on providing healthy foods for people to enjoy while ensuring that customers know their views are always taken into consideration. The company is focused on the values of respect, quality, safety, innovation, openness, and integrity. Kraft Foods appears to be following these provisions, as evidenced by the large and varied number of products it offers. At the same time, the company continually introduces new brands that emphasize health and reflect the changing tastes of its customers (Kraft Foods, 2013; Kraft Foods Mission Statement, 2011).
Porter's Five Forces model evaluates competitive dynamics across five dimensions: the threat of new entrants, the threat of substitute products or services, the bargaining power of customers, the bargaining power of suppliers, and the intensity of competitive rivalries. In the case of Kraft Foods, the threat of new entrants can significantly impact the firm's bottom-line results and competitive position. New companies can emerge quickly from different regions of the world, offering similar merchandise at lower prices (Kraft Foods, 2013; Nestle, 2007; David, 2009).
Substitute products and services represent another threat, as alternatives can enter the marketplace and diminish demand for Kraft's offerings. The bargaining power of customers is shaped by shifts in tastes and demand, which can reduce sales for certain items due to particular trends or fads. The bargaining power of suppliers can drive up manufacturing costs when raw material prices increase. Finally, the intensity of competitive rivalries can negatively influence Kraft by triggering price wars and encouraging competitors to introduce merchandise that directly targets Kraft's customer base (Kraft Foods, 2013; Nestle, 2007; David, 2009).
"Market penetration, development, and product strategy"
"Kraft's key strengths, weaknesses, opportunities, and threats"
"Cost reduction, emerging markets, and consumer adaptation"
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