Market position and strategy for KRAFT FOODS INC

Harmonizing to Drucker, the vision replies to the inquiry: ‘what do we desire to go? ‘Kraft Foods ‘ Mission Statement attempt to depict the house ‘s vision for the hereafter:

‘Helping Peoples Around the World Eat and Live Better. ‘

The house justifies the vision stating that this sentence captures the kernel of who the house is.

It shows trough this sentence that the house cares about client ‘s life and needs easing the cook in the day-to-day life in order to offer more clip to the clients to make what they want and besides to assist them to easy eat in a more healthy manner.

Harmonizing to Kraft web site:

‘We ‘re invariably looking for fresh thoughts to better our workplace, our partnerships, our communities and our universe.

To do today delightful, we begin with our consumers.

We listen, we watch and we learn.

What we do.

We make delightful nutrients you can experience good about.

Mission

Harmonizing to Drucker, the mission replies to the inquiry: ‘what is our concern? ‘

The mission statement consists of three words harmonizing to the Kraft Foods Inc. Web site:

‘Make today delightful. ‘

Their mission reflects who they are, merely like the vision. They refuse to restrict the house to be merely a concern that sells nutrient and seek to run into consumers ‘ outlooks and doing nutrient an easier, healthier, more gratifying portion of life.

Kraft Foods underlines the importance of wellness and health and besides embodies all the ways we can eat and populate better, eating easy and rapidly in an environment of safety thanks to the Kraft ‘ services.

Valuess and rules:

Harmonizing to Kraft ‘s web site, the house uses values and rules to pass on clients what they can anticipate of the trade name and to show their leading, because they want to be recognized as a taking company able to pull clients and workers through thoughts like:

InnovationA – Satisfying real-life demands with alone thoughts

QualityA – Carry throughing a promise to present the best

SafetyA – Guaranting high criterions in everything we make

RespectA – Caring for people, communities and the environment

IntegrityA – Making the right thing

OpennessA – Listening to the thoughts of others and promoting an unfastened duologue

They put consumers foremost because they want to strength the Brand Value propositions and new merchandise inventions to drive faster top line growing.

They work merely, listening to the clients, but act rapidly to increase the velocity and flexibleness in order to cut down costs for reinvesting in “ doing celebrated ” the trade name & A ; happening the right balance between the concern ‘ and the employees ‘ demands to guarantee that the work environment is flexible and supportive.

Schemes

Harmonizing to Kraft ‘s Web site, the house seeks to go a immense bites powerhouseA and matchless portfolio of trade names people love, eat and purchase.

Harmonizing to an article of News Bites US Markets, 2010:

‘The trade names of the Company span five consumer sectors: bites, drinks, cheese, food market and convenient repasts ‘

As advised by F. David, Kraft focuses its scheme on the complementary nature the company ‘s portfolio which is supposed to take the trade name ‘s growing: Delight planetary bites consumers.

A The universe ‘s Consumers are looking for on-the-go options because they are ever in late for something in work or merely life. They ‘re besides looking for simple indulgences and healthier options, which is a paradox because people do n’t hold clip to cook in a healthy mode but they have to be healthy for the work and thin in the day-to-day life.

Therefore, Kraft provides delightful bites to these consumers, likeA LUA biscuits or health merchandises in order to run into their outlooks.

These iconic heritage trade names are loved by consumers all around the universe, harmonizing to a Nexis Beginning: ‘Roughly 80 per centum of these heritage trade names hold figure one or figure two places in their several classs and are household names. ‘

In a leading province of head, the house considers that, to win the market, the trade name has to win on every degrees of the concatenation: from the consumers to the providers.

So, harmonizing to Fred David illustration pg 104, to win, the house counts on its values ( explained in the mission statement ) like safety, regard or quality and particularly on the fact that the trade name acts like an proprietor, unfastened to the treatment but who decide at the terminal.

Through this image, Kraft besides entrust the stockholders, and offers them interesting returns on their investing like:

Organic grosss growing of 5 per centum or moreaˆ¦

Mid- to high-teens marginsaˆ¦

And EPS growing of 9 to 11 per centum, harmonizing to the Kraft Foods Web site.

Harmonizing to F. David, Kraft ‘s Current Strategy for 2009 planned to germinate trough a ‘turn-around procedure ‘ in order to follow the illustration of the sustainable growing. The consequence of the operation was that a batch of nest eggs had been made due to the simplification of organizational construction and some shutting.

The external and internal audit

The PESTLE

Political

The stableness of the political environment

Harmonizing to K. Blanchard, 2009, the lessening in company ‘s consequences is due to foreign currencies, it could besides be linked to the rising prices and glide of natural stuff and crude oil.

Local revenue enhancement

Kraft in based in Switzerland, in Zoug, this country is appreciated for the low rate of revenue enhancement. For illustration the income revenue enhancement represents less than 16 % of the benefits of the company. ( F. Therin, 2010 )

Government involved

Irene Rosenfeld declared in an interview of David Lieberman in 2010, ‘I do n’t believe there ‘s any indicant that holding the authorities involved will needfully do that a more effectual procedure or have the desired result. There ‘s ample grounds that we can in fact work together in a productive manner, and that ‘s a more effectual manner to turn to the issue. ‘ This reply illustrate that the authorities is neither apart from the policies of the company nor influencing schemes.

Social public assistance policies

Harmonizing to the Right vision intelligence, 2010, ‘People for the Ethical Treatment of Animals has been purchasing portions for seven old ages and now owns a piece of at least 80 companies, including McDonald ‘s and Kraft Foods. It hopes to act upon their carnal public assistance policies on such things as how poulets are slaughtered or purchasing porc from providers that keep pregnant sows in little crates. ‘ That means Kraft should take societal policies into consideration as it appears to be relevant in people mind and consumer behavior.

Economic

Interest rate

Harmonizing to an article of the Business Wire, 2010, ‘Food companies continue to seek acquisitions and organic growing, peculiarly in the BRIC states ( Brazil, Russia, India, and China ) , to hike their overall growing rates. Proactive refinancing of upcoming debt adulthoods is likely to go on since companies are able to publish new debt at really low involvement rates. Debt decrease is non likely except for Kraft and Ralcorp Holdings, Inc. , since both companies increased purchase materially for acquisitions in 2010. ‘

Degree of rising prices

‘Northfield-based Kraft and ConAgra, two large porc manufacturers, have both raised their monetary values in recent months because of the market addition. ‘ Janet Kidd Stewart explains this addition in 1996 by the rising prices. As a nutrient, bakeshops, and biscuits manufacturer Kraft is really reasonable to the rate of natural stuff, maize, milk, flour, eggs.

Employment degrees

Harmonizing to Ellen Simon, 2006, when Kraft Foods bought Nabisco, 25 % section was laid off on the same twenty-four hours in 2004.

Long term chance

In a Just Food article, 2009, The Unite brotherhood, which represents Cadbury workers in the UK and Ireland, seems to be concerned that Kraft would non sufficiently put in the long-run chances of the concern and its trade names as it looks to cut down costs to serve debt.

Exchange rate

Adapted from what Timothy McLevish ( Chief Financial Officer ) said in the Earning conference call in November 2010, Kraft Foods has a really complex portfolio of currencies, which explains why they are less wedged by merely a diminution in the value of the dollar or an grasp of the dollar because we have a batch of our input costs.

Sociocultural

Lifestyle tendencies

In this portion we have to take into history the issues of fleshiness, deficiency of athletics, wellness, organic merchandises, and natural medical specialty. Harmonizing to Kristopher J. Blanchard, 2009, the rate of fleshiness in Canadians male childs increased from 11 % in 1980 ‘s to over 30 % in 1990 ‘s, and from 4 to 14 in Brazil. Those tendencies represent an chance for Kraft.

Demographics

With the current population ripening, seniors represent a immense portion of the market, they consume healthy and diet merchandises. Unfortunately kids stay the mark of Kraft ‘s bakeshops and biscuits.

Consumerism popular attitude

Kraft involvement is following consumers ‘ wonts and accommodate their merchandises e.g. to acquire concentrated on nutrient conforming the regulations of faiths.

Work and leisure

Directors target new sections like bites, drinks, convenient repasts. This scheme fits with the sociological tendency that consists in blending clip for work or leisure with meal clip. That allows Kraft Foods to acquire concentrated into speedy and healthy nutrient incorporating fewer Calories or more vitamins to suits to any consumers demands. ( K. Blanchard, 2009 )

Technological

Degree of research

In 2007, Alexis Douglas trades with the new research installation of Kraft Food based in Asia and the undermentioned schemes engendered.

‘The research centre will:

service as its regional hub for nutrient merchandise and development service for its Asia units

include a pilot works and packaging research lab for proving new merchandises and packaging stuffs

aimed to do the research installation a centre for excellence in developing drinks ‘

Environmental

Environmental issue

Jonathan Horrell, corporate personal businesss manager put frontward Kraft ‘s deduction in environmental issue across the rhythm journey, which “ highlights the fact that we are taking a more active attitude towards environmental issues. ”

Ecological

The sustainable scheme of Kraft began with the natural stuff used, the methods use to bring forth, the transit and ends with the packaging and rubbish recycling.

Anterooms

Danny Fortson, 2010, wrote that ‘Greenpeace ‘s war against Golden Agri has been fierce. ( … ) Kraft Foods besides said that it will no longer purchase its palm oil. ‘ This can set frontward the influence of Greenpeace over houses.

Waste disposal

Jordan Ammann, 2009, ‘Fifteen months after its launch, Kraft Foods ‘ fabrication works in Bahrain is doing significant headroom towards its sustainability ends. The works has achieved decreases of 25 % in energy ingestion, 50 % in H2O ingestion and 16 % in waste from 2008. In 2009 the works has targeted a farther 5 % decrease based on its 2008 norm. ‘

Legal

Legal protections

Due to an Equal Employment Opportunity Commission ‘s matter in which Kraft was sued, the company ‘has agreed to develop directors on Torahs forbiding age favoritism. ‘ ( Reuters, 2002 )

Consumer Torahs, right to consumers ‘ merchandises, constituents

Harmonizing to Anna May Kinney, 2008, ‘During September 2000, Kraft Foods Inc. scrambled to remember greaser shells made from StarLink maize, a type of genetically modified maize unapproved for human ingestion ‘ . ‘While it ‘s true that the EU has approved some GMO harvests to be grown and sold, they have stood house in giving their consumers the right to cognize what they are eating and the right to take GMO nutrient or non-GMO. ‘

Internet

External sellers ( European ) , attracted because of the difference in rates between the dollar and the euro

Barriers to entry, low or non

The initial investing necessary, entryway fees, patents already in topographic point, criterions, protectionist steps, the image

Industry and established concerns, U.S are non celebrated for the health of the nutrient, so foreign houses more celebrated for this type of market like Sweden or China can come in in the market.

Cultural barriers, globalisation aid to wipe out barriers as nutrient tend to go a more international manner / tendency.

Porter ‘s five forces theoretical account

Menace of entryA : POTENTIAL ENTREY OF NEW COMPETITORS

Menace of entryA : POTENTIAL ENTREY OF NEW COMPETITORS

Environmental & A ; sustainability concern

Social duty

Economic viability

Many consumers are cutting back on their disbursement by exchanging to store-brand merchandises.

The power is strong when:

The clients are concentrated: a batch of consumers who want he same thing:

The providers are legion and dispersed

There are alternate sourcing ; ( Conagra )

The client changes providers, the cost of transportation is low Conagra, same monetary values, about same merchandises

There is a menace of upstream integrating from the client.

SuppliersA : Bargaining Power OF Suppliers

RivalryA among viing houses

1st rival: Nestle with international gross revenues whereas Kraft merely gross revenues in North America

( CON AGRA in the U.S market )

Heinz

SARA LEE

Restaurant, peddling machines, foodservice suppliers, are rivals excessively, even if the trade name is non strong/famous. ( alternate rivals )

Failing: Krafts do n’t bring forth beauty or others types of merchandises like Nestle or Conagra, whose are diversified ( beauty, petcare, ethanol… )

Changes appareas in the rivals scheme = & gt ; Conagra focuses now on nutrient, halt ethyl alcohol and fertiliser, this is a new menace because Conagra will be even more competitory in the precisely same market.

New CEO since 2005 for Conagra, GARY RODKIN, new force = & gt ; like a competitory advantage as a rival to ROSENFELD.

Foreign challengers: monopoly con Conagra in the U.S but rivals besides outside of the state,

furthermore, the $ become progressively high which is non good for the market because external merchandises could be seen as cheaper.

The high monetary value of gasoline which up the value of natural stuff, give strengh to the providers = & gt ; bad thing for the industry which have to confront a loss.

A low figure of providers: a strong trade name

Very speficic / diferenciated merchandises are facts that increases the monetary value of the alteration of providers, so increases the providers power excessively.

BuyersA : Bargaining Power OF Consumers

SubstitutesA : POTENTIAL DEVELOPMENT OF SUBSTITUTE PRODUCTS

WellnessA and wellness / fleshiness

Generic green goodss

Retailer trade names

Jobbers

Cooperatives

When the monetary values are increasing good for the subsitute because it will be more attactive.

Porter ‘s value concatenation

The support activities

Net income MarginAdministration

agencies substructure ( leading and direction ) and concerns the of import individuals of the construction

Human Resources direction

concerns the determinations made refering employees

Technology development

concerns the attempts and money invested for the hereafter of the house

Resource procurance

concerns the mode to happen a merchandise and provide the house.

Harmonizing to Fred David, this sort of administration can be explained by the fact that it took clip and attempts to follow the Phillip Morris plans, the house had to cognize several alterations, for illustration, the New CEO since June 2006 in Irene Rosenfeld which embodies the beginning of the opportunities in the house and she is now the president of the Board. This alteration is relevant because she embodies the caput of the house with her place.

Therefore, the direction squad is divided into 10 parts.

The primary activities

Inbound logistics

Operation

Outbound logistics

Selling gross revenues

Servicess

( Kraf Food Inc, 2009 )

The primary activities help the support activities to do their completion easier, like for illustration:

Inbound logistics

The Technology development managed by the section of Jean Spence can assist the Inbound Logistic by happening new natural stuff, or, harmonizing to the Kraft Munich web site, better new merchandises like in Munich, the responsible for Product and Process development where nutrient, Refreshment Beverages, Salted Snacks, Confectionery, Biscuits are ever improved ; or detecting an option to the job of the lifting monetary value of crude oil which increases the cost of the natural stuffs and besides the cost of transit.

Operation

Human Resources managed by Karen May can assist the Operations set uping a clime of trust and regard between employees in order non to decelerate down the production or avoiding the “ sicki ” consequence of a bad clime at work.

Outbound logistics

The Resource procurance can assist the Outbound logistics negociating new or more advantageous contracts, for illustration group rates can be an thought if several subordinates like Oreo, Lu etc will be delivered by the same conveyance ‘s house.

Selling gross revenues

In order to be “ proactive ” address the development of tendencies like the dining out tendency or wellness nutrient tendency, vitamined drinks tendency against the fleshiness, selling can be supported by the engineering development to develop new merchandises or to assist selling these merchandises with the cyberspace, because pulling web sites with games for subordinates like Oreo and The formula Box for Kraft itself help the trade name to be more human to sale more.

Besides, harmonizing to a News Bites US Markets papers of 2010:

thanks to the company ‘s one-year hebdomad of community service ( Delicious Difference Week ) organized by the Human Resource section, Kraft ‘s employees were a record Numberss to take part as voluntaries to assist the non-profit-making undertaking. This sort of action help the selling and sale section demoing to the clients how societal responsibly the house is.

Servicess

The Services section Focus on the repute and perceived value among the consumers, therefore, the disposal can be helpful taking the important determinations they have to be respectful, sensible and ethic. Harmonizing to F. David illustration pg 109, clients want the house to understand them and accept the societal duty, therefore, when the board temporarily shut down because of a hazard of taint, this action reinsure the consumer, heighten the positive image of the trade name and back up the Service section.

Trough the web site, Kraft tries to come closer to the clients ‘ civilization and societal individuality, to demo that as the people, the trade name is able to germinate and be concerned by the environmental jobs.

Internal strengths

A developed Strategy followed and understood by the employee, whereas Conagra has a vision, but no scheme and depends on operating companies and functional silos which is truly risked and it lacks of internal coherence.

So, more cleavage and prioritization than the rivals.

A developed Human resource direction section which aloud trust between employees & A ; house with some constructs like:

Policy of non favoritism, duty

Community Involvement

Conformity and Integrity

Peoples and Diversity

Workplace Safety

This clime of regard and trust give to the employees the will to work good and to be the tallness of the house ‘s outlooks.

A good and dynamic CEO /Chairman which has chosen a good organisation and repartition of the support activities.

Harmonizing to elements of the Kraft ‘s web site, Mrs. Rosenfeld besides helps to better the corporate Repute and Responsibility of the house and therefore aloud the house to have some awards like:

World ‘s Most Respected Companies, Reputation Institute – 2009 ( 3rd back-to-back twelvemonth )

Corporate Reputation Top 10 ( Canada ) , “ Selling ” magazine – 2009 ( 2nd back-to-back twelvemonth )

Ozone Layer Protection Award, US Environmental Protection Agency — 2009

Banksia Foundation Agriculture and Food Award for sustainability patterns, ( Australia ) – 2009

The New York Academy of Medicine awarded Kraft Foods for our long-standing committedness to wellness and health ( 2009 )

Adapted from hypertext transfer protocol: //www.zonebourse.com/KRAFT-FOODS-A-13256/actualite-analyse/Un-spin-off-a-surveiller-18414/ : International and Tough trade names ( Cote d’Or, Toblerone, Milka, Maxwell, Carte Noire, Tang, Jacques Vabre )

Strong advertizement trough old ages help Kraft ‘s nutrient to keep the competitory advantage: Harmonizing to F. David ‘s historic debut of the house, ‘A key to the success of Kraft Foods was James Kraft ‘s committedness to “ ” utilizing advanced advertisement methods ‘ . Now, this is steel an plus harmonizing to an article from the Lab Business Week, 2008:

The Kraft ‘s Director of Global Interactive Marketing has leaded some of the universe most successful and awarded digital stigmatization runs for the likes Altoids, Oreo or Planters. Because of this success the advertisement industry has recognized Kraft ‘s achievement esteemed awards like ‘Gold and Bronze Clio Awards ( C ) , a Webby Award, Silver and Bronze One Show Pencils ( R ) , a Gold EFFIE ( R ) , a Silver ADDY ( R ) , an ANDY Award, and a Cannes Lions. ‘

Internal failings

A low growing market and the impact of the trade good monetary values ( milk, java, chocolate ) which made the house less competitory harmonizing to Fred David.

The fact that Kraft is a immature house in comparing with the chief rivals like ConAgra which was built over several decennaries and which had made legion acquisitions.

Kraft on the international as a negligible impact in comparing with universe rivals like Nestle . More, harmonizing to F. David, Kraft is ‘just a nutrient company ‘ which is non a competitory advantage in the universe market.

Strategic capableness

Because of the current economic conditions, F. David said that some analysts criticized Rosenfeld managerial attack because of the 2008 compensation, nevertheless, 2009 consequences show that she made the good pick.

In 2009 the net grosss of the company has soared compared with old old ages. Despite the addition of the cost of gross revenues that can be due to the rising prices rates, the gross net income is better.

To maintain and keep the competitory advantage and traveling frontward, the house has toA focal point on the coordination.

The job here is that we can detect a deficiency of connection between Kraft Foods Europe, Kraft International and Kraft North America. Even if the fact that the support activities are all bounded together is positive, this sort of grouping seems irrelevant if the company is regarded like two separate entities like North America Versus International and non like a individual entity.

The aims

The generic scheme and competitory advantage

Bowman ‘s clock

Denise Dollimore, 2010, Slide Business Strategy

By and large talking Kraft Foods is a manufacturer of high value merchandises ( organic, healthy and specified ) . The company is non involved in any low cost scheme. All the trade names are well-known and considered as the top of the merchandise on the market. Harmonizing to Browman ‘s clock the house is focused on variegation and distinction.

To acquire concentrated on this variegation Irene Rosenfeld agreed to modify house ‘s scheme, by simplifying the organisational construction. In 2009, nest eggs have been realized, nevertheless it can besides be explained by the shutting of 36 workss and 19000 places have been eliminated.

Adapted from Kraft Foods Inc. , K. Blanchard, 2009.

Michael Czinkota, 2010, ‘One can look at Kraft Foods Inc. ‘s recent acquisition of Cadbury PLC as grounds of a U.S. company ‘s acknowledgment that it needs to construct both market portion and direction strength to be successful in planetary markets. In 2006, about tierce of Kraft ‘s grosss came from outside North America. Cadbury boosts the international portion of the combined company ‘s concern more than 50 per centum. ‘ Otherwise, this scheme illustrates that Kraft intend to distinguish its merchandises and markets to keep its international presence.

“ We believe graduated table will be an increasing beginning of competitory advantage in both the confectionery class and the planetary nutrient concern as a whole, ” said Rosenfeld, in 2010, who pointed out that the affiliation will let Kraft to go the universe ‘s prima confectionery company with a market portion of 14.8 % . ( Andrew Clark, 2010 )

The buttocks of the scheme

As advised by Fred David ( 108-109 ) , mentioning to the client issue, more people are dining out which may adversely impact Kraft Foods as a food market retail merchant. Further caused by nomadic clients there is less clip for readying of nutrient and hence worsening client demand. Besides the development of wellness nutrients e.g. merchandises incorporating less trans fat or merely organic ingredients could be a challenge for the company although Kraft Foods touched on this country in recent old ages. Whereas there is a paradox between the steady growings of packaged and processed nutrients because of less clip and high demand for healthy nutrients which is largely to category with homemade nutrients.

‘Customers today view nutrient as an look of their cultural and societal individuality and hence inquiring a batch more from manufacturers than merely good quality. ‘

David is still speaking about that this attitude causes to pay more attending to branding than quality because it can reassign a more emotional placement, understand your environment and clients alone demands and gustatory sensation, depending on their civilization.

Furthermore, competition is increasing because the market is attractive and has possible such as the addition of deal shops or hallmarks ( Aldi ) . Therefore it is hard for Kraft Foods to raise their monetary values.

Further there are strategic issues in the supply concatenation such as cost efficiency affair. When the costs of crude oil are lifting it causes an addition in natural stuff costs and hence lifting production and transit costs. Furthermore, corporate and trade name repute of a company are deriving more and more in importance which causes raising competition every bit good.

One more strategic issue could be the economic crisis which affects the consumer to pass less money than normally.

The issues of lifting monetary values, increasing competition and clients are willing to pass less but want more in wellness, cultural and societal individuality instances are hard to work out.

The solution could be to utilize synergisms and place cost drivers for higher cost efficiency. While offering diverse merchandises, with strong branding carry throughing client demand and differentiate from competition. Besides maintaining the trade name repute high by guaranting nutrient safety plans are applied could be a possible attack.

The SWOT Matrix of KRAFT FOODS INC.

Strengths

Harmonizing to Datamonitor ( 2010 ) Kraft Foods has a strong trade name image and diversified merchandise portfolio. Additionally, it operates in domestic and international markets. His well recognized trade names with operations embracing five nucleus divisions include bites with 37.2 % of the entire grosss during 2009, beverages with 19.9 % , food market with 10.1 % , cheese with 16.8 % and convenient repasts with 16 % . Reproduction of its trade names is really hard and merely a few houses are able to copy these. To keep market leading place needs establishing new merchandises with advanced ingredients. The trade name Alpen Gold is really popular and taking cocoa trade names in Russia.

Kraft Foods pays a great importance to research and development ( R & A ; D ) . The R & A ; D is lifting twelvemonth after twelvemonth and reached in FY2009 an disbursal of $ 499 million. In add-on the company has about 2400 nutrient scientists, chemists and applied scientists. Therefore R & A ; D supports to keep a strong market place.

Harmonizing to Datamonitor ( 2009 ) Kraft Foods has 316 distribution centres and terminals worldwide, 303 in North America and 13 exterior America in eight states. Thereby companyA?s multi-category distribution and consumer consciousness are its major strengths. This boosts the merchandising attempts through three chief sets of activities: consumer advertisement in broadcast, prints, out-of-door and online media ; consumer inducements such as vouchers and competitions ; and merchandise publicities for back uping monetary value characteristics, shows and other selling. Kraft Foods has two distinguishable distribution operations as follows: warehouse bringing and direct shop bringing. This of import strength qualifies the company to pull off its stock list in a powerful mode.

Failings

Refer Datamonitor ( 2009 ) Merchandise recalling could be one of KraftA?s failings which were noticed peculiarly in March 2009. The voluntary callback in the United States of Planters and Back to Nature merchandises incorporating Pistacia vera nuts is the latest 1. The ground was the possible to be contaminated with the Salmonella being which can do serious infections.

Kraft Foods operating borders, net border and net net income border is diminishing in malice of an addition in grosss since FY2006. Further companyA?s operating net income fell from $ 4,154 million in FY2006 to $ 3,817 million in FY2008. The grounds for the worsening include addition in input costs chiefly related to higher natural stuff cost, unfulfilled losingss in fudging activities, to energy derivates – warming oil and natural gas contracts. Kraft Foods diminishing borders caused by inefficient cost construction could be a force per unit area on the companyA?s future fiscal programs.

Refer Datamonitor ( 2010 ) to boot unfunded station retirement benefits would do doing periodic hard currency parts which would cut down hard currency available for growing programs.

Besides because of the Cadbury acquisition Kraft Foods debt load has increased from $ 5,556 million to $ 18, 990 million EBITDA. The increasing debt ratio will be a concern for the companyA?s solvency and liquidness place.

Opportunities

Refer Datamonitor ( 2010 ) Kraft Foods new line of low-fat merchandises causes to beef up the market place of the company. The increased penchant for nonfat and healthy nutrient merchandises in the United States drive Kraft Foods tapping into peopleA?s turning wellness and health concerns by its developing the nutritionary profile of its bites portfolio. For case, presenting whole-grain versions of bites, extinguishing trans-fat in most of its merchandises, redeveloping nonfat cookies ( e.g. establishing low-fat Oreo ) are singular chances. Furthermore the company has four key chance countries that meet consumer demands such as weight direction, alimentary bringing, public presentation nutrition, and natural and organic Reducing the Na in many of his merchandises, establishing the South Beach Living line in the US.

Harmonizing to Datamonitor ( 2010 ) Kraft Foods tries to beef up its portfolio late through acquisitions and divestitures such as the flavored H2O and juice trade name assets and similar hallmarks. Furthermore, the company decided to sell the Artiach biscuits concern in Spain to Panrico which caused an on-going focal point in Spain to turn its portfolio. ( Source 1 Datamonitor )

Furthermore the US java sector grew in the recent old ages and histories for 70.8 % of the entire US drinks. Kraft Foods has established in forte java market through his trade names ( Kenco, Maxwell House, Cafe Hag ) and this class growing will offer the company great chances for farther growing and chances. ( beginning 1 Datamonitor )

Menaces

Harmonizing to Datamonitor ( 2010 ) the economic downswing declined the consumer demand for some of KraftA?s merchandises. The consumers are supervising their disbursal and are looking for cheaper merchandises or ain label ware and non branded goods. Therefore KraftA?s merchandises are confronting force per unit area from the large retail chainA?s merchandises like Tesco which is advancing their own-labels. Besides the trade good monetary values are mutable due to the economic conditions which could be a challenge for Kraft Foods. All sections of Kraft Foods are affected by the great competition from big both national and international companies such as Nestle and Group Danone. As Nestle is a taking manufacturer in North America and Europe. Besides the market portion and borders could be affected by the ferocious competition, increasing labour costs.

Swot Matrix

Internal Strengths

Internal Failings

A

A

A

A

A

A

Strong trade name image supports new merchandise launch

Product callback shackles trade name image

Focus on research and development helps to provide new client

Decreasing borders affects the company ‘s future growing programs

Section

Unfunded employee station retirement

Strong distribution web strengthens company ‘s operation

Increased dept equity load

Diversified merchandise portfolio with strong benefits

A

Strong focal point on environmental issues

A

External Opportunities

SO Schemes

WO Schemes

Turning demand for ‘health and health ‘ merchandises and services

Diversification /related variegation

Outsource production

Divestments to heighten the company ‘s fiscal place

Organic merchandises or just trade merchandises that

Target an increased market portion for successful merchandises

Positive mentality for the US java market

They will be able to bear down premium monetary value for but may appeal

Acquisitions

To a broad consumer base

A

Turning planetary confectionery and savory bites markets

Market incursion

A

External Menaces

ST Schemes

WT Schemes

Joint venture

New CEO / TMT

Rigorous governmental and environmental ordinances

Expand Internationally

Restructure

International operations could subject to assorted hazards associated

Wider scope of geographic parts to catch Nestle

Specialization

With the state

Increase their gross revenues by bettering and modifying bing

A

Increasing labor costs

Merchandises every bit good as developing and presenting new 1s

A

Dampened consume demand

A

A

Decision: Strategic options

The menace of ferocious competition, particularly when sing that Nestle is their biggest rival. That is to state, Nestle could be the ground to take a rise of their loss of market portion. Therefore, Kraft Foods needs intensive schemes, an effectual manner to prolong and better its competitory advantage.

Chiefly the market incursion could assist to do Kraft Foods worldA?s largest company in its market. In add-on, development of the selling attempts could expose to find an increased market portion for the merchandises that are presently successful around the universe.

Consequently, this scheme would assist in making out to a client base that is perchance untapped or taken by one of their rivals. These may non be wholly cognizant of Kraft and its merchandises.

Another scheme could be developing within the market the company needs to present its merchandises to a wider scope of geographic parts in order to go an even stronger company all around the universe.

In other words, if it ends up in success it would back up them to catch Nestle and even go the market leader. Furthermore, to develop their competitory public presentation of merchandise development could besides be a really of import scheme. Kraft Foods should besides look to increase their gross revenues and dampened consume demand by bettering and modifying bing merchandises every bit good as developing and inventions.

Besides variegation schemes could besides turn out effectual as they can be linked to merchandise development. Related variegation would assist to guarantee that Kraft develops fresh merchandises and inventions that are related to their current stock.

For case, Kraft Foods could look frontward to present organic merchandises or just trade merchandises that they will be able to bear down premium monetary value for, whereas, that may appeal to a broad consumer base. These possible schemes could accordingly back up addition consumer demand, gross revenues and gross.

Annex

Harvard Mentions

Scheme

hypertext transfer protocol: //www.kraftfoodscompany.com/About/strategies/index.aspx

VisionA

hypertext transfer protocol: //www.kraftfoodscompany.com/About/who-we-are/index.aspx

hypertext transfer protocol: //manonamission.blogspot.com/2005/07/kraft-foods-kft-mission-statement.html

MissionA

hypertext transfer protocol: //www.bc.edu/centers/cwf/global/meta-elements/pdf/profile_kraft.pdf

Infusion from the book, page 104

Stamp

Frederic Therin ‘s article, 07/07/2010, “ Switzerland and houses ‘ revenue enhancement oasis ” , Les echos, available at:

hypertext transfer protocol: //www.lesechos.fr/economie-politique/monde/actu/020568849472-la-suisse-eternel-paradis-des-multinationales.htm

David Lieberman, 12/11/08, ‘Kraft sees benefits as consumers stay place ; CEO says invention, quality and diverse thoughts are critical ‘ , USA Today, available at: hypertext transfer protocol: //www.lexisnexis.com/uk/nexis/results/docview/docview.do? docLinkInd=true & A ; risb=21_T10632417437 & A ; format=GNBFI & A ; sort=BOOLEAN & A ; startDocNo=1 & A ; resultsUrlKey=29_T10632417440 & A ; cisb=22_T10632417439 & A ; treeMax=true & A ; treeWidth=0 & A ; csi=8213 & A ; docNo=1

11/16/10, ‘Packaged Foods Outlook Stable Despite Rising Input Costs & A ; Cutthroat Competition ‘ , Business Wire, available at: hypertext transfer protocol: //www.lexisnexis.com/uk/nexis/results/docview/docview.do? docLinkInd=true & A ; risb=21_T10636796105 & A ; format=GNBFI & A ; sort=BOOLEAN & A ; startDocNo=1 & A ; resultsUrlKey=29_T10636796108 & A ; cisb=22_T10636796107 & A ; treeMax=true & A ; treeWidth=0 & A ; csi=7924 & A ; docNo=2

Janet Kidd Stewart, 08/01/96, ‘Bacon monetary values skyrocketing ; A Pork affected by ’95 heat ‘ , Chicago Sun-time, available at:

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Tim Mclevish, 11/04/10, Net incomes Conference Call -Final, available at:

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Ellen Simon, 04/09/06, ‘Disabled handicapped in occupation hunt? ; Employment rate remains level for about 20 old ages ‘ , Telegraph Herald, available at:

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12/11/09, ‘Union warns on Kraft ‘s investing programs for Cadbury ‘ , Just Food, available at: hypertext transfer protocol: //www.lexisnexis.com/uk/nexis/results/docview/docview.do? docLinkInd=true & A ; risb=21_T10642216285 & A ; format=GNBFI & A ; sort=BOOLEAN & A ; startDocNo=1 & A ; resultsUrlKey=29_T10642216288 & A ; cisb=22_T10642216287 & A ; treeMax=true & A ; treeWidth=0 & A ; csi=343992 & A ; docNo=21

Danny Fortson, 07/25/10, ‘Palm oil giant hits back at Greenpeace run ‘ , The Sunday Times available at:

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06/23/07, ‘Kraft-y gear up for rhythm journey ‘ , Gloucestershire Echo, available at:

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Jordan Ammann, 06/07/10, ‘Kraft Foods works in Bahrain cuts energy ingestion by 25 per centum ‘ , Middle East and North Africa Report available at:

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Reuters, 04/25/02, ‘Kraft will pay US $ 270,000 in age-discrimination suit ‘ , National Post ( Canada ) available at:

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Anna May Kinney, 10/27/08, ‘The questionable moralss of GMO seed development ‘ , Sherbrooke Record ( Quebec ) available at:

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Alexis Douglas B. Romero, 08/03/07, ‘Kraft opens research installation ‘ , BusinessWorld available at:

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Porter ‘s Value Chain

hypertext transfer protocol: //www.kraftfoodscompany.com/Responsibility/index.aspx

hypertext transfer protocol: //www.kraft-munich.com/kraft/page? siteid=kraft-prd & A ; locale=deen1 & A ; PagecRef=423 & A ; Mid=423

hypertext transfer protocol: //www.zonebourse.com/KRAFT-FOODS-A-13256/actualite-analyse/Un-spin-off-a-surveiller-18414/

11/15/10, ‘Kraft Foodss lifting in strong trading with lifting unfastened involvement, continues strong hebdomadal tendency ‘ , News Bites US Markets, available at:

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11/09/08, ‘Funtank Names Digital Marketing Pioneer Scott Tannen as President ‘ , Lab Business Week available at:

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Bowman ‘s Clock

Michael Czinkota, 2010, ‘Doubling exports extends U.S. range ; With careful risk-reward appraisal, encompassing international markets for exports opens doors to economic chances ‘ , Marketing Management available at hypertext transfer protocol: //www.lexisnexis.com/uk/nexis/results/docview/docview.do? docLinkInd=true & A ; risb=21_T10637225319 & A ; format=GNBFI & A ; sort=BOOLEAN & A ; startDocNo=1 & A ; resultsUrlKey=29_T10637225322 & A ; cisb=22_T10637225321 & A ; treeMax=true & A ; treeWidth=0 & A ; csi=11634 & A ; docNo=1

Irene Rosenfeld sentence reported by Andrew Clark in January 2010, in an article ‘Cadbury coup d’etat: Rationale: Chocolate, gum and corner stores: why Kraft could n’t defy Cadbury ‘ , The Guardian available at:

hypertext transfer protocol: //www.lexisnexis.com/uk/nexis/results/docview/docview.do? docLinkInd=true & A ; risb=21_T10642864589 & A ; format=GNBFI & A ; sort=BOOLEAN & A ; startDocNo=1 & A ; resultsUrlKey=29_T10642864598 & A ; cisb=22_T10642864597 & A ; treeMax=true & A ; treeWidth=0 & A ; selRCNodeID=119 & A ; nodeStateId=411en_GB,1 & A ; docsInCategory=118 & A ; csi=138620 & A ; docNo=8

Swot

18/11/2010, Datamonitor ( 2010 ) . Kraft Foods, Inc. Company Profile. Availible at:

hypertext transfer protocol: //web.ebscohost.com/bsi/pdf? vid=4 & A ; hid=107 & A ; sid=e9720c16-9329-4fd6-aeb8-e178942a1a99 % 40sessionmgr113,

18/11/2010, Datamonitor ( 2009 ) . Food MarketWatch COMPANY SPOTLIGHT: KRAFT FOODS. Availible at:

hypertext transfer protocol: //web.ebscohost.com/bsi/pdf? vid=4 & A ; hid=22 & A ; sid=e9720c16-9329-4fd6-aeb8-e178942a1a99 % 40sessionmgr113,