Kraft Foods Analysis
Advanced Finance
Intervenant/ Lecturer : Michael PAYTE
MSc Audit & Management Control
Academic Year 2012-2013
Gaelle VANHERPE Maxime ROZIER Yao LIU Marion DOMANSKI
TABLE OF CONTENTS
GAELLE’S PART
PORTER’S 5 + 1 FORCES
Competitive Rivalry within an Industry Very high – Kraft Foods has to face a lot of competition
International: Nestlé and Danone are the two main competitors. There are present worldwide and exploit the same segments as Kraft Foods.
National: Companies which are present in only one country but which propose products such as biscuits, dairy products… Example: Michel & Augustin, St Michel, la Mère Poulard (France) Regional: Smaller companies which are present in only few regions and propose traditional products. Most of the time, these companies are familial businesses.
Threat of Subsitute Products Very high – The threat of substitute products is high because customers can choose between several products for the same purpose. Therefore Kraft Foods has to make a lot of efforts regarding the taste, the quality, the packaging, the price of its products in order to attract the customer and encourage him to choose a Kraft Foods’ product instead of one which belongs to competitors. Moreover, the main threat for Kraft Foods also remains in the fact that a lot of supermarkets such as Auchan, Carrefour, Leclerc or Casino are producing their own brands of biscuits, chocolates etc. With the financial crisis and the decrease in the purchasing power, customers might prefer a non-branded product because of low prices.
Bargaining Power of Suppliers High – Kraft Foods purchases large quantities of commodities, including dairy, coffee, cocoa, wheat, corn products, soybean and vegetable oils, nuts, meat products, and sugar and other sweeteners. In addition, the company uses significant quantities of plastic, glass and cardboard to package our products, and natural gas for our factories and warehouses. The bargaining power of
Intervenant/ Lecturer : Michael PAYTE
MSc Audit & Management Control
Academic Year 2012-2013
Gaelle VANHERPE Maxime ROZIER Yao LIU Marion DOMANSKI
TABLE OF CONTENTS
GAELLE’S PART
PORTER’S 5 + 1 FORCES
Competitive Rivalry within an Industry Very high – Kraft Foods has to face a lot of competition
International: Nestlé and Danone are the two main competitors. There are present worldwide and exploit the same segments as Kraft Foods.
National: Companies which are present in only one country but which propose products such as biscuits, dairy products… Example: Michel & Augustin, St Michel, la Mère Poulard (France) Regional: Smaller companies which are present in only few regions and propose traditional products. Most of the time, these companies are familial businesses.
Threat of Subsitute Products Very high – The threat of substitute products is high because customers can choose between several products for the same purpose. Therefore Kraft Foods has to make a lot of efforts regarding the taste, the quality, the packaging, the price of its products in order to attract the customer and encourage him to choose a Kraft Foods’ product instead of one which belongs to competitors. Moreover, the main threat for Kraft Foods also remains in the fact that a lot of supermarkets such as Auchan, Carrefour, Leclerc or Casino are producing their own brands of biscuits, chocolates etc. With the financial crisis and the decrease in the purchasing power, customers might prefer a non-branded product because of low prices.
Bargaining Power of Suppliers High – Kraft Foods purchases large quantities of commodities, including dairy, coffee, cocoa, wheat, corn products, soybean and vegetable oils, nuts, meat products, and sugar and other sweeteners. In addition, the company uses significant quantities of plastic, glass and cardboard to package our products, and natural gas for our factories and warehouses. The bargaining power of