Kraft Foods Inc. enjoys the position of world¶s second largest food company after Nestle (Trevis, 2011). The company masters the manufacturing and marketing of confectionary, food items and beverages. It has more than 11 brands in the markets of America, Europe and Asia. The company has strong brand image and offers innovative products to its customer base. More than 40 of its brands has 100 years heritage (KraftFoods, 2011). Kraft Foods provides an interesting portrait of a company that employstraditional distribution network as well as 2 tier direct store delivery distribution network (MWPL, 2011). With its continuous Research and development units the company iscontinuously in a process of offering safe, healthy and innovative products to itscustomers. The effective R&D is a key to sustain its market position and competition inthe industry.
The company is weak on its market performance. Kraft foods acquired Cadburywhich no doubt increased its profit ratio to many folds but it also added lot of debt pressure on the company. Along with the debt requirements the company faces cut throatcompetition with Nestle and Harshey in the markets. Despite of its operations in variousmarkets and presence in US and other markets, the company is weak on geographicconcentration. Kraft foods has low market share but it enjoys high margins in grocery business.Kraft has about 9% market share in the $40 billion global grocery market.Although the grocery division's contribution to Kraft's revenues is lower compared toother divisions, it has EBITDA margins of 33% which are higher than the 14-15%margins in Kraft's other businesses. The high profit margins make grocery a lucrative business line for Kraft (Trevis, 2011).