MGT 599 Case 4 Strategic Choices Kraft Foods

2250 words 9 pages
Module 4 Case
MGT 599 Strategic Management
Dr. Nanette Metz

Executive Summary Kraft Foods is the second largest consumer packaged food and beverage company in the world with revenues of approximately $19B. After 110 years Kraft Foods has excelled as an organization and become a well recognized household name. Through the utilization of a SWOT analysis Kraft Foods has been able to determine internal and external threats and opportunities to help them remain on top of their industry. Competition in the food industry is extremely high and through adaptability and change Kraft Foods is able to provide their consumers with better quality and affordable foods. This adaptability has
…show more content…

With an anticipated increase of 9%-11% in healthy food sales it is imperative Kraft Foods enhance their marketing, advertising and sales in order to gain market shares, not just rely on reputation to sell products (Reliable Plant, n.d.). Allocating funds for marketing and sales of these healthier foods will require funding upfront but the long term benefits of enhanced sales cannot be overlooked. Economy of sales is a term which states that the more a company sells of a product the less it costs per unit to make each product (Farris & Albion, 1980). Although consumer companies spend 3-10% of net sales on advertising, the added volume in sales actually lowers the price of products (Farris & Albion). Additionally Kraft Foods can utilize low cost tactics to enhance their financial situation. Kokumuller states “creating low cost tactics that are difficult for competitors to replicate, such as optimizing efficiency and outsourcing to low cost suppliers, in addition to vertical integration, are all ways to enhance financial success” (n.d.). The money saved utilizing these tactics can then be used as capital for growth and future investments. Opening new warehouse facilities that contain new inventory and new manufacturing processes can help Kraft Foods decrease money, increase efficiency and financial success (Kokumller, n.d.). Kraft