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Kraft Foods

Kraft Foods

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Published by Vrajesh Shah

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Published by: Vrajesh Shah on Nov 06, 2012
Copyright:Attribution Non-commercial

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11/03/2013

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XLRI BUSINESS MANGEMENT 2011-13
 
STRATEGICMANAGEMENT
PROJECT REPORT ON KRAFT FOODS
SUBMITTED BY:-GROUP 13 BM-B
BHANU PRAKASH REDDY B11074KUNAL SINGH B11089ROHIT SURI B11104VRAJESH SHAH B11121
 
Contents
........................................................................................................................................... 11Managing Growth at Kraft Foods ............................................................................................................... 12Acquisitions ................................................................................................................................................ 13Kraft-Cadbury ......................................................................................................................................... 14International Strategy .................................................................................................................................. 15Organization structure and Integration ....................................................................................................... 17The post-merger Culture ............................................................................................................................. 17Integration and success: .............................................................................................................................. 18Kraft View .............................................................................................................................................. 19Cadbury View ......................................................................................................................................... 19
 
Introduction
The firm Kraft Foods was formed in 1923 with a view to consolidate the ice cream industry in theUnited States which was pretty fragmented at that time. However, through a number of acquisitions, it expanded and its product portfolio included a wide range of dairy products. In this
manner, it became the world’s and United States’ largest dairy company only within a matter of 
8 years (that is by 1930).It was in 1909 that James L. Kraft started a cheese business under the name of J.L. Kraft andBros. Company in Chicago. Their strategies included extensive product development andmarketing through which they started selling 31 varieties of cheese in the U.S.The National Dairy Products Corporation, which was how Kraft Foods was known then, wasformed as a result of a merger Rieck McJunkin Dairy of Pittsburgh, Pennsylvania withMcInnerney's Hydrox. It was listed on the New York Stock Exchange and its acquisitions weredone through stock instead of cash. In the 1950s, the company started diversifying into theconfectionary businesses like candies, macaroni and margarines as commodity dairy productsstarted becoming low value added. The extent of diversification is signified by the fact that italso ventured into the business of glass-packaging with the Metro Glass acquisition. Thiscontinued even into the 1960s as the company forayed into markets worldwide throughacquisitions. The name of the company was changed to Kraft in 1969 which was followed byreorganization in the structure. Marketing and advertising of the products has always remainedone of the focus points at Kraft Foods. This is what the organization has heavily relied on for thesale of their products across the world.The company has several product offerings in cheese, confectionery, snack foods, dairy foods,convenience foods and beverage segments with its products being marketed in over 170
countries. Kraft’s brand portfolio has 12 brands with revenues of over $1bilion with 50 other 
brands providing revenues exceeding $100 million. Around 80% of these revenues come frombrands which are leaders in terms of market share. Kraft has expanded into various productdomains and also into different markets worldwide primarily with the help of acquisitions and
mergers only. This seems to be the organization’s most adopted way of expanding their 
operations and introducing different products from their portfolio into the local markets. As of 2010 the company, headquartered in Northfield Illinois, had revenues of US $ 49.2 billion with127000 employees worldwide.

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