Internal Analysis and SWOT analysis
Resource Based View is an approach used by the management in the achieving of competitive advantage in relation to other business. It emerged between 1980 and 1990 after combined efforts by Wernerfelt, Prahalad, Hamel and Barney. The supporters of this method of analysis insist that managers should focus more on the internal resources that give the company competitive advantage as compared to focusing on the external factors. In short, the company should capitalize on the resources it has on its disposal first before venturing into other means of strengthening the firm’s competitiveness.
The model below simplifies the Resource based View Approach
Kraft Food Company Resource based Value Analysis
“Resource based Value analysis is a combined evaluation of the internal resources of a given firm with its competitive surrounding” (Henry, 2007). In this paper, Kraft foods are analyzed in relation to its strategic resources in order to determine its competitive capability in relation to other firms in the industry. The company, Kraft Foods Company, is an international firm and specializes in the selling of groceries, common food products, snacks and beverages. The company has created a strong image and brand in the American markets and other countries in the Northern America. An analysis conducted on Kraft in relation to its organizational abilities and resources will outline its capability in the market to date as follows:
Tangible Resources
Physical Resources
These are the tangible resources that provide the company with strategic advantage over other companies. The company has a very diverse capital base owning subsidiaries in over 70 countries globally growing its brand name all over. The company has been able to merge and take over leading food and snack firms in various countries making it the biggest food company in the United States and other countries, as well. The company has also opened many branches all over Northern America offering millions of product brands to the market. The latest take over by Kraft is the acquisition of Cadbury PLC; a United Kingdom based Snack Company. Kraft business distribution all over the continent has resulted in the decreasing of the firm’s business risk while strengthening its competitive advantage in relation to other firms. According to Cambridge Mass (1999), the globalization of the company operations and increased strategic acquisitions has made the company one of the top five food firms in the world.
Financial Resources
The company acquired Cadbury Inc. in a deal of close to $18.5. The company’s food branches in North America are valued to closely $19 billion. The other branches that are spread out in the rest of the world are valued at $36 billion in relation to their revenues per annum. Kraft is seen to have a high financial base providing it with a strategic advantage over its competitors in the industry. This also provides a boost for the company to conduct research and development on its current and new products in the industry.
Human Resource
In United States and Canada only, Kraft has employed over 25,000 employees in its branches (Kraft Foods, 2013). The firm aims at improving the working conditions of the employees in their branches to the best, to ensure that productivity from the human resource department is maximized. This will help the form to meet the firm’s goals and objectives. The firm is known to have acquired the top executive managers and the most experienced in the snack and food industry.
Intangible Resources
Technical Resources
Kraft has hired very talented and skillful employees in every part of their organization. The 25,000 employees employed are all qualified and experienced to hold their positions in the organization. This improves the quality of products and services they offer. The firm also conducts yearly study of the market hence obtaining feedback from their direct products about their products and services (Magwood, 2011). The employees therefore have better understanding of their customers, providing better services and customer services. The firm has also partnered with consulting firms hence being in a better position to receive detailed information about the market taste and preferences.
Intellectual Resources
Kraft Foods has brands that have acquired international recognition all over the world, competing among the top in every country it operates. In most of the countries, the company has attained patents for most of its brands, therefor producing differentiated products from the rest of its competitors targeting each segment in the market. For example, Planters Nuts is a popular brand along North America and its popularity is increasing by the day. This product could be seen to earn the firm over $500 million in revenues per year. As it has many brands, some of the brands operate under the trademark of the company while others operate under different license from other firms.
Goodwill
Kraft Foods has created a positive image amongst its customers in North America, to be specific Puerto Rico, USA and Canada. This has created a lot of goodwill for the company establishing it on the market grid permanently for now. The firm has been honest and reliable with relation to quality as well as safety. The firm also enjoys a lot of professional goodwill, with exemplary quality customer service and uniqueness of its products. Kraft produces products that are tailored to meet the specific requirements of its customers, thereby creating its own particular market niches.
Cultural Identity and Strategic Alliances
Kraft Foods’ parent company began its operations in Illinois, USA. With these, most of the company’s customers associate themselves with the firm as the company has sustained its traditiokn for many years. Just recently, the company has acquired stakes in Cadbury Inc., a UK based food firm, which is one of the largest in the world. This has improved the image of the firms brand in the global market. Another of the major Strategic decision was the split of the company the northern American-branch and the global branch. This move has made the different market segments to gain the needed attention and improvements are expected.
Distinctive Capabilities
Architecture
Kraft has a logo, and it symbolized by blue and red. This logo appears in each of its product and branches. This blue and red logo has been used since the origin of the company. This logo makes the firm to be easily identified among its customers in the market.
Reputation
Kraft has been positioned as one of the top firms in the snacks and food industry, this is not disputable. Repeatedly over the years, it has regained its top spot with the good customer services and high quality products it offers. The firm is a member of the Ethibel and Dow Jones Indices. The firm also has global fame and recognition with over half of its income annually coming from outside the borders of Northern America.
Innovation
For Kraft, innovation is one of its highly treasured resources. The firm has always been giving to its client’s high quality services and products in the market. Kraft Foods Company with it is innovation department, has partnered with various distributors thereby offering products with packages that are environmental friendly. The company also has a research and development division which strives to minimize cost to the firm by offering new and better ways of production the RnD division also offers new products to the market thereby gaining competitive advantage in the market. The division also helps in the increasing of the food safety and nutrition of their products.
References
Kraft Foods Corporate Information. (2013). Kraft Foods Group. Retrieved from http://www.kraftfoodsgroup.com/home/index.aspx
Harvard Business Review (Cambridge Mass.). (1999). Harvard Business Review on corporate strategy. Boston Mass: Harvard Business School Press.
Henry, A. (2007). The Internal Environment: A Resource Based View of Strategy. Understanding Strategic Management. Oxford University Press. Retrieved on Fkebruary 10, 2014, from http://www.oup.com/uk/orc/bin/9780199288304/henry_ch05.pdf
Magwood, J. D. (2011). Kraft Foods Inc.-Marketing and Managing the Customer Relationship. Retrieved from http://www.customerthink.com/article/kraft_foods_marketing_and_managing_custo
