Introduction
The Kraft Foods Group is a food and beverage company based in America. Looking at the company’s progress, it aims at being the best food company in the North America, with a history of accumulating over eighteen billion dollars annually. The organization is actively involved in community activities that revolve around food security and healthy lifestyles The company deals with a wide range of meals including refrigerated meals, cheese, and other grocery categories. The company’s target in the future is to attain a steady reliable growth with a good amount of money flowing to allow a wide range of investments both into the society and the company. A lot of improvements are thought of, and the management is always seeking new ways to improve the income and the performance of this industry, in order to obtain a higher income, at the same time give clients the type of services they require.
The purpose of this article is to conduct an extensive Porter five forces analysis research, describe the five forces involved and how they impact the expected outcome of the performance of the Kraft Food industry. The paper is mainly based on the analysis of the external environment analysis of the factors that impact the performance of this industry.
Porter five forces analysis
This is a framework for the analysis of an industry and a strategy for business development. It is drawn upon the industrial organization to derive the five forces that clearly define and determine the intensity of competition of an industry, and hence, its market attractiveness. Attractiveness in this specific context may be used to refer to the overall profitability of the industry of interest, the Kraft food industry. An industry where the five forces and in the negative direction to pull down the overall profitability of the industry is referred to as unattractive industry. Three of these five porter forces are used to refer to competition from external sources. The brain behind these forces, Porter, referred to these forces as the microenvironment. He contrasted it with the wider term macro environment. The five forces in the analysis of Kraft Foods Group are discussed below.
Factors and information for Analysis
The factors and information needed for the evaluation of the porter’s factors include the products or services provided by the company, the errands of the company, the bargaining and persuasive power of the customers of the industry, the power of suppliers and their bargaining power. This might involve the impact of the inputs made by the industry on differentiation or cost, the availability of substitute inputs, the employee solidarity within the industry, and the overlying supplier competition. This involves the action of integrating vertically and complete cutting out some buyers in order to obtain the maximum price of each item for maximum profitability. The Kraft Foods Group has strong values regarding compliance and integrity depicted in the line of work. The employees of the company must abide by the regulations related to their work. Legal compliance is mandatory and acts as a guide for employees when carrying out the business operations. Emphasis is laid on the importance of compliance and acting with integrity when making ethical decisions to ensure that they comply with the stakeholders’ expectations. The company has a code of conduct that all employees must abide. Humana rights are regarded with high value because everyone must be treated equally.
Threat of new errands
When profitable markets yield high returns, new firms are attracted. This brings about the factor of new errands that have an effect of decreasing profitability for all firms in industries. Therefore, there is the need to block the entry of new firms by incumbents in order to avoid situations where abnormal profit rates might tend to zero. The Kraft Foods Group has an outstanding mission of becoming the leading Food and Beverage Company in North America. Therefore, there is the need to completely avoid the entry of new firms since this will lead to destruction of their own profit. No industry in the world can target to become the leading industry in a given country when their profit is tending to zero. The Kraft Foods Group opts to become the market leader through offering products that address the needs of their consumers. These can only be achieved by avoiding the threats of new errands, failure of which might make the industry not to achieve their mighty mission.
Threat of substitute products or services
These force talks about the existence of services and products provided by the industry outside the required realm of the common product. This factor increases the urge of customers to switch to alternative products. Looking at the Kraft Food Groups, this is a crucial factor of interest to both the stakeholders and the management. An effort has been made by this industry to counter the effect of customers switching to alternative products. They have made this achievable by ensuring that almost all the products needed by the customers are available to them. The employees of the company must abide by the regulations related to their work. Legal compliance is mandatory and acts as a guide for employees when carrying out the business operations. Emphasis is laid on the importance of compliance and acting with integrity when making ethical decisions to ensure that they comply with the stakeholders’ expectations. The company has a code of conduct that all employees must abide. Humana rights are regarded with high value because everyone must be treated equally.
This, therefore, has increased the profitability factor. Clients can access all the products required at a central place. An example of such products include tap water being considered as a substitute for Coke, and the Pepsi product being one of the major competitors of the similar product.
Limitations of sources
Looking at the sources given above, each source has a limitation in the information it provides about the Kraft Food Group. Some information on management of clients needs is not properly cited according to the current research done on the industry. The sources provided above do no accurately provide information on services and products as perceived by the customers and competitors. A very crucial factor when it comes to the perception of the external environment. Others sources do not give a wide range of information on the intensity and level of competitive rivalry of this industry with other related industries. This is a very crucial factor when it comes to handling the external environment and pressures.
SWOT analysis
Looking at the strengths, weaknesses, opportunities and the opportunities of the Kraft Food Groups, the industry forms one of the major sources of revenue on the economy of North America. Its existence, therefore, has a wide significance to the economy of the United States. The food industry has a wide range of job opportunities. It offers job opportunities to a big number of the population of the country and through this, people are able to earn a living and sustain their life. Many factors of weaknesses are also evident from the previous losses that have been observed which had a great influence on the stability of the economy of the country. The Kraft Foods Group has a huge responsibility to play to the overall community. It is the food industry and must ensure that its products are safe and meet the set standards. One of the most important values of the company is ensuring that they produce high quality goods. This is seen as a strategy to retain customers. They observe the food safety and quality standards to ensure that the ingredients and products meet the needs of the consumers.
Conclusion
In summary, the company’s values form the basis of its reputation (Mansfield, 2013). It is respected by stakeholders because of its recognition of law and compliant with the given statutes. The recognition and appreciation of human rights are an added advantage for the organization. It recognizes the need for equality. There is a code of conduct outlined by the organization that the employees must follow during the execution of duties. It is a guideline at the work place and it incorporates all the laws related to the business. A law-abiding firm also avoids conflicts with the government and other regulators, which could increase its operating costs through fines and litigations.
References
Ettlinger, S. (2007). Twinkie, deconstructed: My journey to discover how the ingredients found in processed foods are grown, mined (yes, mined), and manipulated into what America eats. New York, NY: Hudson Street Press.
Shim, P. J., & Practising Law Institute (2013). Spin-offs, 2013.
American Dietetic Association, Kraft General Foods, & Good Housekeeping Institute (New York, N.Y.), Wirthlin Group (1991). Survey of American dietary habits. Chicago, Ill.: The Association.
In Miskelly, M. (2013). Encyclopedia of major marketing strategies: Volume 3. Detroit: Gale/Cengage Learning.
Marigny Research Group, & Packaged Facts (Firm) (2003). The U.S. market for food bars. New York: Packaged Facts.
