External Environment Analysis: Kraft Foods Group
Kraft Foods, Inc., by means of its branches, creates and markets foodstuff that is packaged and drinks all over places such as the Middle East, Africa, Europe, and Asia. The corporation is able to supply its products to, supermarket chains, club stores, wholesalers, mass merchandisers, convenience stores, value stores, drug stores, distributors, and other retail outlets. In addition, they provide desserts, ready-to-eat cereals, garnishes and convenient foodstuff. Beginning in March 2011, Kraft Foods was operating in excess of 80 nations. It is also registered on the NY Stock Exchange with one of its most important achievements being that of Cadburys in 2012 for about $20.5 billion. With that said, food industry is an unceasingly on demand industry that individuals are always want and need. Some economists and analysts claim that food industry is one of the most proof to financial decrease. This makes this industry a strong, dependable and lucrative industry. The foods and products that are part of the flourishing industry consist of, sweets, biscuits, health products, animal foods, bakeries, kids foods, crackers, cakes, and vegetables. The extensive range of products offered offers ample of chances for business in this line, development and growth in line with the improvement of technology and new channel of selling.
Threat of New Entrants
With Kraft Foods Group, Inc. being such an assorted product there are few problems in the way for this extra-large-business to in order to get competitive advantage. Also, any kind of barriers to entry are doing the job of protecting the company for the reason that it is already an affluent company. On the whole, the threat of new entrants in the food business is considered to be quite low. The organization. has a marketplace share that totally controls any other participants. When the stock collapsed in 2008 and 2009, the organization did not even go below 6%. There is one possible threat that may possibly influence the food business, together with the company. Online grocery shopping is recognized as being this threat. The increasing quantity customers place on availability and accessibility has realized a strong online grocery industry. It is known that online grocery shopping is estimated to develop by 10% once a year. Kraft Foods Group, Inc. is on the trail to turn out to be a $9.4 billion dollar commerce by 2017. It is clear that online grocery shopping will be able to change customers buying behaviors; by making their vital request for products of food “value” in relations of both worth and supposed quality. Major food chains for instance Kraft Foods Group, Inc. control grocery stores that are all over the world. However, this is not saying that they will be able to control dominate online grocery shopping. Also, online grocery shopping could damagingly disturb the income of all major food chains as well as Kraft Foods Group, Inc.
Bargaining Power of Suppliers
It is clear that Kraft Foods Group, Inc. has been devoted when it comes to having a more and more different supplier core. This diversity validates the arrangement of their customers. The products and services of the dealers of Kraft Foods, Inc. are as different as their clients. The organization has a “supplier portfolio management procedure” that effects to aid in strengthening Kraft’s domineering business objectives. To help with the growth of suppliers industry with the company they have put together “structured ideation” to fight supplier capacity that goes on with current business priorities and essentials. One supplier is Brakebush and they supply the company with ready-to-eat poultry / meat. The Gulf Trading and Refrigerating Co is another supplier huge supplier to the organization. The bargaining power of suppliers of the company is medium/high. This is for the reason that the U.S. drought in 2012-2013. This deficiency caused a big deal of loss of crops and animals. This type of disaster caused less supply for suppliers which ensued in much greater price demands.
Threat of Substitutes
There is continuously a threat of substitute products with any given professional business. However, that applies to Kraft Foods Group as well. On the other hand, the company is a brand loyal company by many customers all over the world. Therefore, threats of substitute produces do not have an important inference in the direction of their total revenue. Generally, the obtainability of substitutes is small. One substitute over Kraft Foods Group, Inc. is eating out at restaurants. Another substitute would be if consumer grew their own vegetables and fruits. Last of all, another substitute would be purchasing natural foods and not the treated foods that the company sells.
Rivalry of Competitors in the Industry
The food chain market is known to be kind of big. There are a few productions that are really good strong competitors of the company. The amount of rivalry among opponents is extremely high. Some opponents of the organization includes; General Mills, Kellogg, PepsiCo Hershey, and Nestle. The company has turned out to be one of the most prosperous and brand trustworthy manufactures in the world. This has made Kraft Foods Group, Inc. One of the top competitors in the food chain industry. The company has continued to advance and change in order to meet the continuously altering needs of their customer. The deep-imbedded history of the company popular brands has supported its progressions in the food industry. Kraft Foods Group, Inc. is persistently discovering new products for instance low-fat and fat-free products in a collection of divisions, to better suit the needs of their customers.
The PEST analysis
A PEST analysis is known for being business measurement device that measures and examines the aspects of Political, Economic, Social and Technological which then transformed to the proper application of strategic decisions previous the outcomes of PEST analysis.
Political factors are the elements that consist of government barriers and intervention in terms of tax/price that could help the government or the citizen. Distant from that, it likewise take account of the policy and systems that government accept in respects of business friendly for the most part in food industry. The likes of introducing rule, regulation and events, policy of attainment, merger and acquisition that could affect the continuous supply of foods to the nation are part of political factors.
Economic factors consist of stability, purchasing powers, income status, unemployment rates, income parity, exchange rate, interest rates etc. This will surely will have some kind of an effect on the actions and decision taken by Kraft Foods Group, Inc. frugally. As food is part of need and demand by individuals around the world, as every needs food to living and survive, we could say the business is not much delicate on the financial volatility and change.
Social factors consist of the patterns and trends of demands which because of the nationality, religious and cultures. Having brand awareness on a nation could differ with each other’s, demographic, age, income distribution, preferences, global and local attitudes towards definite things are dissimilar. Speaking of the food the industry, it is recognized that local preferences will regulate the receipt of food products. Furthermore, the local taste and likes must be met and this will involve the companies and business to appreciate the local market place before boarding into the local ones.
It is quite obvious that the technological factors really do have some kind of an effect on the production and success of the plant and operation. When it comes to the food industry we are looking at the progression and enhancement in terms of technology engaged in food industry that accordingly recover the yield, making it more reliable and efficient. Product innovation and improvement is likewise produced with the aid of new systems technology, or techniques, this will then help the industries to harvest high quality and better food products in terms of health taste, ingredients, and safety.
Kraft Foods Group, Inc. vision is at all times is to make today enjoyable. The company makes some of the best-known brands all over the world. Products such as dinners, dressings and Kraft cheeses, Philadelphia cream cheese; Oscar Mayer meats; Nabisco cookies Maxwell House coffee; and different kinds of crackers and cookies, not to mention things such as LU biscuits and Milk chocolates. They managed to create reliable, growth that is consistent. That is what they are doing at Kraft, and their approaches are concentrating determinations on putting together a high-performing organization.
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