Kraft Foods is an example of a complex and innovative company. It is the largest branded food and beverage company in North America and the second largest globally. It operates in over 150 countries worldwide with a number of the world's preferred food brands. Kraft holds more than 35 major brands with over a century of successful sales: Oscar Mayer, Maxwell House, Jell-O, and Velveeta. In 2011 the company posted revenues of over $54 billion and continues to employee over 125,000 people worldwide (www.kraftfoodsgroup.com).
Kraft operates a diversified product portfolio with five core divisions: snacks, beverages cheeses, groceries and convenience prepared meals. The company is global in operations and has nine brands that exceed $1 billion in revenue. Kraft has over 223 manufacturing and processing plants worldwide, and 236 distribution plants. Conservative values of property and plant equipment top $14 billion. Kraft has just under 130,000 employees globally. As of December 31, 2010, Kraft held total assets of $95 billion dollars worldwide, with $5 billion tied up in inventories. The company has $28 billion in debt, making their actual assets at about $71 billion (Annual Report).
The company is strong, has good cash flow, but has experienced some lagging growth since the recession in 2006-7. Currently, it faces strong and robust competition, particularly in developed countries. Most of Kraft's growth, in fact comes from the developing world and new, emerging markets. Kraft faces a series of challenges that will require rethinking some of their branding and marketing paradigms, as well as the need to strategically partner with other market sectors in order to retain its dominant position in the food market.
Introduction
Part of Kraft's success and distinctive capabilities focuses on the way they have developed their brands into much more than the product. Jell-O for instance is not simply a gelatin desert, it is comfort food, it is food used in salads and numerous recipes, and it is food used when one is feeling ill. Thus, for Kraft, Brans communicate not just an image, but a personality. Because the company has over a century of success, however, they have not only built brand personality, but have built generations of consumers with brandy loyalty. The manner, in which brand equity is built, however, is a combination of the consumer's views and the influence of the advertiser via sales promotion and consistency of message (Valette-Florence, 26).
Kraft has a number of brands, but eleven particular brands that generate annual revenues of over $1 billion each: Oreo, Nabisco and LU biscuits; Milk and Cadbury chocholate; Trident gum; Jacobs and Maxwell House Coffee; Philadelphia Cream Cheeses; Kraft cheeses, dinner and dressings; and Oscar Mayer meats. In addition, they hold patents for 70 additional brands that generate annual revenues of over $100 million (2010 Annual Report Kraft, 2011). Kraft's performance has been fairly consistent globally, but declining somewhat in developed and/or first-world markets. To offset this, Kraft added Cadbury to its line. -- Cadbury is a multinational company now owned by Kraft Foods but headquartered in London. It operates in more than 50 countries globally, and was known as Cadbury Schweppes PLC until 2008, at which time the global confectionery business separated from the U.S. beverage unit, now called the Dr. Pepper Snapple Group. It became part of Kraft in 2010, and employees about 80,000 people worldwide with revenues approaching $9 billion (History of Cadbury, 2010).
Internal Analysis
Kraft realized that there were sliding revenues and share points. Since 2009, the company has pushed R&S by spending almost 1/2 billion dollars annually. The company now has more than 2,000 food scientists, chemists and engineers working in six key technology centers globally -- all pushing for the next great product and tweaking taste, texture and recipes of some of its underperforming brands. Additionally, Kraft invested $20 million to construct a new Biscuit R&S center in France. Combined with new products, Kraft is appropriately relooking at Philadelphia Cream Cheese, Oreos, Kool-Aid and Oscar Mayer to find ways to recapture a younger generation of consumers while still maintaining brand loyalty from a globally aging population (kraftfoods.com). Still, Kraft faces stiff competition, and while in the top five for Return on Equity, they are a long ways from being top in this category:
Kraft posts its company mission to help people globally have a better and healthier life style through the use of Kraft's product line. Their vision is to meet the consumer's needs by making food products more enjoyable, tastier, and more accessible. For the company to remain successful in the long-term, though, they must ensure that they constantly restrategize and energize their products to suit the needs of the customers, to expand sales capabilities, and to ensure new marketing strategies (kraftfoodgroup.com).
The core values that guide Kraft are intangible, but have tangible outcomes if used in an organization manner: to inspire trust, to have employees act like owners, to keep it simple, to be open and inclusive, to be truthful, to lead from the head and the heart,...
In addition, it makes little sense to split out Canada as a unique reporting segment from the United States. The highly integrated economies, free flow of goods, near parity of currency and nearly identical product lines would indicate that there is little operational or strategic benefit to cutting Canada out from the United States. This may allow Kraft to rationalize production more, improving efficiency. The possibility of rationalizing production for
Kraft Foods, one of the largest food manufacturers in the country, accomplishes its goals of the customer attraction, retention, and solving customer complaints through several means. According to Eccles (1981) customers prefer flexibility in their product and service offerings. Flexibility in product and service offerings not only provides the options to customers to choose and select only those products and services that best meet their needs but it also facilitates
Applied Operations Kraft Foods Kraft Foods, Inc. Kraft Foods Kraft Foods An American Firm, Kraft foods Incorporation is a grocery manufacturing and confectionary firm formed in 2012. In the Chicago suburb, Northfield, Illinois is a place where headquarter of Kraft Foods Group is established. The organization is formed by demerger. Mondelez International was the new name of the demerger from Kraft Foods (About Kraft, 2012). In turn, Mondelez is a confectionary company and multinational snack
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