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Strategic Analysis on Kraft

In: Business and Management

Submitted By josepaulson10
Words 2399
Pages 10
Question:
Conduct a strategic analysis of Kraft Foods Company, with special emphasis on Value chain and National Diamond model
Solution:
Industry Overview Kraft Foods Inc operates in the food and beverages industry. The industry is constituted by those companies that involve in stages of activities from procuring the raw food material after harvest till the retail purchase. The activities involved are the processing of raw food materials, manufacturing, packaging the food products and distributing them. The products may be fresh, prepared foods, packaged foods, alcoholic and nonalcoholic beverages. All the products that are meant for human consumption except the pharmaceutical products belong to this industry. The dairy sector forms the largest part of the food industry. The baked and cereal items and chilled foods are the close second and third. In case of the beverages industry, it is divided into alcoholic and nonalcoholic segment. A vast of the alcoholic market is made up of beer, cider and other flavored alcoholic beverages. On the other hand, soft drinks, coffee, tea, juice and water constitute the nonalcoholic beverage market.
The industry is highly competitive and fragmented. Though the competition is among few notable players, no player has a dominant position to dictate the price levels. The players rely largely on advertisements to promote their brand and secure the market position (Food and Beverages Industry Profile, 2009).

Market size: With over 16.5 million people employed, the US food and beverages industry constitutes around 10% of the country’s Gross Domestic Product. The average annual spend of the consumers on food is $1 trillion. The worldwide sales of process foods are found to be US$ 3.2 trillion in 2004. A huge percentage of world population involve in direct farming, and as a result of when they fed themselves. On the other hand...

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