Conduct a strategic analysis of the Kraft Foods Group. Identify the primary business strategy employed by the Kraft Foods Group. You will also be providing a critical analysis evaluating that strategy in the context of the strengths, weaknesses, opportunities, and threats.
Respond to the following:
1. Which of the four generic (Porter) strategies does the Kraft Foods Group follow, and how do you know?
2. Integrate the strategy you've identified above with the strengths, weaknesses, opportunities, and threats you identified in Modules 2 and 3. Doing so should give you some specific actions the company is taking relative to its strengths, weaknesses, opportunities, and threats. These actions are referred to as "strategic choices." Do the Kraft Foods Group's strategic choices align with the firm's generic strategy? If not, what are the points of disconnect? Think critically about this step, as no company achieves perfect alignment of its strengths, weaknesses, opportunities, and threats with its chosen strategy. It is your job to uncover the discrepancies and problems.
3. How can the Kraft Foods Group leverage its strengths and shore up its weaknesses by altering its strategic choices? How can the company take advantage of environmental opportunities and minimize environmental threats by altering its strategic choices? Be specific.
4. Complete the paper by commenting on how your view of the Kraft Foods Group's vision and mission has changed or has been reconfirmed by this process of strategic analysis. Would you make any suggestions to revise the company's mission or vision statements, or any of its goals/objectives?
5. Consider the Case as a formal business report that you are developing for the Board of Directors and CEO as the Kraft Foods Group's consultant. This is a professional document. Follow the format below: ◦Executive summary: This is a synopsis of the main points, conclusions, and recommendations made in the longer report. If you would like a refresher on writing an executive summary, check this website: http://www.highendfinance.com/CommercialLoans/Docs/07-4%20ES%20Guidelines.doc
Kraft Foods has several strengths, weaknesses, opportunities and threats presented by internal and external environment. In this section Porter's generic strategy used by Kraft Foods is described followed by company's strengths, weaknesses, opportunities and threats of this particular business strategy. In addition, recommendations on how Kraft can overcome threats are also provided.
Recent global market changes have led to enormous competition in the global food industry. As a result companies have been devising strategies to stay ahead of competition. Companies have different strategic options at business level which allow competitive advantage against competitors to obtain sustained competitive advantage (SCA). SCA are unique and are difficult for competitors to imitate.
There are four generic strategies available to companies to achieve sustained competitive advantage. They are- cost leadership, differentiation, niche focus, and preemptive move.
Porter's Four Generic Strategies
Cost leadership: By using this strategy, companies gain competitive advantage from being able to produce products at lowest cost. Firms using this strategy have to be cost leader. Different means are used to obtain low costs like through unique access to resources of low cost, outsourcing, efficient manufacturing and eliminating redundant costs. An example of low cost leader is Walmart.
Differentiation: This strategy requires designing a product or service that has unique characteristics which are valued by customers and are not present in products offered by competitors. Here cost is not a factor considered by consumers in decision making. It is the uniqueness which is sought by them. This would also demand higher prices than average, but customer does not mind paying this premium. The risk with this strategy is that consumer preferences change and distinctive characteristics can be copied by competitors due to which companies are constantly under pressure to innovate and improve their products.
Focus strategy: This strategy involves concentrating on a narrow segment that is concentrated neither on cost advantage nor on differentiation. Companies using this ...
This response analyzes the primary businesses strategy used by the Kraft Foods Group.