This paper applies a integrated strategic analysis to Kraft Foods by combining SWOT analysis with insights drawn from the Resource-Based View (RBV), Porter's Five Forces, and PEST frameworks. Using a structured matrix, the paper maps four competitive strategy types — low cost, differentiation, focus, and pre-emptive — against each SWOT factor. Key findings highlight Kraft's research and development capability as a core strength, high product substitutability as a primary weakness, favorable economic conditions as an opportunity, and intense market rivalry as a major threat. The paper then explains specific strategic recommendations for each combination, culminating in a discussion of how these elements interconnect to inform coherent, long-term competitive positioning.
The paper demonstrates strategic synthesis: rather than applying each analytical framework in isolation, it integrates RBV, Porter's Five Forces, and PEST into a single SWOT matrix and then cross-references each factor against four competitive strategy types. This layered approach shows how multiple models can be triangulated to produce richer, more actionable strategic recommendations.
The paper opens with a framing section that introduces the analytical approach, followed by a SWOT matrix table that serves as the paper's organizational backbone. Four numbered subsections then expand on each row of the matrix — strengths, weaknesses, opportunities, and threats — explaining how each competitive strategy type applies. A brief conclusion synthesizes the findings and flags the inherent risks of strategies such as blue ocean. The structure mirrors a standard strategic management report format, making it a useful model for business studies students.
The use of different analytical models applied to Kraft Foods can be brought together using a SWOT analysis as the basis, identifying a major factor from each model and assessing it within the context of different competitive strategies that may be adopted.
Looking first at strengths: one factor that may be particularly valuable in terms of developing competitive advantage is the research and development expertise that exists within the firm. This has been drawn from the Resource-Based View (RBV) of the firm, as one of the human resources available to the organization.
The weakness chosen for the analysis is the high level of substitutability, taken from Porter's Five Forces analysis. The goods sold by Kraft can be easily substituted with other products — for example, a packet of Kraft macaroni cheese could be substituted with a non-Kraft frozen TV dinner, and Kraft Miracle Whip may be substituted with mayonnaise, thousand island dressing, or other sauces. For each product there are alternatives that serve the same purpose, sold in the same shops and easily accessible due to low switching barriers.
The opportunity selected is the economic influences identified through PEST analysis. Current economic conditions indicate a recovery that is increasing the potential level of disposable income among consumers. Interest rates are also remaining low, which may provide Kraft with opportunities for increased investment due to the low cost of capital in a marketplace showing an upturn.
The threat used is the high level of rivalry from Porter's Five Forces model. The market is highly competitive, with firms competing aggressively. Other large firms also operating in the market have significant financial resources and may seek to gain better shelf placement in retail environments.
The table below presents the SWOT factors alongside four competitive strategies — low cost, differentiation, focus, and pre-emptive — showing how each strategic approach can be applied to each SWOT dimension.
Strength — Human Resources, specifically R&D personnel (RBV):
Weakness — High substitutability (Porter's Five Forces):
Opportunity — Economic influences (PEST):
Threat — High level of rivalry (Porter's Five Forces):
The different business strategies for each competitive approach are all built on the strength of human resources, specifically the research and development knowledge and expertise within the firm. For the low cost strategy, research and development resources will be used to develop new manufacturing processes that help reduce overhead costs (Mintzberg et al., 2011). A low cost strategy requires an organization to enhance operating efficiency in order to improve underlying profits (Mintzberg et al., 2011). Internally developed efficiency improvements will not only reduce costs but will also be difficult for other firms to emulate, making them a durable source of competitive advantage. With lower costs, improved profit margins may be reinvested to support sales in other ways, for example through increased marketing expenditure.
The differentiation strategy may be supported through the core activities of the research and development department by improving existing product ranges and developing new characteristics or features that appeal to the target market, supported by additional marketing messages. Research and development capabilities may also support the focus strategy through the creation of brand extensions targeting specialist products that appeal to small or niche markets — for example, flavored lactose-free macaroni cheese. The pre-emptive strategy may be facilitated by research and development work that identifies and creates entirely new product categories, enabling the organization to gain a first-mover advantage (Kotler & Keller, 2011).
Kraft Foods has a number of potential strategic options that could be utilized to pursue different types of competitive strategies — building on strengths, minimizing weaknesses, capitalizing on opportunities, and reducing the potential impact of threats. The use of the research and development department to develop new products, improve existing products, and investigate more efficient production methods may satisfy multiple strategic goals simultaneously.
The blue ocean strategy may overcome challenges such as high levels of competition, but it carries its own risks: an underdeveloped market may be underdeveloped for a reason, for example because there is insufficient demand to generate a desirable level of profit. The different strategic elements are all interconnected, and this analysis demonstrates the importance of considering and interpreting strategic frameworks in an integrated rather than isolated manner.
Kraft Foods. (2014). Form 10-K. Retrieved 29 September 2014.
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Kotler, P., & Armstrong, G. (2013). Principles of Marketing. Pearson.
Mintzberg, H., Ahlstrand, B., & Lampel, J. B. (2011). Strategy Safari: The Complete Guide Through the Wilds of Strategic Management. Financial Times / Prentice Hall.
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