Business Strategy
Business and Corporate
business strategy analysis of kraft foods
Analysis of Business Level Strategy
Kraft Foods Inc. is the second largest food company in the world and makes annual revenues in excess of $54 billion (Kraft Foods Annual Report, 2012). It operates in a highly competitive consumer foods industry where high volume sales are essential for competitive success. Tapping into new markets and growing one's brand portfolio are also important for growth and success.
Kraft Foods Inc. pursues a number of business-level strategies to support its corporate level strategies. The business level strategies are determined by answering the question How do we compete? (Ireland, Hoskisson & Hitt, 2008). Kraft Foods Inc. has selected product differentiation and brand development as its primary business level strategy. Product differentiation involves creating and conveying to the consumer a unique feature of the product portfolio that distinguishes the company from the competition and offers something that the consumers value. Kraft Foods Inc. develops brands in a number of product categories including biscuits, confectionery, beverages and convenience meals. Some of the well-known brands of the company are Tang, Cadbury, Kraft, Oreo and Lu. The company has adopted nutritional value as the differentiating feature to market its products in 170 countries around the world (Kraft Foods Annual Report, 2012). In addition to differentiation, the company also pursues low costs through sustainable sourcing, efficient packaging and reduced transportation costs (Kraft Foods Annual Report, 2012). These strategies project the image of a responsible company and keep costs low.
In my opinion, the differentiation strategy is the most effective business level strategy for the company because a diverse brand portfolio enables the company to address the diverse needs and tastes of the consumer segments. Consumers prefer localized products; therefore Kraft Foods Inc. needs to expand its brand portfolio...
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