Strategic Management of Krafts Food

This presentation provides an overview of the strategic management of Krafts Food, an American food manufacturing organization. It covers topics such as competitors, pricing policy, Porter's Five Forces model, internal analysis, core competencies, and value chain analysis. The presentation also discusses merger and acquisition strategies in the food processing industry.

STRATEGIC
MANAGEMENT
KRAFTS FOOD

KRAFTS FOOD
• American food manufacturing organisation
• confectionery, food and beverage conglomerate
• Brands in more than 170 countries
• Headquartered in Northfield, Illinois, a Chicago suburb

INDUSTRY
• Krafts food comes under food processing industry.
• It associates raw food ingredients to make marketable food
commodities which is easily produced and serve by customers.

Competitors
• Nestle
• PepsiCo
• Anheuser-Busch InBev
• Coca cola
• JBS S.A
• Archer Daniels Midland Company
• Unilever
• Mars Inc

General business environment
POLITICAL in the United States which help the organization to establish its business in a
appropriate manner.
taxes, tariffs, political stability support Kraft foods to gain effective profit in
market.
ECONOMIC Current Gross Domestic Product, inflation rate and Gross national product support the
Kraft corporation to expand its business activities in the market.
SOCIAL Income as well as lifestyle help the Kraft corporation to gain better profit by providing
effective products and services to consumers in the market.
TECHNOLOGICAL better communication facilities like internet and efficiency of food manufacturing play
important role for Kraft to manage its internal and external operation
ENVIRONMENTAL health safety, employment polices and other rules and regulation compel the Kraft
corporation to increase expenditure which decreases its profit in the market.
LEGAL Kraft corporation does not manufacture any kind food products which are harmful
environment and people health. So these factors support to manage its business
operations in the food processing industry.

PRICING POLICY
Organization uses pricing taking policies because;
• there are many food processing companies which sell similar
products in the market.
• Kraft is not holding leading position in the same sector.

PERFECT COMPETITION FACED BY
KRAFT FOOD
Kraft corporation is come under perfect competition market
structure because;
• There are many buyers and sellers in the market.
• Competitors like Nestle as well as Pepsi Co also affect its
profits and operations of corporation in domestic and
international market.

Porter Five forces model
Factors Level of
competition
Description
Threat of new entry Medium Generally, it require higher budget and investment which create issues for new corporation in the
food processing industry.
Threat of substitution Low Mainly, Kraft corporation develop effective quality products for consumers in affordable price
which reduce issues. In addition to this, organisation also find out information about its new
competitors products in the market.
Level of competition High Level of competition is high very due to presence of domestic and international competitors
which sell food products in lower prices as comparison of Kraft organisation.
Bargaining power of
Suppliers
Medium Organisation has many suppliers which provide quality raw material and effective services to
Kraft corporation in the market.
Bargaining power of
consumers
High Due to existence of many rivals, bargaining power of consumers is higher. There are many other
organisations available which provide quality material in lower prices.

Competitor environment
Competitor environment contribute effective role for management
of Kraft to develop effective competitive strategies in food
processing industry. Some of factors are;
• Analyzing market commonality
• Analyzing competitor strategies

Strategic group
Groups of companies in the same industry that follows business
models or combinations strategies to manage its business
operations.
• Regionally focused brand line producers: Dairy farmers of
America, Hill shire Brands, Flower foods
• Global brand line procedures - Nestle, Pepsi corporation, coca
cola
• Global suppliers- Sonic boom, Navistar, Tootie pie, Enval, Six
flages

Q. 5 Internal analysis
• Resources
• Capabilities
• Core competencies
• Discovering core competencies
• Value chain analysis
• Competitive advantages
• Strategic competitiveness

Resources
Tangible resources:
• Tangible resources are visible and these assets aids Management of Kraft
corporation to manage its manufacturing and other operations in the market.
• For example, organisation has land, machineries and employees which help to
manage its business activities.
• In addition to this, these tangible resources support the corporation to increase
its growth and marker share providing effective services.
Intangible resources
• Intangible resources are non-physical and they also aid the Kraft corporation
to handle its business activities in the market.
• For example, Copyrights, patients, Licensing agreements, service contracts as
well as brand value are intangible resource.
• These play important role for corporation to manage its productions and other
business operations in food processing sector.
• Further, intangible assets also helps to increase its performance and efficiency
in the market.

Capabilities
• Ability to conduct or get specific activities and results with
help of controllable and measurable facilities and functions.
• Production, financial, human resource, operational capabilities
are effective which provides better opportunities to gain profit
and revenues from consumers,
• Management of Kraft improve its capabilities through training
and development, new innovations and design new policies
and plans in the recent years.
• These efforts help the organisation to enhance its capabilities
as comparison of previous years.

Core competencies OF
KRAFT FOODS
Corporation is good in innovation strategies –
For better innovation, enterprise also hires effective and
experienced scientists.
This process helps the corporation to manufacture good food
products as comparison of its competitors in the market.
In addition to this, management of Kraft corporation also invest
effective monetary funds to innovate new products to increase its
profits in food processing industry.

Discovering core competencies
There are many criteria available which helps the Kraft
corporation to discover core competencies of organisation.
• Valuable
• Rare capabilities
• Imitable
• Non substitutable

Value chain analysis
Approach for organization to create effective possible value for
consumers.
• helps the Kraft to increase satisfaction level of consumers by
providing effective quality of products in food processing
industry.
• Value chain analysis divides the organisational activities in
primary and secondary category.
So these actions contribute effective role for management Kraft
to improve its overall operations at the workplace which help to
attain various type of advantages in the market.

Competitive advantages
• Management of organisation can procure rivals benefits by
developing effective strategies.
• Kraft can get competitive benefits on the basis of innovation
techniques for development of effective food products.

Strategic competitiveness
• One kind of strategy which is used to develop long term plans
to achieve organisational goals in the market.
• It also play important role for management of corporation to
achieve competitive which help to increase sales of food
products as comparison of its rivals in the market.

COMPETITIVE DYNAMICS
• Strategy of competition at the activity and response level which help the
management of corporation to react against competitors in the market.
• provides better guidance to Kraft corporation for implementing
competitive strategies in food processing industry.
• First mover
• Second mover
• Last mover
• Type of competitive actions
• Generally competitive action is divided in strategic and tactical actions in
the market. Strategic activities helps the corporation to achieve strategic
response by developing effective plans. On the other side, tactical action
aids the Kraft to get tactical response by implementing designed activities.
• Market dependence
• Kraft Organization is also dependent from market because profit
and revenues are generated from market.

Organisation size:
• Corporation size of corporation is very high due to presence in
many countries.
• In addition to this, management of Kraft is expanded all
developed countries like UK, France and Germany.
• Organisation have staff members 126000 to manage its
operations in many countries.

QUALITY
Kraft organization also provide quality food products by using
continuous innovation strategies which attract its consumers to
purchase its products.

Q.7 Merger & Acquisition strategies
• Horizontal acquisition: By acquiring similar company in same
industry is called horizontal acquisition.
• Vertical acquisition: Enable the organization to integrate its
supply chain in the market.
• Related acquisition: It can be defined as the activities in which
organization can acquire other corporation with similar
business/culture size/ technology/ to increase its product and
service offerings in the market.

THANK YOU