Kraft Foods Inc.

[Name of the Institute]Kraft Foods Inc.

Introduction

Business Environment and Recent History

Kraft Foods Inc. is a world renowned American grocery manufacturing and processing organization, which has a presence in several global markets. The company has main headquarters situated in Northfield Illinois. Kraft Foods Inc. has developed a strong global market, be multiple markets of the developing countries. The company's brand image is based on the ideals of premium product quality and a very strong brand recognition factor across multiple global markets. The company has adopted basically a standardized approach to introduce its wide range of products across the international market, although it has also ventured into establishing a limited line of products for the domestic markets. However the standardized approach has helped the company formulate a strong brand image across the entire consumer market.

The company's unique marketing and branding strategy has also helped develop its significant market position. In the recent history the organization had to face a controversy based open the marketing strategy. The advertisements for several; of the brands products openly stated that the products are very healthy and present an wholesome snack for the consumers, however the fat based contents of the products caused the consumers to protests against the claims of the organization. Due to the result of this incident the company's sales figures were negatively impacted, and the competitors attained an opportunity to capitalize on the opportunity. The result of the controversy was an official case filed by the residents in California. The official response from the organization's management states that the company did not misrepresent facts, and the case is still ongoing as of 2012. The controversy regarding the products highlights the volatile nature of the environment that the organization has to function in, and the challenges that it must face in the process of developing a strong consumer market.

Discussion

Porters Analysis

Threat of New Competition & Substitute Products

Kraft Foods Inc. primarily functions in the American business environment along with several other foreign markets. In the US the relevant government and law regulating authorities have ensured that the organizations present in the business sector adequately function in a legal and ethical manner, and no organization establishes a monopoly (Chang & Chen, 1998). Hence in this business environment the threat for competition is fairly high, as new organizations can enter the consumer market and attempt to develop a strong market. The American food industry consists or several organizations, which have a unique consumer markets and they all target a relatively different segment of the population. However the consumer loyalty in this industry is relatively low and the consumers can easily shift their loyalties to other brands, more easily as compared to products that require higher involvement in the purchasing process. Since the food industry consists of products which are relatively low involvement products, the consumers can easily change their brand of products, or even the products themselves (Jaruzelski & Dehoff, 2009). Hence the threat of substitutes and new competition is relatively high in the business environment ...