Kraft Foods and the Five Forces Model

Kraft Foods and the Porter Five Forces Model

John E. Banks

Trident University International

April 16, 2013

Prepared for MGT599 Strategic Management

Porter five forces analysis is a structure for industry evaluation and business approach growth plan. It represents an industrial organization (IO) economics to determine five forces that are underlying factors that drive the competitive force and appeal of a market. Appeal in this situation denotes to the total industry value. The opposite is "unappealing" industry is one that is the combination of these five forces acts to force the profit of industry downward.

The external analysis environment that would need to conduct and exhaustive and comprehensive review of Kraft foods is listed below in terms of data sets and variables that must be addressed.

a. Threat of New Entrants (a) - In terms of Kraft, the types of information that becomes invaluable in this analysis is: cost advantage ratio; brand identity and loyalty, availability of distribution channels; and proprietary products. The analysis covers a wide range of variables, however in the first force, it is imperative that identification of key variables which will allow a comprehensive analysis ways and means.

b. Buyer Power (b) - The data that would be required for in-depth and comprehensive analysis would be concentrated buyers’ percentage; buyers switching costs; buyers fragmented influence; producers supply; and buyers maintain viable integration threat. These variables must be identified and rationalized within this phase or force of the model.

c. Rivalry (c) - The data that is imperative for analysis is the determination of a competitive advantage; resolve industry concentration; threat of substitute product lines; changing of pricing and costing; utilizing creative channels of distribution; and a slow market growth percentage. The categories within this force of the model it must be stated and analyzed for a proper and...