RUNNING HEAD: CASE ANALYSIS PAPER – KRAFT FOOD INC
CASE ANALYSIS PAPER – KRAFT FOOD INC
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CASE ANALYSIS PAPER – KRAFT FOOD INC
A BRIEF INDUSTRY HISTORY BACKGROUND
Kraft food is a company that deals with making foods and it has many brands that are in different states. It is a United State based company and distributes it products to different countries since it is an international company best known for cheese brand as pointed out by Kraft food Inc, (2011). The company has provided jobs to many people since it is a big company and also it operates in different countries. In the year 2010, the company had approximately 127,000 employees.
The Kraft food company is among the largest food companies in the world and in the United States. It has been ranked second in the world behind the Nestle Company. The company has two operating systems which are Kraft food North America and Kraft food International. The brands that are produced by the company are in five main sectors and they include snacks, beverages, cheese, convenient meals and grocery. The products from the Kraft foods are sold in more than one hundred and fifty countries and the company owns more that two hundred and twenty facilities that are used for manufacturing the products.
The Kraft Company was amalgamated by Philip Morris companies Inc which was a tobacco giant in early 21st century. The company acquired the general food corporation in 1985 and Kraft Inc was acquired in 1988. Until early 1995, Kraft and Kraft general foods worked separately and were merged into Kraft food in 1995. In 2001 a part of the Kraft food was sold to the public and the rest of the shares were retained by Philip Morris.
THE STRATEGIC, INTERNAL CAPABILITIES (STRENGTH AND WEAKNESS) OF KRAFT FOODS
Strengths
Kraft Company has strengths that are attributed to it and one of the strengths is that it enjoys the image of its brand. This has been an internal capability because it has been known for product innovation and many people go for the brand as suggested by Kraft foods, (2010). The company has a strong distribution network because of different branches in different countries. Another internal capability is that the company focuses on development and research.
The company enjoys the strength of having business scale and financial strength because of its size and it has been positioned in the key food categories and so it is stable in the industry. The brands that are manufactured by the company vary in a wide range and they are the leading brands which gives the company a good position to maintain the brands. It has been the second large food company and the revenues are approximately $ 50 billion as stated by consumer packaged Goods swot, (2011), which gives the company the financial strength. The sale of its products to more than one hundred and fifty countries is one of the strength in that it has been known as a global company and has revenues from the markets that emerge globally.
Weaknesses
One of the weaknesses that have been attributed to the company is that the profitability rate is declining due to the fierce competition that the company is facing. The competition is from two main companies that deal with the foods and they are Nestle and Hershey. Due to the services that are provided by the company and the poor working practices as argued by Elizabeth, (2010), the confidence of the consumers in United States is falling which might affect the company and the sales level.
Even with all the strengths that are attributed to the company and the wide range of brands, the company has had weaknesses in being unable to launch new brands as indicated by Company spotlight, (2009), and they use the existing brands. The growth of the company does not depend on opening new companies but they depend on the new markets that are expanding and the acquisitions. The stock performance of the company has been poor leading to a very low rate of growth in the United States markets.
Current and subjected characteristics of the environment (opportunities, threats, and trends) in which the organization functions, including competitors and all other environmental entities
The Characteristics of the environment that surrounds the Kraft food providers is that there are threats that have been building in the recent years. One of the threats is due to competition from other companies who are their competitors and they produce less expensive brands that are similar to their brands and they challenge the market share of the Kraft’s brand.
As illustrated by Daft and Marcic, (2009), the company has been receiving competition from other major companies which respond quickly to the needs of the consumers by producing foods that are more healthful, and less fattening. Another threat that is being faced by the company is that most people do not cook lunches but they eat ready made foods. The opportunities that surround the company are that there are new emerging markets and the trends show that comfort foods and food snacks are being looked for by the Americans. The company has been associated with comfort and so this is an opportunity by the company to expand the business. Other current characteristics that surround the business is the lawsuits that have been filed against it and the company lost a lawsuit due to pollution problem.
References
Company Spotlight: Kraft Foods. (2009). Market Watch: Food, 8(11), 53-60.
Consumer Packaged Goods Swot, (2011), Consumer Packaged Goods (CPGs) >> Kraft Foods SWOT Analysis: (Online), Available from http://www.wikiswot.com/SWOT/3_Consumer_Packaged_Goods_(CPGs)/Kraft_Foods.html Viewed on 7 June 2011
Daft, R, L., Marcic, D., (2009), Understanding Management, pp 150 – 243
Elizabeth, R,. (2011), Expedition: The Kraft Issue, (Online), Available from, http://rosalilium.blogspot.com/2011/05/expedition-kraft-issue.html Viewed on 7 June 2011.
Kraft foods, (2010), creating a more delicious world, (Online), Available from, http://www.kraftfoodscompany.com/home/index.aspx Viewed on 7 June 2011.
Kraft food Inc., (2011), Kraft food Inc business summary, (Online), Available from http://finance.yahoo.com/q/pr?s=KFT+Profile Viewed on 7 June 2011.
