'External Analysis of Kraft Foods Essay\r'

' kraft is the return mavin manufacturer of noshs in the U. S. and the world’s focal point out 2 feed bon ton (Kraft Foods gussy up analysis, n.d.). Our goal is to hold and improve those statistics.\r\nResults of the doorkeeper’s 5-Forces\r\n in that location is a low threat of entry of new manufacturers. The food industry is already glutted with companies who rival Kraft. ConAgra ($11.62B revenues in 2012), and Nestle ($93.06B) represent the top across-the-board rivals. The Kellogg genial club (13.65B) as well holds 34.2% of the cereal market (Kraft annual base, 12/31/2011). thither is a low availableness of substitutes. The devastating drought in the U. S. has caused enormous drops in the supply of crops and animals. With corrupted supplies when demand is high, suppliers bargaining force play is also medium to high. Poor economic conditions conjugated with heightened sensitivity to nutritional values piss prone customers a medium bargaining powe r (Lempert, P., 12/21/12).\r\nResults of the PEST analysis\r\nPolitical agitation in Egypt forced Kraft to freeze down trading operations there (IUF newsier 2012). Likewise, the take all over of the Cadbury follow and subsequent decision of the major plan in England have spawned a veracious deal negativity toward Kraft (Chellel, Kit 5/23/2011). America’s nerve centre class has shrunk by ten percent in the last 40 years and unemployment means consumers argon being rattling cautious with how they spend their bullion (Lempert, P., 12/21/12). Shopping trends ar focussing on wellness rivals and especially obesity (Kraft Foods SWOT analysis, n.d.). Over the simoleons grocery store shopping is becoming more usual (Lempert, P., 12/21/2012). With the advent of Facebook and Twitter, jilted employees, their families, and others who get the picture unfairness dramatically weaken a company’s revenues with a few keystrokes. (Kraft yearly composing 10K 12/31/201 1).\r\nOpportunities and Recommendations Kraft has the fortune to re-configure merchandising and publicity to tap further into the huge health and wellness market. They can educate the public active the advantages of wholesome snacks. Kraft should erect the use of unalike individual pre-packaged and/or wintry items to make or supplement meals as contradictory to buying a whole d inside. The consumer can be educated slightly the nutrition and fourth dimension savings associated with a-la-carte items which can be used in unification with or in addition to a master(prenominal) dish. Kraft has the opportunity to re-examine the proteins in their w atomic number 18s. Because of diminished supply of meat, tack on protein sources should be investigated. I feel the superlative concern right now is regaining and maintaining the Kraft visit and reputation. It is instant to keep the Kraft discoloration associated with beloved foods and healthy snacks. By implementing these ch anges, the company can go forward with even better bottom duct results.\r\nINTRODUCTION\r\nIn this report, I have canvas the effects of Porter’s 5 forces upon Kraft Foods manufacture. I have documented sources to validate those effects. The learning presented is the latest available. I have also through a PEST analysis using the culture gleaned from the previous sources as well as other references. I have given impressions concerning Kraft Foods society from both an internal and external viewpoint. In conclusion, the recommendations for the company should result in better overall performance.\r\nPorter’s Five Forces\r\nThreat of Entry (low) There is a limited threat that more manufacturers bequeath start up in the food industry. It is terms prohibitive pursuant to start up, marketing, advertising, and building tell on loyalty. There are a sufficient number of competitors for Kraft Foods already. Especially at this economical remit down, no formidable threats seem likely (Food retail Industry, 2012). Rivalry (high) Kraft Foods has a high power point of competition rivals. ConAgra ($11.62B revenues in 2012), and Nestle ($93.06B) represent the well-nigh across-the-board rivals. Other peer groups with partial product competition and their 2011 revenues include:\r\n➢ Campbell Soup Company (7.88B)\r\n➢ The Coca-Cola Company(47.60B)\r\n➢ ordinary Mills, Inc.(17.12B)\r\n➢ H.J. Heinz Company (11.62B)\r\n➢ Hershey Foods Corporation(6.64B)\r\n➢ Kellogg Company (13.65B) which also holds 34.2% of the cereal market,\r\n➢ PepsiCo, Inc.(65.70B), and\r\n➢ Unilever N.V. Hillshire (4.09B).\r\n(Kraft Annual Report 12/2011) (Morningstar KRFT competitors 2011). Substitutes (low) Kraft is the number one manufacturer of snacks in the U. S. and the world’s number two food company (Kraft Foods SWOT analysis, n.d.). ontogenesis your own, buying fresh foods, and eating out would be alternatives to Kraft’s treat foods. For most consumers, magazine and money constraints would preclude these alternatives. Because of the slow economy and high rate of unemployment, umpteen consumers are turning to family unit cooked meals rather than buying a complete processed meal (Reports, Statistics and Analysis (2/2/12). Bargaining advocate of Suppliers (medium to high) According to Phil Lempert, the supermarket guru, the devastation of the drought in the coupled States in 2012 has caused exponential upsets in the food industry. There were enormous losses of both crops and animals. Because of this situation, suppliers have little produce and can demand higher prices.\r\n high prices of groceries have forced the consumer to take note of how some(prenominal) food is being wasted. They are investing those grocery dollars in good snacks and healthy meals (Lempert, P., 12/21/12). Bargaining Power of Customers (medium) Poor economic conditions have necessitated smarter use of grocery dollars. The gro cery shopper wants quality products for a reasonable price. Pre-packaged whole meals have given way to more home cooking (Reports, Statistics and Analysis 2/2/12). Improved technology is adding to the clout that customers have. bilk boomers and millennials are using apps to search out equal products at better prices. Health concerns mean consumers are reading labels and demanding to know where their food comes from. (Food Retailing Industry 2012). There is little involved for the consumer in duty period brand loyalty. Customers are commanding a heftier distri besidese of bargaining power than previously because of instant randomness to the highest degree prices and alternatives.\r\nPEST\r\nPolitical In 2011, semipolitical upheaval in Egypt forced Kraft to suspend operations there. Of the 300 workers, 250 had joined to form a Union. In 2012, the new government instituted a social allowance which Kraft refused to pay resulting in a 3-day sit-in. Kraft fired five board members h oping to ward off the partnership. This has caused much negativity toward Kraft. (IUF newswire 2012). Kraft Foods bought out Cadbury and put to death some perfectly legal but questionable tactics in doing so. The takeover and subsequent finale of one of the main factories in England left many people with anger and bitterness against Kraft (Chellel, K., whitethorn 23, 2011). Both of these incidents give a glimpse into how inner company workings become front-page news. Government and political entities necessarily interact with corporations all the age but when the reputation of the company is damaged, it takes a long time to recover. Economic environs The worst U. S. drought in 50 years has caused a significantly trim back supply of raw products. America’s middle class has shrunk by ten percent in the last 40 years and unemployment means consumers are being very cautious with how they spend their money (Lempert, P., 12/21/12).\r\nThe world economy is also in a down slo pe. Sociocultural Environment The public demands for healthier foods and snacks has increased. Baby boomers and millennials (those born amid 1982 and 2004) want better control of what they eat, where it came from and its nutritional value. They are more health conscious than any other generations of peoples. People in general are focusing on health concerns and especially obesity (Kraft Foods SWOT analysis, n.d.). With high unemployment and decreased disposable income, cooking at home has replaced purchasing whole meal packages (Lempert, P. 12/21/2012). Technological Environment Technology, especially the internet, has radically changed the lives of everyone. Today’s consumer is constantly on the campaign and looking for ways to save time and money. slightly of that may be achieved by utilization of an app that lets the consumer equalise values and prices of similar products. Over the net grocery shopping is becoming more popular (Lempert, P., 12/21/2012). In Kraftâ€℠¢s 2011 Annual Report, they recognize the impact of social networks such as Facebook and Twitter.\r\nEven more damaging than public media, hard put customers can breed negativity with rumors and innuendoes (Kraft Annual Report 10K 12/31/2011). Overall Impressions Concerning the Company’s Environment Opportunities The cost of grains and meat will be constantly rising forcing grocery prices up over the next few years. Coupled with the growing nutritional and health concerns, Kraft has the opportunity to re-configure marketing and packaging to tap further into the huge health and wellness market. They can educate the public about the advantages of healthy snacks. Because money is tight and many people are returning to home cooking, Kraft has an opportunity to promote the use of different individual pre-packaged and/or frozen items to make or supplement meals as opposed to buying a whole dinner.\r\nThe consumer can be educated about the nutrition and time savings associated with a-la-carte items which can be used in conjunction with or in addition to a main dish. Kraft has the opportunity to re-examine the proteins in their products. Because of diminished supply of meat, alternate protein sources should be investigated. Threats The Cadbury debacle and the politically-based problems in Egypt have produced much negative press about Kraft. When the reputation of the company is damaged, it takes a long time to recover. Even though Kraft ranks high on the national and global storefronts, a tarnished reputation causes consumers to re-think brand loyalty. .\r\nEven more damaging than public media, sorrowful customers can breed negativity with rumors and innuendoes. With the advent of Facebook and Twitter, jilted employees, their families, and others who perceive unfairness dramatically weaken a company’s revenues with a few keystrokes. completion Kraft continues to be a leading snack and processed food corporation. I feel their greatest concern right now is regaining and maintaining their reputation. It is imperative to keep the Kraft brand recognition associated with good foods and healthy snacks. By implementing these changes, the company can go forward with even better bottom filiation results.\r\nREFERENCES\r\nChellel, Kit (5/23/2011) eFinancial News. Kraft vs. Cadbury: A belladonna plant deal. Retrieved 2/3/13 from http://www.efinancialnews.com/story/2011-05-23/kraft-cadbury-bittersweet-deal. impertinent analysis for Kraft Foods, (June, 2011) Retrieved 2/4/13 from https://docs.google.com/document/d/19liGjGKT76-tSjr_lz1M47bLd99BDFBJlSvHv5BYhzw/preview IUF newsier (2012) Kraft Egypt removes union leaders who called\r\n'