Kraft
Porter's Five Forces Analysis
Threat of Competition (Moderated)
To begin, the threat of competition is moderated by the large size and market position of Kraft. The food and beverage industry should grow, at least as fast of the overall population. Combined with market share growth, the company is well positioned to grow 3% to 5% a year. Kraft is one of the largest food and beverage distribution companies in North America. It is a publicly- traded limited partnerships in the U.S. However, Kraft faces competition in the industry, as there are other companies that offer similar services in addition to proprietary products owned and operated by large integrated companies, and also it is the possibilities of merge or acquisition to other companies. Information that can be used to better ascertain the companies position are trade publications such as the overall census report to determine population growth. Food and beverage, is the most trusted publication in the industry to help determine industry growth. Market share publications also can determine who is gaining market share.
Threat of New Entrants (Low)
Threat of new entrants is low due to the industry requires a large amount of capital, highly specialized workers and it is a highly regulated business. Potential competitors must be willing to invest extensively in new research and development to maintain market dominance. Kraft last year (2011) spent $1.3 Billion in research and development to innovate existing product lines. Kraft currently has 34% market share in both Europe and Latin America. This market share is growing in emerging markets further indicating the difficulty of new entrants are experiencing penetrating the market. So it difficult for new entrants to achieve a leading position in the industry. Publications such...
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