A)
Post Describe Kraft's competitive strategies.
Kraft Foods Inc. is high value products (organic,
healthy and specified). It is the world's second-largest food company, said
second-quarter profit increased as improved performance in Europe and emerging
markets offset weaker-than-expected sales in North America. The company's
corporate strategy follows a portfolio approach. Kraft segments its portfolio
into six segments: Beverages, Cheese, Refrigerated Meals, Meals & Desserts,
Enhancers & Snack Nuts, and Canada. The company is in the stable stage of
the corporate life cycle, with moderate sales increases and a mature market for
the company's products. Kraft's the firm seeks to become a huge snacks
power house and unrivaled portfolio of brands people love, eat and buy.
Kraft focuses its strategy on the complementary nature the company's portfolio
which is supposed to lead the brand's growth: Delight global snacks consumers.
As the world's Consumers are looking for on-the-go
options because they are always in late for something in work or just life.
They're also looking for simple indulgences and healthier options, which is a
paradox because people don't have time to cook in a healthy manner but they
have to be healthy for the work and thin in the daily life.
B)
What strategic challenges does CEO Rosenfeld face?
Rosenfeld has led the restructuring and turnaround of
some of Kraft's businesses in the United States, Mexico and Canada.
The challenges she faced can be in light of a still
challenging macroeconomic environment, consumer confidence and spending
weakened in many of their key markets, while competition among food retailers
was intense, especially in Europe. They faced significantly higher prices
for key commodities, like cocoa and coffee, and this inflation was magnified by
local currency devaluation, especially late in the year. Like many other
consumer packaged goods (CPG) food companies, Kraft has been buffeted by the
Knowledge Economy's crosswinds, namely the splintering of mass audiences in
favor of niches andlong tails. In food products, as well as in other
"middle market” offerings, the market is bifurcating: consumers tend to
shop low price in many categories while treating themselves to select high
priced items. Consequently, companies in the middle are struggling--with what
some term "the death of the middle” syndrome. This is also reflected by
the consistent underperformance of department stores in the face of strong
showings by discounters and luxury retailers. It is difficult to make
"healthy” foods that consumers want. All food companies have tried to
reduce salt, fat and sugar, but consumers usually do not like the taste, and
the products disappoint. Kraft is adding fruits and vegetables to its packaged
foods .
C)
Which evaluation measures should Kraft use? Explain your rationale.
Kraft appreciates the makeup of a heterogeneous
marketplace and strives to optimum its resources, business performance, and
global presence through market segmentation. The company has annual programs to
assess emerging customer needs and requirements through on time, in time and
timely market research and unbiased market evaluation. Kraft applies market
findings to pursue product marketing complexity adaptive systems strategies and
programs, along with product revitalization and cross-marketing business
acquisitions. Their assessment revealed that due to changing lifestyles, demographics,
single parent families, and two working parents that the frozen food segment
presented a business opportunity.
The firm has effectively penetrated the frozen food
market by using customer information systems to leverage market demographics,
lifestyles, family and parenting structures, health advocates, and diverse
cultural meal preparations. To revolutionize the Kraft organization from an
archaic food company to a contemporary global competitor, KFI's leadership
aligned with various consultant groups to shape a customer centric
organizational culture centered on the principles and practices of agility. The
agility initiatives and associated behaviors and expectations were methodically
and systematically entrenched into KFI's culture which complements the firm's
theoretical horizontal organizational structure.
Thus, with the evaluation measures such as appropriate
market information, market segmentation, and corporate agility and horizontal
structure, Kraft Foods Inc. will remain a competitive force in the global food
industry. The utility of adaptive product marketing activities have benefited
Kraft's bottom-line. Taking a mature business with mature products, Kraft's
management has leveraged the consumers changing tastes and lifestyles to
reinvent and bolster its products. Next, Kraft's management team investigated
the high growth in the frozen food business.
D)
Go to Kraft's website and evaluate revenues, profits and strategic initiatives.
Kraft's revenues
In the period of February 2010, Kraft foods acquired
Cadbury. At the same year, India had been successful in achieving the
sales growth of Cadbury. By 2009, the business had been grown to four hundred
million dollar. During the same month of 2010, the visits made by
management caused a scene to emerge, stating blank check to make India's
business grow to half billion dollar by the end of the same year. This
ultimately referred to the up scaling of regional business.
Later, the Indian team took an initiative to expand
the business operation, setting higher standards for marketing procedures,
increment of sales and so on. The team chose to implement these actions
as per depending upon the catering of large customer base and the buying
behavior of them. This team offered appealing benefits. Here, the
scene of company named tang can be noticed as it helped Kraft to develop its
business ultimately increasing its revenues from $6 billion to $ 15 billion in
less than five years. The major pillar for the growth of Kraft is the
transformation of Tang.
Kraft's profits
The developing markets leadership team determined to
issuing of a blank check by the team of Kraft to the team of Tang stating that
the resources equivalent to $50 billion must be leveraged. Here, the
motive of Kraft was to make the team of tang be comfortable so as to have
visible and weighted connections and communications with the local
people. Tang by the assistance of Kraft's available technological plants
and equipments were able to introduce new flavors considering the taste of the
local people. Flavors such as tamarind and horchata can be found in
Mexico, pineapple and mint in middle countries, mango flavor in Philippines and
passion fruit and sour soup in South America. These additions helped a
company to achieve extra twenty five percent sales mainly in the developing
nations.
Kraft's strategic initiatives
Kraft Foods have a strategy that is focused on five
key categories (e.g., biscuits and chocolate), 10 power brands (e.g., Oreo,
Tang, Trident, and Cadbury), and 10 priority markets (e.g., Brazil, India, and
China); the strategy is called 5-10-10. . In 2007, the leadership team of
Kraft's developing markets identified Tang as one of their top 10 focus brands,
and came up with an unusual strategy for boosting the brand's sales back into
the stratosphere: Tang leaders in key countries such as Brazil were given a
"blank check,” essentially urging them to dream big and not worry about
resources. We can note that Kraft particularly focuses on the five
products type such as biscuits and chocolate focusing ten brands such as Oreo,
Cadbury, Tang, etc.
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