Presentation by:

Osama Masood
Fahad Jawed
 Overview - Kraft
• 150 countries across the globe
• 100,000 employees
• Profits increased by 10%, north American
sales rose by 2.3%
• Brands include Oreo, LU biscuits and Kraft
Cheese, Toblerone
 History
• Founded in 1903 by James Kraft and granted a
patent for process cheese in 1914
• Exports started in 1920 with plants established
in England and Germany
• Key to success at Kraft
– Innovation
– New advertising methods
 OREO
elevator ad
• Philip Morris acquired Nabisco in Dec 2000
and formed two companies
– Kraft Foods North America
– Kraft Foods International
• Second largest IPO in US history offering $8.68
billion dollars
• ‘Divisional by Geographic’ Organizational
Structure
Company mission and Ethics Statement

• Make Today Delicious

– In order to fulfill this mission Kraft Foods Inc.
focuses on consumers in everything. The company
also understands that action speaks louder than
words so at Kraft Foods:
• We inspire trust
• We act like owners
• We keep it simple
• We are open and inclusive
• We tell like it is
Competitors
IFE MATRIX
Key Internal Factors Weight Rating Weighted Score
Strengths
1. Strong R&D 0.1 4 0.4
2. Increased organic revenues 0.06 3 0.18
3. Availability 0.09 4 0.36
4. Innovative advertising methods 0.08 4 0.32
5. Purchasing power 0.04 4
0.16
6. Focus on consumers 0.08 3 0.24
7. Strong distribution network 0.08 3 0.24
8. Strong brand image 0.1 4 0.4
9. User friendly website 0.05 3
0.15
 
Weaknesses
1. High long term debt ($18.5 billion) 0.1 1 0.1
2. Constant increase in current liabilities 0.08 2 0.16
3. Decrease in sales 0.07 2
0.14
4. Poor performance of North-American segment 0.07 2 0.14

Total 1.00 2.99

EFE MATRIX
Key External Factors Weight Rating Weighted Score
Opportunities
1. Increasing trend in dining out (chance to increase profit 0.1 3
margins dealing with businesses) 0.3
2. Growing demand for health and wellness products 0.1 3
0.3
3. Decreased input costs (raw materials) 0.08 4 0.32
4. Changing lifestyles 0.08 3 0.24
5. Growth in the coffee market overall 0.06 2 0.12
6. Growth in global confectionary and snacks market 0.08 3 0.24
Threats  
1. Increasing trend in dining out 0.09 2
0.18
2. Health concerns 0.08 2 0.16
3. Increasing obesity rate 0.1 1
0.1
4. Inflation (transportation) 0.1 3 0.3
5. Unfavorable impact of foreign currency 0.06 1
0.06
6. Intense competition 0.07 4
0.28
Total 1.00 2.60
CPM
 Kraft Foods Nestle ConAgra Foods
Inc.
Critical Success Factors Weight Rating Score Rating Score Rating Score
1. Advertising 0.15 4 4 0.60 3
0.6 0.45
2. Global expansion 0.15 3 4 0.60 3
0.45 0.45
3. Market share 0.15 3 4 0.60 2
0.45 0.3
4. Customer loyalty 0.15 4 4 0.60 3
0.6 0.45
5. Profit margins 0.10 3 3 0.30 3
0.3 0.3
6. Attractiveness as employer 0.15 3 4 0.60 2
0.45 0.3
7. New product development 0.15 4 3 0.45 3
0.6 0.45

Total 1.00 3.45 3.75 2.70

SWOT ANALYSIS
 Strengths Weaknesses
1. Strong R&D 1. High long term debt (18.5 billion)
2. Increased organic revenues 2. Constant increase in current liabilities
3. Availability 3. Decrease in sales
4. Innovative advertising methods 4. Poor performance in North-American
5. Purchasing power segment
6. Focus on consumers
7. Strong distribution network
8. Strong brand image
9. User friendly website

Opportunities
1. Increasing trend in dining out [chance to Focus on retailers and restaurants O1,S1 Look for divestiture in poor performing
increase profit margins to businesses] segments
2. Growing demand for health and wellness Position itself as a healthy food producer Sell packaged coffees to cafes W4,O1
products O4,S3,S8
3. Decreased input costs [raw materials] Focus on ready to eat products O4,S6
4. Changing lifestyles Promote ready to drink beverages O4,S5,S8
5. Growth in the coffee market overall
6. Growth in global confectionary and snacks
market

Threats
1. Increasing trend in dining out Introduce low fat products T3,S6 Launch a sub-brand (brand extension) for a
2. Health concerns healthier range of products T2, W3
3. Increasing obesity rate Outsource operations to cheaper logistics
4. Inflation [transportation] partners T4,S7
5. Unfavorable impact of foreign currency
6. Intense competition
SPACE MATRIX
 External Factors Rating Average Rating
1. Financial Strength (FS)
 High Long term debt (18.5 Billion) 1 +3.71428
 Revenues increased to 42.2 Billion from 36.13 billion 5
 Liquidity increased from 567 million to 1.24 billion 5
 Saved $1.1 billion in 2009 through streamlined manufacturing 5
 Assets decreased from 67 billion to 63 billion 2
 Inventory decreased from 4 billion to 3.7 billion 4
 Receivables decreased from 5.1 billion to 4.7 billion 4

2. Competitive Advantage (CA)

 Strong Brand Name -1
 Largest Food Company in USA -1
 Available in over 150 countries -2
 New products -2
 Decrease in Sales -5 -2.14286
 Innovative advertising -1
 9.8% increase in pricing -3

3. Environmental Stability (ES)

 Rising costs of petroleum -5 -4.25
 Unfavorable impacts of foreign currency -5
 Brand conscious consumers -2
 Global recession -5

4. Industry Strength (IS)

 More people are dining out 3 +3.00
 Development of health products (Obesity Concerns) 1
 Steady Growth in US market for packaged and processed food 5
• FS & ES Total Score= -0.53571
• CA & IS Total Score = 0.857143
The graph shows that Starbucks should follow competitive strategies like
market penetration, product development and market development and
integration.
QSPM
• Strategy 1:
– A new line of low-fat products for the health
conscious segment
• Strategy 2:
– Develop the Maxwell House market by
introducing it to cafes.
 Strategy 1 Strategy 2
Key Factors Weight AS TAS AS TAS
Opportunities
1. Increasing trend in dining out (chance to increase profit 0.05 2 0.1 4 0.2
margins to businesses)
2. Growing demand for health and wellness products 0.10
3. Decreased input costs [raw materials] 0.15 2 0.3 2 0.3
4. Changing lifestyles 0.05
5. Growth in the market overall 0.10 4 0.4 2 0.2
6. Growth in global confectionary and snacks market 0.08 3 0.24 1 0.08
Threats
1. Increasing trend of dining out 0.05 4 0.2 4 0.2
2. Health concerns 0.10 3 0.3 3 0.3
3. Increasing obesity rates 0.08 2 0.16 1 0.08
4. Inflation [transportation] 0.1
5. Unfavorable impact of foreign currency 0.06
6. Intense competition 0.08 4 0.32 4 0.32
 Strategy 1 Strategy 2
Key Factors Weight AS TAS AS TAS
Strengths
1. Strong R&D 0.06 1 0.06 4 0.24
2. Increased organic revenues 0.07
3. Availability 0.05 2 0.1 3 0.15
4. Innovative advertising methods 0.04 3 0.12 4 0.16
5. Purchasing power 0.08 3 0.24 4 0.32
6. Focus on consumers 0.06 4 0.24 3 0.18
7. Strong distribution network 0.07 4 0.28 4 0.28
8. Strong brand image 0.10 4 0.4 4 0.4
9. User friendly website 0.03 2 0.06 4 0.12

Weaknesses 0.12 4 0.48 4 0.48

1. High long term debt (18.5 billion) 0.10 2 0.2 1 0.1
2. Constant increase in current liabilities 0.08 4 0.32 1 0.08
3. Decrease in sales 0.06 4 0.24
4. Poor performance of North-American segment 0.08 4 0.32 1 0.08
• Strategy 1 Total TAS: 5.00
• Strategy 2 Total TAS: 3.95
The recommended strategy for Kraft Foods
Inc. would be to introduce a new line of low-
fat products for the health conscious
segment.

• Position its products as a healthy and organic.

Thank you!