External Analysis for Kraft Foods

2730 Words Jan 5th, 2012 11 Pages
EXTERNAL ANALYSIS FOR KRAFT FOODS

CHAPTER 1

1.0 INTRODUCTION

Kraft Foods or Kraft Foods Inc. (NYSE:KFT) specializes in the manufacturing and marketing of food products, including snacks, beverages, cheese, convenient meals and various packaged grocery products. (US SEC, 2010). The company operates in more than 155 countries across the globe. It has three main segments: Kraft Foods North America, Kraft Foods Europe and Kraft Foods Developing Markets. Kraft Foods is the second largest food and beverage company in the world after Nestle. Its portfolio consisted of 11 brands which earn Kraft foods more than $ 1 billion worldwide. The brands includes: Oreo, Nabisco and LU biscuits; Milka and Cadbury chocolates; Trident gum; Jacob
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Cadbury is a major player in the developing countries and earns billions of revenues from its customers in India, China and other Asian countries. Kraft foods can use Cadbury’s brand equity to offer new products in these markets to explore these markets and opportunities present there further. Secondly, Kraft Foods can reposition itself in the existing markets with more unique and health centered products. There is an increasing trend among the customers that they like to buy fresh, original and organic products. The company can reposition itself in the market as a provider of farm fresh products to gain the customer attention.

2.1.4 THREATS
The main issue currently faced by Kraft Foods Inc. is the Cadbury purchase related issues. After the purchase of Cadbury, there was lot of protest among the British nationals against this acquisition. The profit margins of the company dropped subsequently during this. The customers stopped purchasing the products offered by Kraft Foods, thus, hurting the market position of the company badly (YouGove SixthsSense, 2011). The acquisition brought no changes to the company as they failed to properly utilize the resources of Cadbury and failed to implement the proper positioning structure in the markets. There are chances that this acquisition can lead to the customer walk outs from Kraft products as a reaction to the

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