Comprehensive Strategic Analysis of Kraft Foods Corporation Report

This report offers a comprehensive strategic analysis of Kraft Foods, a major player in the food processing industry. It begins with an overview of Kraft's business, industry, and key competitors, including Nestle and PepsiCo, and examines the general business environment, including political, economic, social, technological, environmental, and legal factors. The analysis then delves into the market structure, identifying Kraft as operating under perfect competition, and utilizes Porter's Five Forces model to assess competitive pressures. Internal analysis includes a detailed examination of resources, capabilities, core competencies, and value chain analysis to determine competitive advantages. The report also explores competitive dynamics, including first, second, and last mover strategies and competitive actions. Finally, the report touches on merger and acquisition strategies, providing a holistic view of Kraft's strategic positioning and operational dynamics.

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.