Kraft Foods Case Study

GET HELP INSTANTLY

Place Your Question Here

Kraft Foods Introduction

Referring to an increase in the market competition, it has become very essential for business enterprises in America to improve their business activities, analyse the market conditions and thereby gain targeted goals associated with business successfully. SWOT and PESTLE are the two most important frameworks by the help of which the internal as well as the external market business conditions could be effectively assessed. The study focuses on the case of Kraft Foods for analysing the market conditions of America and its influence over business functions of Kraft foods to enable it to gain a competitive edge in the food industry globally.

Fill the table

Company Name

Kraft foods

Type of industry

Food and beverage

Headquarters

Chicago, Illinois

Sales/Revenue

18.218 billion USD

Area served

Worldwide

Number of stores

Multiple stores in 200 nations

Competition

McCormick &Company, Mondelēz, and Keurig Green Mountain, Hain Celestial Group

USP

World’s biggest company as well as processed food brands

Target Group

All age and income group

Products

Snack foods, convenience foods, dairy foods, cheese and beverages.

Website

www.kraftheinzcompany.com

Table 1: Details of Kraft foods

(Source: Kraftheinzcompany.com, 2019)

Kraft Foods Swot Analysis

Strengths

Weaknesses

  • Successful mergers
  • Popular brands
  • Broad channel distribution across US
  • Wide portfolio of product
  • Too much of products
  • Poor presence at Europe
  • Poor business presence at organic market
  • Decrease in sales growth

Opportunities

Threats

  • Change in consumption patterns
  • Improving presence in Europe
  • Scope of expanding business in India 
  • High competition
  • Cost fluctuation

Table 2: Swot analysis

(Source: Kraftheinzcompany.com, 2019)

Strengths

As per the case of Kraft Foods, it has successfully expanded its business activities by having business mergers with top food processing brands in America such as Heinz, and Cadbury’s. Such successful mergers have made Kraft foods improve its brand and achieve a competitive edge in the food processing market. It also possesses a strong base of skilled employees of 126000 in number. As per the case study of Kraft Foods, the popularity of its brands such as heinz, cadbury’s Oscar Mayers, Maxwell house and others has enhanced its reputation in customers’ mind (kraftheinzcompany.com, 2019). It deals in wide products variety which extends to salad dressings, desserts, packaged meals and many more.

Weaknesses

As Kraft Foods is having poor business presence in European and organic market, it is obstructing the company to successfully expand its business. Possessing too much of brands is obstructing Kraft foods to effectively manage the products and provide innovative services to customers, which also leads to a reduction in sales growth (Phadermrod et al. 2019).

Opportunities

As India, predominantly is an agricultural industry and having a stable business market, as per the case study of Kraft Foods, it will be easy for it to procure the raw materials at a lower cost and produce commodities effectively to provide excellent services to customers and improve business position in India. As per the case study of Kraft foods, customers are now becoming accustomed to pre-processed food which is an opportunity for the company to gain a large amount of customers through supply of pre-processed items such as cheese and others.

Need Full Solution?

Request a FREE quote now!

Ask Now

Threats

As per the case of Kraft Foods, it faces an intense competition with many popular brands under food industry such as GSK, Beecham, Procter and Gamble and Nestle, which obstruct it to enhance its business operations successfully, enjoys large customers’ base, maximise sales revenue and expand business successfully into new markets (White et al. 2018). As per the case study of Kraft Foods, it faces high threats in the irregular changes in the price of raw materials required for food processing, which obstructs in managing total costs of Kraft foods and decreases its sales revenues and profits.

Kraft Foods Pestel Analysis

Political factors

  • Corporate lobbying
  • Political engagement

Economic factors

  • Effect of inflation and changes in foreign currency
  • Strong growth in GDP in foreign market

 Social factors

  • Rapid shifts in taste of along millennials

Technological factors

  • Improvement in insight of supply chain through technology

Legal factors

  • Heavy government insights
  • Strong compliance of labour practices such as Fair Labour Standards Act 1938 and transparency in supply chain

Ecological factors

  • Initiative towards promotion of food security

Table 3: Pestel Analysis of Kraft Foods

(Source: Influenced by McDONALD, 2016)

Political factors

American government enjoys a strong political stability which encourages Kraft foods to expand its business successfully. Strong FDI structure in US enables the company to carry out business activities and provide effective services to the customers worldwide. As per the case study of Kraft Foods, it takes active participation in the dialogue of public policy for putting forward perspective related to labour issues, product safety, trade tax and other matters which has a positive effect on its business.

Economic factors

US are ranked as the largest economy across the globe in terms of GDP. This has helped Kraft Foods to expand its business, increase productivity and provide excellent quality services and products to the customers. As per the case of Kraft Foods, recession in the years 2009 has created a massive influence over business growth of companies such as Kraft Foods, Coca Cola, and so forth.

Social factors

Customers in the US are becoming more accustomed towards consumption of pre-processed processed and items such as cheese and others. As per the case study of Kraft Foods, it creates a significant impact on the business activities of Kraft Foods by supplying the services demanded by the customers and increase their satisfaction level to achieve a competitive edge in the food industry (Trejo Pech, 2018)

Technological factors

With the development of technology in US, it becomes easy for the business organisations under food industry such as Kraft Foods to implement effective technologies related to supply chain in order to provide quality products to the customers and at the right time. However, implementation of the technologies involves large amount of time and cost consumption, ineffective management of which could negatively affect the business.

Legal factors

As per the case of Kraft Foods US government is very strict towards compliance essential laws such as Data protection Act 2019, Fair Labour Standards Act 1938 and other related laws which create troubles for the organisation to provide effective training to the employees for taking precautions towards effective compliance of the laws (Akter, 2019).

Ecological factors

As per the case Study of Kraft Foods, it effectively complies with the CSR laws as well as regulations in order to ensure a sustainable environment and effective sustenance of its business in the long term.

Reference List

Akter, M., (2019). Internship report on a study of Food Products and Beverage Industry.

kraftheinzcompany.com, (2019). About the Company. Available at: www.kraftheinzcompany.com [Accessed on 12th August, 2019]

McDONALD, M.A.L.C.O.L.M., (2016). Strategic marketing planning: theory and practice. In The marketing book (pp. 108-142). Routledge.

Phadermrod, B., Crowder, R.M. and Wills, G.B., (2019). Importance-performance analysis based SWOT analysis. International Journal of Information Management, 44, pp.194-203.

Trejo Pech, C.J.O., (2018). ConAgra Foods: valuing a potential recipe for success. OPENAIRE.

White, S., Trejo-Pech, C. and Noguera, M., (2018). ConAgra Foods: valuing a potential recipe for success. International Food and Agribusiness Management Review21(5), pp.595-608.

GET 20% OFF On your first Kraft Foods Case Study Order Now

whatsApp
whatsApp