Kraft Foods 2009 QSPM
Kraft Foods 2009 QSPM
Kraft Foods 2009 QSPM
GRADUATE SCHOOL
STRATEGIC MANAGEMENT
CASE BACKGROUND
Give a summary of the salient case facts that indicate the firms mission, past and current
objectives, strategies, as well as its historical growth in terms of financial performance and
condition. Discuss the current issues and concerns of the companys top management.
II.
ENVIRONMENTAL ANALYSIS
Threats
Socio-Cultural Env
Political/Legal Env
Technological Env
Economic Env
Opportunities are those favorable conditions that could affect the strategic decisions of the
company.
Threats are those unwanted conditions that could affect the business
environment.
2. Industry Environment
Industry Environment
Rivalry
Bargaining Power of Consumer
Bargaining Power of Customer
New Entrants & Entry Barriers
Threats from Product Substitution
Opportunities
Threats
Identify the opportunities and threats in the industry where the company operates and
competes
and those affecting the competitive forces.
Weight
Rating
Weighted Score
Threats:
Total Weighted Score
Conclusion:
Evaluate the general environment and industry environments using the EFE. A Total Weighted Score of
2.5 and above means favorable opportunities for the company. Otherwise, threat outweighs
opportunities.
Functional Areas
Finance
Marketing
Org & Mgt
Prod
MIS
Strengths
Weaknesses
Weight
Rating
Weighted Score
Weaknesses:
Total Weighted Score
Conclusion:
C. Competitive Position
Competitive Positions:
Capitalization
Employees
Advertising
Market Reach
Gross Revenue
Net Income
Company A
Company B
Company C
Capitalization
Employees
Brand reputation
Successful new introductions
Market Share
Total
Conclusion:
Company A
Weight Rating Score
Company B
Rating Score
Company C
Rating Score
E. Assumptions
1.
2.
3.
4.
III.
Weaknesses
Opportunities
Threats
2. IFE/EFE Matrix
EFE
3. SPACE Matrix
Strong (3.0
4.0)
I
IV
VII
IFE
Average (2.0
2.9)
II
V
VIII
Q2
WCP
SCP
Q3
Q4
SMG
5. SUMMARY OF STRATEGY
STRATEGY
OPTIONS
TOWS
IFE/EFE
SPACE
GSM
TOTAL
Opportunities
1.More people are dining out, and
food producers are devoting more
attention to products designed for
restaurants, vending machines, and
other foodservice providers.
2.Worldwide, demand is also on the
rise for packaged type of food as
more people adopt a lifestyle that
includes less time for the
preparation of food.
3. World population is growing at
2.6%
4. Expiration and renegotiation of
commodity prices in mid-2008 will
expect to lower the production cost
of baked products relying on wheat,
eggs and natural gas.
5. Enhance waters containing
vitamins or supplements are
gaining popularity
Threats
1.Public health concern of chemical
and bacterial contamination.
2. Rising cost of petroleum affects
cost of production and logistics
3. Rising rate of obesity. People are
more health conscious
4. U.S. dollar gains making export
less competitive
5. ConAgra Foods primary
competitor domestically (North
America) together with other
domestic stores such as Heinz
Company and Sara Lee.
Strengths
1.Highly leveraged with 84% debtto-equity ratio for 2008 which
means making profit out of others
money. Financially capable for
acquisition.
2. Early user of all communications
media (outdoor billboards, journals,
WEIG
HT
MARK
ET
PENE
TRATI
ON
Rati
ng
INTEGRATI
ON
STRATEGIE
S
Weig Rati
ht
ng
MARKET
DEVELOPMEN
T
Weigh Rati
t
ng
Weig
ht
0.2
0.8
0.2
0.6
0.2
0.1
4
2
0.8
0.2
2
3
0.4
0.3
3
2
0.6
0.2
0.1
0.2
0.2
0.2
0.1
0.3
0.1
0.2
0.1
0.2
0.2
0.2
0.1
0.1
0.1
0.2
0.05
0.1
0.1
0.1
0.025
0.02
5
0.1
0.025
0.025
0.05
0.05
0.07
5
0.2
0.4
0.8
0.4
0.05
0.15
0.05
0.15
magazines, radio)
Good product recall
3.Effective launch of several
0.05
websites for advertising and
publicity (Oreo Double Stuf Racing
League (DSRL)eague (DSRL)
4. Food safety program has been
0.2
adopted as issues of chemical as
issues of chemical and bacterial
contamination and new food-borne
0.2
pathogens remain a public health
concern.
5. . Actively researching consumers
eating habits and preferences at
home and at Restaurants. Good
marketing research program.
Weaknesses
1.Weak liquidity ratios of 1.03x and
0.63x current ratio for 2008 and
2007 respectively also 0.54x and
0.34x acid-test ratio for 2008 and
2009 respectively.
2. Negative revenue growth rate for
US Cheese (9%), Canada & North
American Foodservice (10%) and
European Union (17%)
3. Divisions are determined by
geographical area and not by
product
4.Geographic concentration on
North America
5.Kraft Foods has low market share
but enjoys high margin in grocery
business.
Total
V.
0.2
0.05
0.15
0.4
0.4
0.4
0.6
0.4
0.6
0.1
0.1
0.2
0.1
0.05
0.05
0.05
0.05
0.05
0.04
3
3
0.15
0.12
2
2
0.1
0.08
4
4
0.2
0.16
0.06
0.24
0.12
0.12
4.77
35
4.05
4.525
Function
al areas
Marketing
Objective
Strategy
Tim
e
Fra
me
2
mos.
6
mos.
Budg
et
Productio
n
Organizati
on
Finance
HRD
Familiarize companys
standards in a different
cultural environment.
VI.
1.
2.
3.
4.
3
mos.
2 yrs
3
mos.
2
yrs.
1 yr.
2 yrs
2
yrs.
3
mos.
1
mo.
2 yrs
1
mo.
1
mo.
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