Porter’s 5 Forces and Pest Analyses of Kraft Foods Essay

ABSTRACTThis paper will show the various analyses of doorkeepers 5 Forces upon kraft feeds as well as a expletive analysis of external factors influencing the company. Porters 5 Forces be industry environments1. The threat of new entrants to the nutrients industry (low) Online market shopping is proving to be a mastermindidable threat. (Food retail Industry, 02/2/12) 2. The bargaining power of suppliers (medium to high) farming has been impoverished by the U. S. drouth in 2011-12 causing enormous outlet of crops and animals. This devastation has resulted in less supply and much higher expenditure collects. (Lempert, P. 12/12) 3. The bargaining power of customers (medium to high) Poor economic conditions, obesity and former(a) health concerns mean customers are demanding healthier foods and snacks (Lempert, P. 12/12 tiddler boomers, millennials, and cultural diversity are using smartphones and apps to search for mistakable products at better prices (Food Retailing 2/2/1 2). 4. The availability of substitutes (low)Grow your own, demoralise fresh foods, and eating out would be alternatives to Krafts processed foods. (Kraft Annual Report 10K 12/31/11). For most consumers, conviction and bullion 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 fortune considering there is a greater demand for cereal nationwide. Other remarkable competitors are General Mills, Hershey, Nestle, and PepsiCo. (Kraft Foods Annual Report 2011). PEST analyses represent macro-environment1. policy-makingIn 2011, political upheaval in Egypt compel Kraft to immobilize operations there (Just Food 2/11). Of the 300 workers, 250 joined to form a Union. In 2012, the new government instituted a social valuation reserve which Kraft refused to pay resulting in a 3-day sit-in. Kraft fired fivesome board members hoping to eliminate the union (IUF, May, 2012). This has caused much negative public relations. The Cadbury tanning (Chellel, 5/23/11) also tarnished Krafts reputation.2. Economic drought has caused raw products prices to rise. Unemployment has caused Americas middle class to shrink from 61% in 1971 to 51% in 2011 (Lempert, P 12/12)3. SocioculturalThe demand for healthier foods and snacks will cause Kraft to examine methods to provide these. The alter of packaging and marketing will be necessary (Lempert, P. 12/12).4. skilfulThe impact of social networks such as Facebook and Twitter can fork out devastating effects on Krafts reputation (Lempert, P. 12/12). Customers have access to apps that direct them to online mart shopping and availability of standardised products at lower prices.Porters 5 forces and PEST analyses of Kraft FoodsIn this paper, I will examine the effect of Porters 5 forces upon Kraft Foods Industry. I will present sources to validate those effects and explain how those sources are relevant. I will also present a PEST ana lysis using the information gleaned from the previous sources. The references will be critiqued.Porters 5 forcesThreat of New Entrants (low) Food Retailing Industry Market Research Reports, Statistics and Analysis http//www.reportlinker.com/ci02212/Food-Retailing.html. This site reports new trends in the retail food industry. It brings the information down to the customer in the grocery store who may now be using a smartphone to remember a better price of a comparable product. The consumers bound time and demand for quality may be a drive force for online grocery purchases. Since Kraft sells mainly to large resellers, online suppliers may non offer their products. The strength of this article is that it concerns how the end consumer may be unbidden to change to private label or store brands to save time and money. It is useful in conducting an external evaluation because it focuses on how the consumer is changing grocery shopping and brand allegiances. Its weakness is that it c oncerns only the retail food industry. It does not address new manufacturing entrants to the food industry.The bargaining power of suppliers (medium to high) Lempert, P. Top cristal Food Trends December 21, 2012 http//www.factsfiguresfuture.com/issues/december-2012/top-ten-food-trends-2013.html. Phil Lempert, the supermarket guru, talks about the devastation that the United States drought in 2012 has caused in the food industry. There were enormous losses of some(prenominal) crops and animals. Because of this situation, suppliers have less supply and demand higher prices. Higher prices of groceries has forced the consumer to take note of how much food is being wasted and spend those grocery dollars in good snacks and healthy meals The author of this article, Phil Lembert, is an author, speaker, and food expert.His consumer circuit board of more than 100,000 opt-in participants contributes to his website. The strengths lie in the reliability of the author and his work. He address es many different food trends for this New Year that will impact food manufacturers. However, Lempert only writes from the customers point of view, not the manufacturer. This is an especially cooperative site to find several factors needed to do a PEST analysis for Kraft, including bargaining power of suppliers. The bargaining power of customers (medium to high) Lempert, P. Top disco biscuit Food Trends (December 21, 2012) http//www.factsfiguresfuture.com/issues/december-2012/top-ten-food-trends-2013.html.Once again, Phil Lempert cites the bargaining power of customers in his article. Poor economic conditions have necessitated smarter use of grocery dollars. The grocery shopper wants quality products for a fair(a) price. Pre-packaged whole meals have given way to more home cooking. Food Retailing Industry Market Research Reports, Statistics and Analysis (February, 2012) http//www.reportlinker.com/ci02212/Food-Retailing.html. Improved applied science is adding to the clout that c ustomers have. Baby boomers and millennials are using apps to search out similar products at better prices.