Economics
Sources of Information for a Porters Five Forces Analysis on Kraft Foods
To undertake a Porters Five Forces analysis it is necessary to identify potential sources of information that will give the required information. The Five Forces analysis will require an assessment of the five areas; degree of rivalry among competitors, threat of new entrants, bargaining power of suppliers, bargaining power of customers, and availability of substitutes. This process can be examined by looking at the sources which may be used for a Porters Five Forces analysis of Kraft Foods, a firm that competes in the food industry. Each of the forces will be considered separately.
Degree of rivalry among competitors
Source 1; CSI Market; URL is http://csimarket.com/stocks/competitionSEG2.php?code=KRFT
This is a very useful web site which has the primary aim of providing information to potential investors. The page on Kraft Foods is particularly useful in assessing the firm's position in the context of rivalry as it provides information on the market share that Kraft Foods has on the segments in which it operates. The webpage provides information on the company and its competition by segment, looking at the beverages segment, the cheese segment, refrigerated meals, grocery, and international and food service. For each of the segments the companies own market share is given, and the main competitors are identified, along with their own market share in that sector. This helps to indicate whether or not there is a high level of concentration, and position of the organization within that competitive industry.
Source 2; Kraft Foods 10k, URL is http://ir.kraftfoodsgroup.com/secfiling.cfm?filingID=1545158-14-3&CIK=1545158
The annual report is a useful source of information, and will be seen under several sections for using porters five forces analysis. Within the 10k annual report there is a section which deals with the threat of competition, and gives a broad indication of the type of competition at the organization faces, and gives information on the way that the company deals with the competition, identifying the broad tactics, such as effective advertising, innovation and supporting brand recognition and loyalty.
Source 3; K-Mart, web site, URL at http://www.kmart.com/en_us/grocery-pet.html
This is a supermarket website, which may be useful in identifying the level of competition that exists. As the website belongs to a major retailer, the grocery segment provides information on a range of choices for different products, and will help to identify the number and type of products that the craft products are competing with. Other supermarket websites may also be useful in this assessment.
Threat of new entrants
Source 1; U.S. Food and Drug Administration, URL is http://www.fda.gov/Food/
This official government website provides information on potential barriers that exist for new entrants in the form of regulation and requirements. The food industry is regulated by the FDA, and regulations provided may be seen as barriers, the harsher the regulations or more difficult it is to comply with those regulations, the more difficult it may be for new entrants to compete with craft. The webpage provides information on guidance and regulation, including registration of food facilities, requirements of food businesses, and issues such as food labeling. These may all be seen as influencing the ease with which new entrants may enter the market.
Source 2; News Baertlein, L, (2014, Sept 30), Kraft challenged by "healthier" macaroni and cheese brands, Reuters, accessed at http://www.reuters.com/article/2014/03/30/us-kraft-macandcheese-idUSBREA2T09C20140330
This news article provides an inside an example of the way in which information from the marketing press, whether it is from the dedicated national press, or the news media, can indicate areas where there may be gaps in the market. This article demonstrates the presence of a gap for one of the core products within the craft product portfolio; macaroni cheese.
Bargaining power of suppliers
Source 1; Kraft Foods 10k, URL is http://ir.kraftfoodsgroup.com/secfiling.cfm?filingID=1545158-14-3&CIK=1545158
The first source of information regarding the power of suppliers is the firms own annual financial filing, referred to as a 10k. This is the annual financial report that is filed by the company and as the...
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