Kraft Foods

Kraft Foods

Executive Summary

The paper discusses the concept of formulating Kraft business strategies on the basis of theories and learning from Michael Porter's five forces and PEST analysis. How the five competitive forces and PEST analysis shape business strategy and what should be the long-term strategy in times of economic downturn are a part of the discussion.

Under Portals five forces, Kraft Foods have managed to remain competitive within the industry. The threat of new entrants is moderate, while competition, rivalry, substitutes, bargaining power of suppliers and customers is reported to be considerably HIGH.

In external analysis of the Kraft foods, it is evident that due to financial crisis it has to remain vigilant with its high quality and maintain the affordable price to remain competitive in the market.

Applying the model of Porter's five forces to analyze the competitive environment; we can estimate the value of each of the five competitive forces. Porter model leads to the conclusion that, for Kraft foods to become a successful business, competitive forces should be used to develop a strategy that would have saved the company from the actions of the five competitive forces of Porter, and would ensure the creation of such a position that will enable the company Kraft foods to secure a competitive advantage in the industry. Further, PEST analysis analyzes the external environment in a broad way, thus enables the firm to plan their marketing and business strategies accordingly. However, it is recommended that company should focus on maintain its quality within the affordable prices and in order to stay in competitive in the market.

Kraft Foods

Introduction

The paper discusses the concept of formulating Kraft business strategies on the basis of theories and learning from Michael Porter's five forces and PEST analysis. The definition of what strategy is, how the five competitive forces and PEST analysis shape business strategy and what should be the long-term strategy in times of economic downturn will also be a part of the discussion.

Discussion

Strategy

According to Michael Porter, strategy in the easiest sense is the outcome or result of the objective of the company. A company can develop different strategies that can help them achieve organizational goals and objectives.

The Five Competitive Forces That Shape Strategy

Porter's five competitive forces are the basis for much of modern business strategy. The aim is to understand the framework and how to put it into practice. The concept presents the holistic view of the business industry. Practically speaking, the basic structure of the company is responsible for reaching the heights of profitability.

Porter's Five Forces

Threat of Entry: MODERATE

It depends on the possibility of magnitude of the possibility that new entrants in the market delve attracting consumers with new resources. The threat of new entrants is very high in this industry. Since the financial crisis has taken over the entire globe, the local super markets, such as Carrefour, Auchan, Leclerc, Wal Mart or casino have started to produce their own biscuits, jam, cheese etc. This is done because the purchasing power ...