This report provides insight on Kraft Foods Group based on their spin-off from Kraft Foods Inc. Creating two separated publicly traded companies Kraft Foods Group and Mondale Into. In the process Kraft Foods Group has developed a business plan and strategy to overcome its new position as an independently operating entity. In this report Kraft Foods Group’s position will be analyzed internally and externally by examining public information provided by its corporate website and additional preferences found to be available.
As a result performance evaluation will be developed identifying the company’s strengths, weaknesses, possible opportunities and likely threats that could occur. The report finds that even though this company has been newly formed that it is supported by age and reputation that it can rely on. This company has multiple strengths based on long history of product brands and customer satisfaction. However due to the nature of the products there are threats that must be identified and understood. A SOOT analysis will identify areas of concern and possible areas of growth.
Introduction Kraft Foods Groups has 110 years of history in its product line however it is newly formed entity in which produces many products that consumers purchase on a daily basis. Due to its spin-off from its parent company in 2012 the company has had to evaluate its internal and external issues that can affect the company’s position in the market. If this should occur negatively not only will the company lose its position in the market, it will also lose revenues and decrease in value in its share prices.
This paper will represent current internal and external analysis based on information that I have attained through research, Kraft Foods corporate website and their financial reports filed with the SEC. Utilizing this information will allow a SOOT analysis to be formed so that the company’s risks may be identified and evaluated to best create an action plan and maintained focus on the vision of the company of becoming North America’s favorite food and beverage company.
In the process I will identify areas that are best practices as well as company weaknesses that could be considered areas that need evaluation. The paper will also identify opportunities hat Kraft may have available and capitalize on in the future or possible threats that may have to be overcome and turned into opportunities. Internal Analysis The internal analysis is to determine an organizations possible success for the future based on its current strengths and weakness.
In any company there are usually areas considered strengths or even best practices that can be developed and used to continue to support the competition against its competitors. At the same time weaknesses should be identified also so that a corrective action can be This exercise can develop into realizing what the competitive advantages are in place and how it positively positions the organization in the market. In doing so you can identify and focus on creating customer value which will lead to increase sales of products and services that creates added value for the shareholders.
One area that may be identified as an advantage for Kraft is its decision to split its grocery segment into two distinct divisions allowing the company to place increased emphasis on brand building and managing its product portfolio. This should allow or innovation, increased efficiency and maintain quality products for each division. It will be broken down into Meals and Deserts and Enhancers and Snack nuts. This will create leadership opportunities and increase employee opportunities in each division as they grow in sales and size.
So in the case of Kraft Foods Group the company as much strength that it has maintained even through the spin-off from its parent company. Strengths: * Wide range of iconic well-known brands such as Kraft, A-I, Planters, Capri Sun, and Valetta * Strong distribution System Innovative Ideas and products * Increasing consumer purchasing of package food products * Believe in community involvement (Humanitarian Aid, Fighting Hunger ; Encouraging Healthy Lifestyles, Promoting Volunteer Service to Drive Change) * Holds the No. And No. 2 market positions for many of the current products These strengths place Kraft Foods in a position to increase new products supported by the already influential brands that is in Karat’s arsenal, allowing for new customer segments to open allowing an increase in neutralized market areas. Have increased production of healthier option increasing support for lower sodium and less trans-fat products. All in doing so Kraft supports the community to fight hunger and the rebuilding of communities after natural disasters.
Weaknesses: * Some products have low margins * Product Recalls * Litigation (Saputo Cheese USA, Land O’ Frost) In the case with Kraft Foods some weaknesses are hard to deal with in the case of margins when the government, weather, and other issues can cause havoc on raw material costs. Then you there are requests for product recall or in the case off reticular lot number of nut that were recalled all have effects on the company’s bottom line and reputation.
Finally, excessive costs could be created due to litigation when it comes to court costs, lawyer fees, and travel if required all areas that need to be evaluated and a risk management plan put in place to minimalism such occurrences. Here I have outlined some of the areas that could be positive or potentially negative in the future success of Kraft Foods Group. These areas have been identified by completing a internal analysis of the company.
This is not a full list of threaten nor weaknesses but support the idea of the importance of an internal analysis. External Analysis and opportunities that exist in the outside environment from the company. A basic question to ask is would the threat or opportunity still be there if the company wasn’t and if you can answer that question with a yes answer then you have potential threats and opportunities to consider in the analysis of the company. These items need to evaluate to minimize the threats and to maximize the opportunities.
During your analysis you must take a panoramic evaluation of political issues, funding resources, the economy, future trends, and physical environment. These are Just some of the areas that you can draw information for making educated decisions for the company. Opportunities: * Greater focus on innovations * Increasing understanding of being good stewards of natural resources * Increased health and ethnic awareness * Due to changes in life styles and time management in families packaged and processed foods are used more frequently.
These opportunities may be evaluated by the organizations and be used to make adjustments to the strategic plan to capitalize n areas that are currently considered niche markets or neutralized in the grocery and beverage arena that could increase market share and product awareness. Where there are opportunities there are also threats that could cause damage to any corporation. Threats could be due to the weather, people from outside of the company, changes in laws and other issues that would or could still occur in the environment if the company did not exist.
Threats: * Chemicals such as dyes that are used in food could be deemed harmful after years of use * New competitors emerging into the market as well as the strong ones eke Nestle and PepsiCo. * Chemicals on crops that could lead to product recalls These threats are all areas that must be monitored closely. In the case of competitors if Kraft cannot continue to innovate and bring new creative products that the consumers find value in the competitors may create something taking Karat’s customer base and loosing loyal customers.
Currently Kraft Foods is in litigation over dyes Yellow #5 and #6; many countries have already passed laws to eliminate these chemicals from products since studies have been found to possibly cause cancer. Known families that have lost children to cancer may go to a competitor if they feel that these dyes cause cancer and the competitors make similar products that do not contain the Yellow #5 and #6.
Conclusion Overall Kraft Foods Group has many iconic brands that have been able to support the company’s position for many years and it is reflected in the financial records produced to the SEC. Many of these brands make from 5 million to 100 million dollars annually these funds could help Kraft look into innovations, new marketing techniques and even distribution methods. Currently Kraft has numerous strengths hat can help guide into future endeavors, and weakness can be evaluated to be solved or even turned into an opportunity for future achievements.