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SWOT Analysis of Kraft Foods

Kraft Foods has experienced success through mergers with popular brands like Cadbury and Heinz, and by utilizing a wide portfolio of popular brands and recipes. However, Kraft lacks presence in important markets like Europe and has declining sales volumes. Opportunities for growth include expanding in high-potential markets like India as food processing increases, and developing more nutritious products for growing markets like baby food. Threats include intense competition, regulatory compliance costs, and increasing input costs.

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465 views3 pages

SWOT Analysis of Kraft Foods

Kraft Foods has experienced success through mergers with popular brands like Cadbury and Heinz, and by utilizing a wide portfolio of popular brands and recipes. However, Kraft lacks presence in important markets like Europe and has declining sales volumes. Opportunities for growth include expanding in high-potential markets like India as food processing increases, and developing more nutritious products for growing markets like baby food. Threats include intense competition, regulatory compliance costs, and increasing input costs.

Uploaded by

Mihai
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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SWOT analysis of Kraft Foods

Strengths in the SWOT analysis of Kraft Foods:


Successful mergers: The primary reason for the success of Kraft Foods is the successful mergers they had with
companies like Cadbury’s and Heinz both of who were leaders and popular names in their own segments. Content marketing: As
the number of brands have grown so has the advertisement space and the customer mind is cluttered with information of all kinds
with the result that they forget the names of the brands.Kraft Foods was one of the earliest to start content marketing and they
continue to do so through their CRM initiatives. Wide product portfolio: The company owns a very broad product portfolio with a
presence in almost all categories of processed foods such as meats, marinades, sauces, salad dressings, dairy products,
chocolates, sandwich spreads, desserts, drinks, packaged meals, snacks, and condiments. Popular brands: Kraft Foods has a
host of popular brands under it namely Jello, Maxwell House, Oscar Mayer, Heinz, Cadbury’s. Lunchables, Velveeta, Philadelphia.
These popular brands increase the goodwill in the minds of the customer for the brand Kraft. Wide distribution channel in the
US: Kraft has an excellent distribution channel in the US and enjoys the trust and confidence of many retailers and wholesalers who
push their products more. Kraft Recipes: The main target audience for Kraft products are homemakers and in order to capture this
market Kraft has a very innovative way of including their labels in what is called as Kraft Recipes which are made using Kraft
products and mixes. This has helped them to capture the mindshare of their target audience.

Weaknesses in the SWOT analysis of Kraft Foods:


Weaknesses are used to refer to areas where the business or the brand needs improvement. Some of the key weaknesses of Kraft
Foods are:

Poor coverage in Europe and other markets: The company has poor presence in the markets other than the US like
Europe and India and by merging with Cadbury’s it is trying to capture those markets where the confectionery brand is popular.
Poor presence in organic markets: Most food processing companies are now entering into the organic foods market. But Kraft
Foods has little or no presence in the organic foods market. This can be a critical weakness the business. Declining sales
volumes: The sales volume for the Kraft Food brands have been decreasing owing to competition from multinational companies as
well as domestic players. The high range of choices that customer has prevents them from being loyal to one single brand. Too
many products and brands: The company is overburdened with too many products under it and in an age of innovation it is
important to innovate in each of its products which is becoming impossible considering the numbers to be managed.

Opportunities in the SWOT analysis of Kraft Foods:


Opportunities refer to those avenues in the environment that surrounds the business on which it can capitalize to increase its
returns. Some of the opportunities include:

High scope for food processing in India: The next big market for processed food will be India since the average per capita
income is growing.Yet another advantage with India will be the proximity to raw materials since the country is predominantly
agricultural. Changes in consumption patterns: In emerging economies, there is a shift of trends towards habits which were once
concerned Western is now becoming the norm globally. Some of the habits include the preference for pre-processed food and
growing need for cheese, butter and other dairy products. Growing foodservice industry: The foodservice industry is expected to
grow rapidly in the near future due to improving lifestyle and rapid urbanization.  Any potential demand created could be tapped
easily by Kraft Heinz. Nutritious Products: Increasing health awareness across the globe results in increasing demand for
nutritious and trans-fat free products. Kraft Heinz is taking care of the increasing awareness towards health and is using the range of
nutritious foods for adults as well as babies. The company should further look forward to expanding its product portfolio to include
more nutritious products. Growing Baby Food market: With the increase in incomes and changing lifestyle, the baby food market
is growing around the globe. The global baby food market is expected to grow at a CAGR of 8% till 2019. Kraft offers a wide range
of baby food and instant formula products and is set to benefit from the growth.

Threats in the SWOT analysis of Kraft Foods:


Threats are those factors in the environment which can be detrimental to the growth of the business. Some of the threats include:

Cost Fluctuations: Food processing industry is highly dependent on the raw materials which are primarily farmed and the costs of
which fluctuate excessively. It may not be possible to accommodate these fluctuations in the prices. Intense competition: Kraft
Heinz is subjected to competition from various companies across product categories and geographies. Its major competitors
are Nestle, ConAgra Foods and PepsiCo etc. Higher competition forces a company to spend more on promotions and also induces
price wars which affect revenues and profitability. Safety Regulations: The food safety regulations around the world have become
stringent over the years and thus a food company has to pass through various norms by the food regulation authorities in various
countries. This increase compliance costs for the company. Increasing Labour wages: The labour wages in the developed
countries, especially in the US, Canada and Europe, are increasing year on year which increases the company’s expenditure and
hence affects margins.

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