Mgt 599 - Strategic Management - Kraft External Analysis

Module 2 Case

MGT599 Strategic Management

August 4, 2014

Kraft External Analysis

Executive Summary

Kraft Foods Group was founded in 1903 and the company revamped in 2012. Kraft is one of the largest food and beverage companies in North America. The company main focus is the packaged meals, snack, beverages, and grocery products. Kraft employs about 22,000 employees in the U.S. and Canada and generates $18B in sales annually. (About Us, 2014).

To gather a better understanding of Kraft Foods Group, one has to go back to its history and founders. Kraft has history that dates back to engaging with many different founders all sharing a desire to produce quality and having no problem taking risks. J.L. Kraft, C.W. Post, and Oscar Meyer were three of the most successful business men in the late 19th and early 20th centuries.

Kraft General Foods in January 1995 changed the name of the company to Kraft Foods Inc. and this enable Kraft to become one single operating company. With the dedication of the people that they employ, the company continues to expand and learn from the challenging changes that the food and beverage brings. Kraft continues to expand their portfolio that includes over 70 major brands such as Kraft Cheese, Maxwell House, Oreo Cookies, Lifesavers, Jell-O, and Kool-Aid just to name a few (The History of Kraft Foods Inc. n,d,)

Introduction

The purpose of this paper is to conduct an external analysis of the Kraft Foods Group. Porters Five Forces Model and a PEST analysis were the tools used for this paper. The reason for using this model and analysis is because it will give management an understanding of the external environment of the food and beverage industry. It also assists in identifying the main opportunities and threats that Kraft could encounter in the future. At the end, there will be an overall impression from me concerning Kraft’s environment along with the opportunities and threats.

Porters Five Forces

Rivals

In the food and beverage industry there is plenty of competition out there for Kraft to be aware of. When reviewing the data from Yahoo Finance, Kraft’s market capitalization is 32.56B, ConAgra Foods, Inc is the closest competitor with a market capitalization of 12.84B, and the Hillshire Brands Company is not too far behind both of the companies with a market capitalization of 7.71B (Kraft Foods Group, Inc., 2014).

There has been researched completed that suggest that there are at least five trends that will affect the industry here in the near future. Leading off the trends are products that provide a natural high.