Essay about MGT 599 Case 4 Strategic Choices Kraft Foods

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TUI UNIVERSITY Module 4 Case MGT 599 Strategic Management Dr. Nanette Metz Executive Summary Kraft Foods is the second largest consumer packaged food and beverage company in the world with revenues of approximately $19B. After 110 years Kraft Foods has excelled as an organization and become a well recognized household name. Through the utilization of a SWOT analysis Kraft Foods has been able to determine internal and external threats and opportunities to help them remain on top of their industry. Competition in the food industry is extremely high and through adaptability and change Kraft Foods is able to provide their consumers with better quality and affordable foods. This adaptability has…show more content…
Another major strength of Kraft Foods is the size of the organization. Kraft Foods is a large multinational organization that has the ability to produce a high volume of products which decreases the cost per unit, thereby increasing their revenues and helping to keep cost to consumers low (Bernard, 2010). This is called economies of sales. Additionally due to the high volume of production Kraft Foods is able to spread out overhead costs over more units and a longer period of time further decreasing costs (Bernard). The ability to purchase and maintain specialized manufacturing equipment provides a cost advantage to Kraft Foods over small businesses that may not be able to afford these machines. The strategic choice of Kraft Foods, utilizing their reputation to provide quality products, is in alignment with their cost leadership strategy, provide quality low cost products. Together these two strategies allow Kraft Foods to produce quality food at low prices, enhancing brand loyalty and reputation. Weakness Revenues for Kraft Foods is 2013 was $19B (Kraft Foods Financial Report, 2013). Although this is substantial profits the overall financial portfolio of Kraft Foods is weak. Utilizing cost leadership will help Kraft Foods capitalize and build their financial portfolio allowing for expansion, new equipment/warehouses, and return on stockholder funds. Maintaining this strategy
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