Beruflich Dokumente
Kultur Dokumente
GRADUATE SCHOOL
STRATEGIC MANAGEMENT
Submitted by:
Prof. Murallos
Submitted to:
Jerwin Tubay
Study
Odessa Jarina
Michelle Lou
Statement &
Kraft Case
Assumptions
Problem
Alternative Courses of Action
A. Assumptions
1.
2.
3.
4.
Financial ratios
Current Ratio
Acid test ratio
Debt-to-Equity Ratio
Asset-to-debt ratio
Accounts Receivable
turnover
Inventory turnover
ROE
ROA
I.
Expected steady growth of packaged and processed food in US market which will give
large profit in retail sales.
Increase in worldwide demand because people do not have enough time to prepare for
their foods.
Rising rate of obesity
Rising cost of petroleum
2008
Actual
2007
2006
Remarks
1.03
0.54
84%
154%
0.63
0.34
47%
167%
0.79
0.39
25%
206%
Weak
Weak
Highly leveraged
Can liquidate debt upon liquidation
8.52
10.79
11.7%
4.4%
7.97
9.51
9.3%
4.2%
N/A
N/A
N/A
N/A
Increasing trend
Increasing trend
Increasing trend
Steady growth
PROBLEM STATEMENT
Maintaining to be the leading and largest food company in the United States and
becoming the largest food company globally both in terms of revenue and profit.
1. Support information why this is a problem
a. There is no evident negative problem that affects Kraft that will reduced
their profit and position in the market. Thus, their problem is to maintain
their position and grow more
2. Time Context 2009
3. View Point Irene Rosenfeld, CEO
II.
Weaknesses
1. Weak liquidity ratios of
1.03x and 0.63x current ratio
for 2008 and 2007
respectively also 0.54x and
0.34x acid-test ratio for
2008 and 2009 respectively.
2. Negative revenue growth
rate for US Cheese (9%),
Canada & North American
Foodservice (10%) and
European Union (17%)
3. Divisions are determined
by geographical area and not
by product.
Opportunities
1. Enhance waters containing
vitamins or supplements are
gaining popularity.
2. Expected steady growth of
packaged and processed food
in US market which will give
large profit in retail sales.
3. Increase in worldwide
demand because people do
not have enough time to
prepare for their foods.
4. Expiration and
renegotiation of commodity
prices in mid-2008 will expect
to lower the production cost
of baked products relying on
wheat, eggs and natural gas.
Threats
1. More people are now more
inclined to dine-out
2. Rising rate of obesity
3. Public health concern of
chemical and bacterial
contamination.
4. Rising cost of petroleum
5. U.S. dollar gains
6. Nestle largest food
products in the world with
sales coming primarily in
international sales. Also
produces health, beauty and
pet care products.
WO
1. Look for new supplier
contract that will give
lower prices to reduce
the current or
operational liabilities
(W1, O4)
WT
1. Invest more on
foreign financial
instrument. This will
compensate the slow
revenue growth for
international operations.
(W2, T5)
contamination.
4. Research and develop new
product that can be prepared
without the use of petroleum
like grilled. (S11, S13, T4)
5. Research raw material
substitute that can be
imported from other
countries to lower the cost of
product brought by US dollar
gains (S11, S13, T5)
6. Invest in foreign financial
instrument to increase
international operations
through foreign currency
gains (S1, S2, T6)
7. Market Penetration to
expand operations and
maintain position in US (S4,
S5, T7)
2. IFE/EFE Matrix
EFE
Strong (3.0
4.0)
I
IV
IFE
Average (2.0
2.9)
II
V
VII
VIII
Conclusion: Aggressive
a. Backward, Forward or Horizontal Integration
b. Market Penetration
c. Market Development
d. Product Development
e. Diversification
4. GRAND Strategy Matrix
RMG
Q2
Q1
WCP
SCP
Q3
Q4
SMG
KFC fall under Quadrant 1 for having rapid growth industry and strong
competitive position. Suggested Strategies are:
1. Market Development
2. Market Penetration
3. Product Development
4. Forward Integration
5. Backward Integration
6. Horizontal Integration
7. Related Diversification
5. SUMMARY OF STRATEGY
STRATEGY OPTIONS
Market Development
Market Penetration
Product Development
Integration Strategies
Diversification
IFE/EFE
1
2
SPACE
1
2
----------------END---------------
GSM
3
2
1
TOTAL
5
6
1
6
ACA 3
ACA 1
ACA 2