What is Kraft Foods Inc.’s corporate strategy? How has its corporate strategy evolved since its independence in 2007?

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Karen P.L. Hardison | College Teacher | eNotes Employee

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Kraft's current corporate strategy focuses on growth as attested to by their recent merger with Heinz to form the Kraft Heinz Company. Another part of their corporate strategy is to restructure the corporate organization, which includes replacing some executives and creating new executive positions. Having taken their lead from Nabisco, another implementation in corporate strategy is to shift procedures at the business/store level to enhance store display placement, which is directly related to achieving market share. Since March of 2007, when Kraft was released by Altria to trade on the stock exchange and do business as an independent company, corporate strategy has evolved to revitalize "legacy" brands to meet changing customer demands and to expand with growth on the global level, as shown by the acquisitions in the European chocolate market.

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teachsuccess | High School Teacher | (Level 1) Educator Emeritus

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Over the years, Kraft's corporate strategists have sought to focus on global and national trends as the linchpins to market dominance.

The current Kraft strategy is no exception. With the public's new and prevailing interest in healthier alternatives, Kraft is presently engineering a shake-up of current staff. With the departure of the chief financial officer and two senior executives, the company will add a new position, that of Vice President of Growth Initiatives. The idea is to explore the creation of products which will both keep pace with new consumer trends and recognize the realities of present-day economic challenges.

Kraft's corporate vision has always been to recognize market trends and to adapt to the needs of consumer demand. In 2007, the company focused on the four Diamonds of success: consumer experience, health and wellness, convenience and simplification. With the 50+ age population growing at least three times beyond the rate of the base population, Kraft capitalized on market share by adding more fresh fruits and vegetables to its products, broadening its deli and snack offerings, and creating new and improved versions of favorite meals. The subsequent merger with Nabisco in 2000 allowed Kraft to utilize Nabisco's direct sales inventory model to increase economies of scale (the cost advantages of doing business). With a new emphasis on customer led innovation, the creation of Nabisco's 100 calorie packs fueled greater customer satisfaction and brand loyalty.

In 2009, Kraft saw continued business growth through the flexibility of its Organizing For Growth Initiative, a program which largely decentralized the company's existing power structure. Individual business units within the company were given direct influence to oversee the development of new products and to streamline the flow of shared information; the result is that category executive teams were able to suggest and make necessary changes which kept pace with industry developments and consumer trends.

With the acquisition of Cadbury in 2010, Kraft has both solidified its national market share and stake in developing markets (outside North America) with highly innovative combinations of new products and iconic, heritage brands.

In 2012, Kraft split up its North American grocery business and its global snack business, Mondelez International. In combination with this business strategy, Kraft harnessed the latent energies (and frustrations) of its 25,000 employees in a corporate culture shift which saw the company veer towards greater innovation fueled by employee participation.

Between 2014 and 2015, Kraft's corporate strategy has largely concentrated on the importance of the three C's: consumers, customers, and communication.Two groups of consumers are driving market growth in the food industry: the Hispanic population and the millennial generation. Kraft aims to capitalize on its market share in the food industry through consistent innovation which seeks to satisfy the demands of these two important, emergent groups in American society. With the pressures of the new economy, more families are resorting to planned, shopping trips for essentials, rather than splurging on spur-of-the-moment shopping excursions. Kraft aims to maintain its market dominance by creating products which deliver value and takes into consideration the requirements of its price conscious customer base. With new innovations in customer-based innovation (as described above), Kraft has harnessed new data to drive the development of effective products. For example, Kraft has published food and recipe content for decades. With customer contribution (through effective channels of communication) and participation, the result is Kraft's emergence as a leading provider of meal solutions.

To summarize, Kraft's corporate strategy has always been to focus on adapting itself to consumer demands and national/global trends. Today, that corporate strategy has evolved to include incorporating new types of communication technology (Internet, social media, mobile devices) to stay abreast of those trends and to develop products indicative of those trends. Please refer to the links above for more information about Kraft's corporate strategy.

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