What is your assessment of the long-term attractiveness of the industries represented in Kraft Foods’ business portfolio?
According to BusinessDictionary, a business portfolio is, very simply, the products and services a business offers to the public. Industry attractiveness refers to the potential profits that may be generated by investing in a given industry. In conjunction with this, when picking new markets or expanding existing markets, businesses consider factors such as:
- size of the market (who is more likely to buy, how many people would buy)
- depth of the market (who can it influence or reach, demographics, etc)
- rate of growth of the market (will it continue to have people purchasing, will it grow in numbers?)
- cost, reach, and competition (is it easy to sell, cheap enough to sell for risks, who is out there offering the same for a better price or quality?)
Upon visiting the company profile at Kraft Foods.com we learn that the company merged in 2015 with the Heinz product company. Both are household brand names that elicit the imagery of all-American lifestyle foods, such as grilled cheese sandwiches, hot dogs, and ketchup. Moreover, these images elicit even more ideal scenes of the American lifestyle such as baseball games, BBQ's, dinners at home, and other daily freedoms that our country is famous for.
This being said, the attractiveness of the food market is quite favorable long-range. The food products sold by the two merged companies compose an all-American establishment where the two brands are go-to brands in the market. The products are popular, reach a wide market share, accommodate different tastes, and are not complex or sophisticated. When basic, simple products like ketchup, mustard, butter, and cheese are sold by the same trusted company, there is ease of reach to the consumer.
The company is not merely made of its products alone. It also wants to influence the buyer's lifestyle in a positive way by offering a diversity of ideas on how to use those products. It includes recipe blogs, nutrition values, dinner planners, and even a budget calculator. This is the best way to involve and influence a market of buyers that want to feel as part of something bigger. This is how business loyalty is built.
The availability is also long-range which means that if any ketchup company out there were to go bankrupt, and then a cheese processing plant were to also go bankrupt, the public would have Kraft Heinz as an instant solution for their food needs. As super brands, Heinz and Kraft have enjoyed a prominent place in marketing; they generate large profits precisely because their products are so attractive to the market.
Therefore, Kraft Heinz is a company representing the attractiveness required for a business to generate high profits in a competitive market.