CASE STUDY-KRAFT FOODS Liteanu Alexandra B4/I

1. Competente functionale -KRAFT

We should refer here to those attributes that can create long-term competitive advantages and how to link them to obtain a synergistic effect to a firm. These are: production, marketing, research and development, personnel, finance, information system. Kraft is the largest food company in the US. and the second largest in the world. Production- Domestically Kraft Foods Inc. competes with a number of companies, a few of which include ConAgra Foods, Heinz Company and Sara Lee. Kraft Foods values its customers, so it made numerous market research when launching or improving a product, take into account their cultural and social identity. Marketing-A key of succes of Kraft Foods was James Krafts commitment to developing new products and using innovative adertising methods.Kraft was an early user of all communications media (advertising on Chicago trains, outdoors billboards and mailing curculars to retail gorcers).Kraft was the first to use colored advertisment in national magazine. In feb. 2009, Kraft launched a new corporate web site.Visitors of the site can view commercials from around the world while learning new product innovations, so this is very relaxing.The main site for Kraft Foods has been upgrades too.The site is a way to create some interactivity with the visitors, future costumers.The registration process is in line with the overall browsing experience:painless and very respectfull, cuz the visitor is not asked to proveide the last name and the newslatter options are off by default(Nike asks too much information on the registration process). R& D

Kraft Foods has been stepping up its innovation investments for several years, which is driving business momentum. Today, more than two-thirds of Kraft Foods products are preferred to the competition compared to about half in 2006. Innovation is helping boost top-line growth, with new products generating 10.5 percent of the companys net revenue in 2011, up from just 7.4 percent in 2009. Together, Kraft Foods Research, Development & Quality team is finding new ways to delight consumers, create superior products and win in a fiercely competitive marketplace. Kraft Foods world-class network of approximately 3,300 food scientists, chemists and engineers invent delicious products at 15 major R&D Centers in Asia, Europe and North and South America with an R&D expenditure of more than $700 million in 2011. The company seeks to be the partner of choice in the innovation community and recently launched its new Open Innovation website http://www.kfcollaborationkitchen.com/EN/Pages/Home.aspx for prospective partners to see how partnering with Kraft Foods means access to talented people, great brands and superior quality. Krafts commitment to innovative was very well demonstrated through the varierty of products that were introduced (Velveeta, Miracle Chip salad dressing, Kraft macaroni and cheese dinner , Porkay margarine etc.) Kraft Foods will continue to invest in marketing and innovation for the larger regional "power brands and for faster developing markets. Human Resources The future of the whole business depends on the quality of the people they recruit, and the quality of their experience once theyre in the company. But theres plenty more to Human Resources at Kraft Foods. Thats because they shape every strategic decision they make. By helping them to work out exactly what manpower, skills and expertise they need to turn ideas into reality and how plans will affect peoples life at work. Kraft foods number of employees in 2012 was more than 216.ooo people. Finance The combination of Kraft Foods and Cadbury provides the scale necessary to grow sales and distribution in new and existing markets, delivering $1 billion in incremental revenue synergies - in addition to $750 million in cost synergies - by 2013.

More than half of Kraft Foods' revenue now comes from markets outside of North America, such as Brazil, China, India and Mexico, where GDP and demand growth are strongest. Additional savings over the next three years from procurement, manufacturing and logistics will drive productivity gains in excess of 4 percent of cost of goods sold. These productivity gains, combined with flat overhead growth and pricing to offset input costs, will contribute to the expansion of gross margin Information Systems Innovation can only happen if theyve got the infrastructure to support it. And everything they do, every minute of the day, relies on having the right technology and information immediately available. Information Systems are the key. They keep thousands of people across a whole continent plugged in, switched on and linked up.But they do much more than just answer helpdesk calls and fix the computers. Information Systems also invent neat solutions to technological problems, and work out what systems and equipment they need to support their ideas. 2.analiza industriei-KRAFT FOODS It is well known that more people are dining out and food producers (PepsiCO First place on Forbes for Americas biggest food companies, Nestle-4th place and Kraft 5th place) are devoting more attention to product designed for restaurants, also vending machines and other food serivice providers. Today's food industry and associated systems is a complicated environment that is rooted in cross-cutting affiliations, strong and loose connections, formal and informal relations, relations which empower and disempower as they bind people and places tightly together. The global expansion of the food market hastened in the 1990s and prompted local food producing organizations to search for new markets, identify and acquire necessary resources, leverage scale of economies, and outwit competitors to obtain new markets and a competitive advantage.

There are numerous marketing models to facilitate global market penetration and firms may seek to enhance international market share on a country-by-country approach without a connection with their affiliates . On the other way, food companies that are currently in the global market may elect to align their marketing strategies across all affiliates. However, researchers suggest that some international food firms persist to create a homogenous buyers and sellers market which in turn fosters increased globalization. The industry of food is so competitive that is not easy for these companies to raise their prices and this is main reason why profit margins suffered so much. Costumers are becoming more aware of where their food comes from and they are concern about the treatment of animals, the environmental impact of how food is transported or health issues stemming from pesticides, genetically-modified foods or processed foods. Costumers ask a lot more from producers more than just quality. More people are taking the saying you are what you eat to heart. But eating locally and organically can be expensive, and food available in winter can be lackluster, to say no more. So, whether we like it or even know it, most of us continue to support the big food conglomerates. 3. strategii urmate de Kraft - globale/competitive/functionale Strong points -worlds second largest food company; -strong brand image; -intense innovation; -distribution network. Weak points -market share; -intense comepetition; -geografic concentration Opportunities

-expansion in developing markets; -explore Cadbury markets; -repositioning after the aquisition of Cadbury Threats -intense competition -unhappy customers Current strategy of Kraft Foods is to return the company to sustaninable growth. After we realize the swot analysis we can recommend some strategies to follow. The threat of fierce competition, especially when regarding that Nestl is their biggest competitor. This is the reason why, Kraft Foods needs intensive strategies, an effective way to sustain and improve its competitive advantage. First of all the market penetration could help to make Kraft Foods worlds largest company in its market. In addition, development of the marketing efforts could expose to determine an increased market share for the products that are currently successful around the world. On the other hand, this strategy would help in reaching out to a customer base that is possibly untapped or taken by one of their competitors. These may not be completely aware of Kraft and its products. Another strategy could be developing within the market the company needs to introduce its products to a wider range of geographic regions in order to become an even stronger company all around the world. More than that, to develop their competitive performance of product development could also be a very important strategy. Kraft Foods should also look to increase their sales and dampened consume demand by improving and modifying existing products as well as developing and innovations. Also diversification strategies could also prove effective as they can be linked to product development. Related diversification would help to ensure that Kraft develops fresh products and innovations that are related to their current stock. In conclusion, Kraft Foods could introduce organic products or fair trade products that they will be able to charge premium price for, whereas, that may appeal to a wider consumer base. These possible strategies could consequently support increase consumer demand, sales and revenue.