Amanda Kluszczynski
Strategic Business 59-620B
Eveanne Lovero
Kraft Questions
March 12, 2015
1. What is Kraft Foods Inc.’s corporate strategy? How has its corporate strategy evolved since its independence in 2007?
Kraft has a strong global strategy. They found themselves operating in more than 80 countries, which included 220 manufacturing and processing facilities and 228 distribution centers. Because of the different regulations in each country related to food, they found themselves in need of several different facilities for the manufacturing of their food products.
By 2007, Kraft was the 2nd largest processed-food company. The company continued to acquire and divest business units that were either extremely profitable or not
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Brand building, consumer health and wellness, and advertising and promotions were all critical to success in the industry. Kraft’s ability to compete with lower priced snacks showed its ability to differentiate itself from other lower priced competitors.
It is clear that the industries Kraft participates in are ever growing, both as populations increase and Westernization increases in other countries.
3. What is your assessment of the competitive strength of Kraft Foods’ different business units?
Kraft is clearly a strong competitor, as they remain one of the top contenders in each of their industries. They are able to strongly differentiate their products from those of other companies to capture a large share of the markets they participate in. They have a wide array of products that can serve as subsituties for each other to keep consumers within their brands, but give them options on which products to consume.
4. What does a 9-cell industry attractiveness/business strength matrix displaying Kraft Foods’ business units look like?
Business Strength
Strong
Medium
Weak
Market Attractiveness
High
Protect Positions
U.S. Snacks
Invest to Build
U.S. Conenient Meals
U.S. Grocery
Build Selectively
U.S. Beverages
Medium
Build Selectively
U.S. Cheese
Manage for earnings
Limited expansion or harvest
Low
Protect and refocus
Manage for earnings
Divest
5. Does Kraft Foods’ portfolio exhibit good strategic fit? What value-chain match-ups
The Kraft Company has been around for a long time now. Personally I believe you must have a protective firm, not allowing other companies to steal your ideas and product. This will give the firm advantage over others.
The business has been profitable and has been able to gain a large market share because of those strengths.
The second force that I will use to analyze the Trader Joe’s company is the “the rivalry among established competitors”. Factors to consider when looking at the rivalries in the industry are industry demand, cost conditions, and exit barriers. Trader Joe’s competitors include The Kroger Co., Whole Foods Market, and Safewat Inc., and all super markets in general (Llopis, 2011). With that said, there seems to be a high demand for what Trader Joe’s offers, private labels. This means that the intensity in the industry is less compared to an industry with a flat demand. Trader Joe’s does not have to fight hard to sell their products because of the service they have created. Trader Joe’s brand can be considered “diversity on steroids” which has somewhat of a cult following among consumers (Llopis, 2011). Consumers that want unique experiences with their food are able to do exactly that at
With giants such as Walmart, and Kroger running the grocery store industry it’s difficult for companies such as Smuckers to bargain for shelf-space and prices. Brand name items drawn to the center of the store are what leverages these companies to succeed in the industry. After numerous acquisitions and strategic alliances, Smuckers developed a solid core of product lines which experienced success rapidly. Product lines that experienced the most success as a result of strong positioning in the industry included their Coffee labels, flour and baking products, Oils and food spreads. A 9-Cell Industry Attractiveness/Business Strength Matrix shows that the Industry attractiveness is relatively moderate. With many competitors and strong buyer power from large grocery chains such as Kroger, companies such as Smuckers have explored different strategies that have proved successful in what can be described as a saturated industry. The case insinuates that there may be opportunities in the industry in regards to special markets and perhaps Oils and Baking with sugar free products, but otherwise the recession, although it drove families to buy store bought as opposed to eating out, has had its effects on the food service industry as well.
1. How would you characterize the snack chip category and Frito-Lay’s competitive position in this category?
1. What is Panera Bread’s strategy? Which of the competitive strategies discussed in Chapter 1 most closely fit the competitive approach that Panera Bread is taking? What type of competitive advantage is Panera Bread trying to achieve?
3. Describe the competitive strategies used by each of Williams-Sonoma’s competitors. Which of these are most effective?
3. What are the main threats to Trader Joe’s competitive advantage? Is their advantage sustainable?
Kraft Foods Inc., (Kraft Foods) manufactures and markets snacks, confectionery, and quick meal products worldwide. Kraft Foods is number 1 US food company and number 2 worldwide. It is principally engaged in manufacturing and marketing of packaged food and beverages. The various products offered by the company include cheese, dinners, dressings, coffees, meats, biscuits, cream cheeses, powdered beverages and chocolates. The company markets its products under the brand names of Kraft, Maxwell House, Oscar Mayer, Oreo, LU,
This results from the fact that it is a mature segment with many well established companies vying for market share. The industry is highly consolidated and very fragmented. To grow their businesses, companies rely heavily on mergers and acquisitions to capture additional market share. Historically, the grocery industry has been characterized by slow growth which results in strong price competition and the development of aggressive marketing campaigns between existing firms. Perceived product quality and strong brand recognition by consumers are the basis of competition among firms in the industry. The source of General Mills’ competitive advantage lies in its ability to develop innovative products and highly reputable brands. As a result, they hold cost leadership positions across a number of grocery categories. Exhibit 1 shows the top US companies according to their sale of packaged foods globally. Market leaders include Kraft Foods, PepsiCo, Nestle, Mars, Kellogg, and General Mills, however, neither company possess an overwhelming share of global sales. This is in part due to the large degree of product diversity throughout the industry and the strong brand rivalry of each competitor’s labels.
The case focuses on Kellogg’s Special K brand and considers how the marketing of this has changed over time. Marketing is not static – it must be developed as market conditions and customer expectations change.
1. What is Costco’s business model? Is the company’s business model appealing? Why or why not?
The majority of the specialty food market grew between 2012 and 2014, with an overall growth of 19.2 percent. The specialty food industry has been the fastest growing segment of the overall food industry.
This case study chronicles Unilever efforts at restructuring, divesting, acquisition, and general streamlining of its worldwide operations. These operations, in 2000, encompassed 1,600 brands in 88 countries. These products are mostly food, personal care, and household products. Around that same year, Co-chairmen Niall FitzGerald and Antony Burgmans decided that Unilever needed to make some rather drastic changes in order to remain competitive. More importantly that competitiveness was the importance that the company maintained ever increasing profitability. The co-chairs planned to bring about this much needed change via institution of an ambitious 5 year plan. This plan was dubbed the “path to growth” strategy.
Kraft is the largest branded food and beverage company in North America and the second largest in the world. It operates in more than 150 countries worldwide. Kraft Foods markets the world's favorite food and beverage brands in five product sectors namely the snacks, beverages, cheese and dairy, grocery and convenient meals.