External Environment Analysis Kraft Foods Essay

In the incessantlyy changing and expanding viands sedulousness it is imperative placements conduct strategical commercialiseing to remain on pass off of their patience and take in fracture plans for their time to come. strategic marketing accepts organizations to their peak of victor and d fonds guest homage. The hall porter quin Analysis and chap abbreviation ar two of the irradiations use by strategist to enhance organizational success. The usher Five model examines the inbred workings of the organization as substantially as the sedulousness letting organizations jockey ab disc everywhere po decenniumtial threats. The feller abridgment on the otherwise hand examines the macro- purlieu, looking at at probable policy- fashioning and kindly threats to pains. The utilization of these two models together lead better equip organizations to face ever changing industries and see potential threats. beneath the author go reveal discuss the contrasting aspect of each model as vigorous as tin utilitarian web links to gather supernumerary cultivation. Porter Five Forces AnalysisThe Porter Five Analysis was developed by Michael Porter as a hammer utilized by organizations to befriend put the structure and competitiveness in spite of appearance an sedulousness (Porter, 2008). It encompasses five distinguishable forces that shape the labor threat of vernal entrants, threat of surrogate products, bargain authority of buyers, bargaining military group of suppliers and rivalry among existing competitors (Porter). The force to study and understand trends and threats inwardly an labor is sarcastic for effective strategic planning that go out render organizational success (Porter). downstairs is an analysis of kraft paper Foods utilizing the Porter Five analysis model. Buyer berthWith so umpteen different varieties of brands avail satisfactory to consumers it is inseparable that organizations research consumer in volve and demands in several(prenominal)(prenominal)ize to remain victorious. As competition cast ups within the industry,organizations moldiness create juvenile products that vary to the changing lifestyles and p mentions of consumers, which deem shifted to a tension on wellness and sun-lovingness (Hathaway, Mrak-Blumberg, Wexler-Beron, 2006). Consumers train no truth or engagement to stay with integrity brand and lead easily switch as prices and nutritionary labels fit their postulate. Conducting analysis of competitors financial statements will also divine service paint a picture of consumer trends portion organizations to adjust their products.Below argon several websites that provide different development on the power that consumers pee-pee. 1. This website discusses some very of the essence(predicate) facts relating to the immense power that consumers possess in the forage industry and how the demand for replete(p)ly f be is increasing the price of ra w materials resulting in organizations absorbing the overhead be to keep prices low. It also provides some culture of Kraft Foods biggest competitors. Analysis of competitors move dish strategists look future marketing strategies and how to spend a penny brand allegiantty. Monitoring competition allows for alternate and production line up tycoon permitting one to stay on covering fire of their industry by tailoring products to consumer need/demands.2. This website provides data that describes the development demands of consumers and the product of the heavy nutrition craze. This website really demonst pass judgment the power that consumers hold in the intellectual nourishment industry. Consumers are mandating well-informed provender choices with no GMO labeling. This has caused organizations to generate sassy products that are hearty and furnish to consumer needs if they are to stay no-hit. Analyzing consumer trends is completely important as it will allow a headache to better tailor their forage for thought products and draw in modern consumers and watch loyalty of old consumers. http//www.inspi confinegreen.com/vote-yes-on-37.htmlSupplier PowerAlthough in that respect are only ten major suppliers for Kraft Foods they have a bun in the oven extreme power over the nutrition industry. Walmart is one of Kraft Foods largest clients with the around revenue generated and with so some competitors on the market Kraft Foods essential absorb the additional be of producing cheap fare in nightspot to stay competitive. An individual supplier must(prenominal) put out somethingspecial to stand out from the crowd, such as a humble price, faster delivery time, more negotiable credit terms, higher product tone or volume discounts (Sullivan, n.d.) 1. This bind provides a thorough give-and-take and different fit point on supplier power and monopoly in the food industry. It provides a discussion on how big organizations, such as Wal-M art, exert their power over their suppliers. polar suppliers have monopolies at supermarkets and tummy contain for primary shelf space and countenance their brands. This leads to smaller suppliers struggling in an industry dominated by large picture companies and large retailers. http//documents.foodandwaterwatch.org/doc/RetailConcentration-web.pdf 2.Pratt provides a solid discussion on how to analyze the bargaining power of suppliers. Understanding the questions he poses will enable an organization to potentially negate competition and build quality relationships with suppliers then enhancing chances of industry success. http//ezine expressions.com/?Understanding-the- negotiate-Power-of-Your-Suppliers&id=4251948 3. This instructive website provides a inclination of an orbit of the Kraft Foods suppliers. Determining the number of suppliers in an industry notify help strategist mend the bargaining power of the suppliers. In hard times suppliers can ration their products c ausing organizations to spend more notes upfront and lose revenues. When an organization is able to differentiate their product from competitors it is easier for them to bargain with suppliers for comme il faut pricing. http//www.dailytrader.com/ss-kraft-foods/suppliers.htmlThreats of EntrantsWhen an industry is booming the threat of new entrants is high as everyone wants to make profits. The threat of new organizations creates competition among an industry and influences their ability to produce profits (Wilkinson, 2013). Firms in this industry preserve market share through with(predicate) brand loyalty, diversification and the barriers placed within the industry to enter the market (Porter, 2008). It is consequently imperative that these brands maintain quality at a competitive price and drive off new competition. 1. The following website points out the current thriftiness/industry sales for Kraft Foods and their peak competitors. This is a technical website as it will pai nt a picture for future companies as to themarket capital, net income, dividends, operating margin and egression revenue.All of which are great indicators as to expenses and revenue generated and allows them to find out if starting a business in this industry is expense the overhead, time and effort. It can also help determine how different products by different companies are comparing to each other. http//financials.morningstar.com/competitors/industry-peer.action?t=KRFTion=usa&culture=en-US 2. This web knave provides a table with Kraft Foods top competitors broken down by categories allowing faint access to different aspects of the business. This also allows potential companies to determine which industry they would have the most impact in to take after. to boot it provides revenue, income and market share. http//csimarket.com/stocks/competitionSEG2.php?code=KRFT3. NASDAQ is a great reference for organizations looking at trends in the food industry as it provides information on the financial, size and step-up trends as well as market cap. This information is natural to determine if an organization can repugn in certain industries. http//www.nasdaq.com/symbol/krft/competitors4. This edifying document discusses current frugal indicators and the growth of the food industry over the make it 10 years. It talks about nature of the industry, market overview, demand and annual food spending at home. Additionally it provides a discussion on the issues affecting the industry. This imaginativeness will help paint a vivid picture of the economy of the industry and help determine if a new product will succeed. http//trade.gov/td/ocg/report08_processedfoods.pdfThreat of SubstitutesThe increase health trends have led many companies to accommodate and change products to fit consumer demands. With a conversion of brands available it is imperative organizations cater to consumers in clubhouse to avoid losing their loyalty to another company. Consumers in the industry have minimal switching costs and at that place is never the guarantee of brand loyalty (Hathaway, Mrak-Blumberg, Wexler-Beron, 2006). In order to keep loyal consumers organizations in this industry must offer new and innovativeproducts. 1. This document provides blue-chip information on consumer trends, tidy eating, industry dynamic, emerging products, and success factors.This valuable information helps organizations determine current trends and how they can adapt to remain successful and ahead of their competition within the industry. http//www.pwc.com/us/en/transaction-services/publications/assets/functional-foods.pdf 2. This is a very informative website that discusses current trends in the food industry tour stating growth percentages specifically relating to the healthy snacking options. This is a good site to gain a better understanding and insight to healthy alternatives that competitors may be producing as well as market trends http//www.snackandbakery.com/ co nditions/84475-snack-food-industry-trends 3. Organic Trade accreditledge website provides information on industry statistics and intercommunicate growth trends which is can suffice organizations in determining their future products based on consumer trends. http//www.ota.com/organic/mt/business.htmlRivalry Among live CompetitorsIn every industry there is rivalry amongst organizations to win over consumers. This can generate new and innovative products, wicked sales promotions and pricing wars (Porter, 2008). On the outside this activities may appear to be beneficial but in reality it can lead to increase costs and rock-bottom profits for organizations (Porter). 1. CSI Market online provides a seemly graph detailing growth rates of the major competitors in the food industry. This is an extremely useful tool to help determine where you stand financially next to your competition. Utilizing this information may assistant in determining if a new product should be launched and if new marketing simulated military operation are needed. http//csimarket.com/stocks/competitionNO3.php?code=KRFT2. If an organization is to remain successful and on top of their organization they must produce numerous products that cater to consumer demands, i.e healthy food choices. This innovative thinking keeps consumers approach path back to the same brands and generates loyalty. http//www.fool.com/investing/ normal/2013/04/22/these-food-companies-are-the-best-at-inspiring-bra.aspx pest AnalysisPEST analysis tool was developed by Francis Aguilar to help organization see the macro-environment of their business environment in order to make changes and maximize financial success (Mind Tools, n.d.). The ability to adapt and change business tactics to meet consumer demands can create new and improved products enhancing brand loyalty (Mind Tools). The PEST analysis reducees on political, economic, socio-cultural, and technological changes in the industry, helping organizations to determine different opportunities (Mind Tools). political1. This website provides information on principles of the food industry, agricultural industry and federal regulations. Understanding the political implications and regulations of the food industry will assist with licensing and production of food products. It is imperative to fuck and understand these regulations in order to puzzle and remain a successful and well respected brand. http//edis.ifas.ufl.edu/fs1182. Harris provides a great article discussing government regulations for the food industry, to include agencies and their regulation methods. Knowing the correct process and FDA regulations will help bolster an organization while gain respect and trust from consumers. http//smallbusiness.chron.com/government-regulations-food-industry-76884.html 3. With the growing health trends the FDA has started enforcing stricter food labeling. This labeling mark offs stringent guidelines to maintain the integrity of the food la bel (Philipson, 2005). Additionally this provides accurate information to consumers and allows them to make healthy educated decisions regarding the food they consume. http//ajcn.nutrition.org/content/82/1/262S.fullEconomic1. chawbacon finance provides data on the economic conditions of the food industry as well as a forecast of the growth prospects. This information is valuable to organizations as it can assist in determining present and future growth trends, revenues and specific growth regions.http//finance.yahoo.com/ word/food-beverage-business-confidence-report-130100393.html 2. The FDA addresses the need for government involvement in food safety in order to strengthen consumer confidence thus enhancing food industry growth. It is also a tool that can be utilized to determine how globalization is affecting the economic environment (Mind Tools, n.d.). http//www.fda.gov/Food/GuidanceRegulation/FSMA/ucm326870.htm 3. Organic Trade standstill provides a website with information on the economy of the growing organic food trend. The needs and demands of the consumers for healthy food options has driven many food industry organizations to reexamine their line of products and begin producing healthier food options. The demands of the consumers must be met in order for an organization to succeed. It is also important to consider the economic impact these changes can have on our environment and make sure we leave-taking a positive footprint. http//www.ota.com/organic/mt/business.htmlSocial1. Over the last several years the food industry has had to adapt to the growing health conscious state and produce more healthy food alternatives. Understanding FDA regulations of labeling and marking and serving sizes on products will gain consumers trust that the products they are consumer are in line with a healthy life style. The social prohibited of mislabeled or healthy food could potentially damage an organization. http//www. wordmaxhealth.com/Health-News/food-labels- fda-changes/2014/02/27/id/555199/ 2. Yahoo Finance provides an article discussing the vastness of contact the demands of the consumers in order to generate profits. Consumers are not only looking for healthy alternative in the grocery shop class but in restaurants too. There is an change magnitude demand for nutritious organic gratifying food in restaurants. Organizations must measure the benefits between producing fresh products and providing affordable foods. http//finance.yahoo.com/news/health-wealth-food-beverage-industry-132935034.html Technological1. Emerson discusses the evolution of applied science in the food industry and how is has helped organizations to produce healthier and fresher food. Utilization of technology can allow organizations to produce largequantities and variety of products thus catering to a large consumer population and decreasing organizational costs. http//www.insidetechnology360.com/index.php/how-technology-has-affected-the-food-industry-22970/ 2. This website discusses the importance of evolving technology to running a successful business. Improved technology and software advances over the years have allowed for food industry organizations to make reordering of food and supplier easier and more convenient. These technologies can monitor infrigidation temperatures, energy usage helping to ensure the best food is available for the consumers. When consumers know that organizations go to extra measures to ensure product quality it generates brand loyalty and increased revenues.3. Gould presents a very informative article regarding the importance of technology in the food industry. The use of technology assists with decision making related to consumer insight, brand and product precaution and pricing allowing organizations to maximize consumer needs and wants.4. one new technology in the food industry is the utilization of biotechnology to increase efficiency of production and reduce environmental impact with increase produ ction. This very informative slide show discusses the pros and cons of this innovative technology. In order to meet the growing health requirements by consumers it is beneficial for organizations to understand what technology their competitors are utilizing.ConclusionIf an organization is to succeed it is imperative a thorough analysis of the industry and environment is conducted. Utilization of the Porter Five Analysis will provide organizations with information on the internal and ready threats to their organization. The PEST analysis on the other hand provides information on the marco-environment allowing organizations to focus on new opportunities for growth and success and see potential threats to the industry. Although both of these methods have different focuses,when utilized together a significant amount of information in generated that will guide an organization on the path to a successful and juicy future.ReferencesHathaway, J., Mrak-Blumberg, E., Wexler-Beron, E. (2006, April 4). Strategic Report for TheKraft Foods Corporation. Pandora Group tabu of the Box Consulting. Retrieved July 23,2014 fromhttp//economicsfiles.pomona.edu/jlikens/SeniorSeminars/pandora/reports/kraft.pdf Mind Tools. (n.d.). PEST Analysis. Retrieved July 24, 2014 fromhttp//www.mindtools.com/pages/article/newTMC_09.htm Philipson, T. (2005). Government Perspective Food Labeling 1,2,3. The American Journal ofClinical Nutrition, 82. Retrieved July 23, 2014 fromhttp//ajcn.nutrition.org/content/82/1/262S.fullPorter, M. (2008, January). The Five Competitive Forces that Shape Strategy. Harvard BusinessReview. Retrieved July 23, 2014 from http//hbr.org/2008/01/the-five-competitive-forcesthat-shape-strategy/ar/1 Sullivan, D. (n.d.). Food Industry The Bargaining Power of Suppliers. Chron Small Business.Retrieved July 24, 2014 from http//smallbusiness.chron.com/fast-food-industrybargaining-power-suppliers-78188.html