Porter's 5 Forces and Pest Analyses of Kraft Foods
Running head: ANALYSES FOR KRAFT FOODS
Porter’s 5 forces and PEST analyses of Kraft Foods.
MGT 599 Module 2 SLP
ABSTRACT
This paper will show the various analyses of Porter’s 5 Forces upon Kraft Foods as well as a PEST analysis of external factors influencing the company.
Porter’s 5 Forces are industry environments: 1. The threat of new entrants to the foods industry (low)
Online grocery shopping is proving to be a formidable threat. (Food Retailing Industry, 02/2/12) 2. The bargaining power of suppliers (medium to high)
Agriculture has been impoverished by the U. S. drought in 2011-12 causing enormous loss of crops and animals. This devastation has resulted in less supply and much higher price demands. (Lempert, P. 12/12) 3. The bargaining power of customers (medium to high) Poor economic conditions, obesity and other health concerns mean customers are demanding healthier foods and snacks (Lempert, P. 12/12 Baby boomers, millennials, and cultural diversity are using smartphones and apps to search for similar products at better prices (Food Retailing 2/2/12). 4. The availability of substitutes (low) Grow your own, buy fresh foods, and eating out would be alternatives to Kraft’s processed foods. (Kraft Annual Report 10K 12/31/11). For most consumers, time and money constraints would preclude these alternatives. 5. The degree of rivalry among competitors (high) Kellogg holds 34.2% of the cereal market. This is a large percentage considering there is a greater demand for cereal nationwide. Other significant competitors are General Mills, Hershey, Nestle, and PepsiCo. (Kraft Foods Annual Report 2011). PEST analyses represent macro-environment: 1. Political
In 2011, political upheaval in Egypt forced Kraft to suspend operations there (Just Food 2/11). Of the 300 workers, 250 joined to form a Union. In 2012, the new government instituted a social allowance which
Porter’s 5 forces and PEST analyses of Kraft Foods.
MGT 599 Module 2 SLP
ABSTRACT
This paper will show the various analyses of Porter’s 5 Forces upon Kraft Foods as well as a PEST analysis of external factors influencing the company.
Porter’s 5 Forces are industry environments: 1. The threat of new entrants to the foods industry (low)
Online grocery shopping is proving to be a formidable threat. (Food Retailing Industry, 02/2/12) 2. The bargaining power of suppliers (medium to high)
Agriculture has been impoverished by the U. S. drought in 2011-12 causing enormous loss of crops and animals. This devastation has resulted in less supply and much higher price demands. (Lempert, P. 12/12) 3. The bargaining power of customers (medium to high) Poor economic conditions, obesity and other health concerns mean customers are demanding healthier foods and snacks (Lempert, P. 12/12 Baby boomers, millennials, and cultural diversity are using smartphones and apps to search for similar products at better prices (Food Retailing 2/2/12). 4. The availability of substitutes (low) Grow your own, buy fresh foods, and eating out would be alternatives to Kraft’s processed foods. (Kraft Annual Report 10K 12/31/11). For most consumers, time and money constraints would preclude these alternatives. 5. The degree of rivalry among competitors (high) Kellogg holds 34.2% of the cereal market. This is a large percentage considering there is a greater demand for cereal nationwide. Other significant competitors are General Mills, Hershey, Nestle, and PepsiCo. (Kraft Foods Annual Report 2011). PEST analyses represent macro-environment: 1. Political
In 2011, political upheaval in Egypt forced Kraft to suspend operations there (Just Food 2/11). Of the 300 workers, 250 joined to form a Union. In 2012, the new government instituted a social allowance which
References: Chellel, Kit (5/23/2011) eFinancial News. Kraft vs. Cadbury: A bittersweet deal. Retrieved 2/3/13 from http://www.efinancialnews.com/story/2011-05-23/kraft-cadbury-bittersweet-deal. IUF newsier (2012) Kraft Egypt removes union leaders who called for company to obey the law! Retrieved 2/1/13 from http://cms.iuf.org/?q=node/1889 Kraft Annual Report, (12/31/2011) Form 10K Retrieved 1/31/13 from http://quote.morningstar.com/stock-filing/Annual-Report/2011/12/31/t.aspx?t=:KFT&ft=10-K&d=79e2c83f0f96a172d195dbf3a3cc6579 Kraft Foods SWOT analysis Retrieved 2/1/13 from http://yousigma.com/comparativeanalysis/kraftfoods.html Lempert, Phil (12/21/2012) Top ten food trends. Facts, Figures, Future. Retrieved 2/1/13 from http://www.factsfiguresfuture.com/issues/december-2012/top-ten-food-trends-2013.html Reports, Statistics and Analysis (2/2/12). Food Retailing Industry: Market Research Retrieved 1/31/13 from http://www.reportlinker.com/ci02212/Food-Retailing.html