Business Principals

MGM110 Phase 2 Individual Project

MGM110 Phase 2 Individual Project

Steven Murphy

Colorado Technical University Online

Principals of Business

Dr. J. Heinzman

January, 2006

Kraft Foods

For more than 100 years, Kraft Foods has been a leader of branded foods and beverages. With its meager beginnings in Central Illinois, Kraft has grown into a multinational corporation that is the largest food and beverage corporation headquartered in the United States and the second largest in the world. Kraft Foods markets their products today in 155 countries making them a true global organization. (Corporate Fact Sheet, n.d)

Kraft Foods is a true global business unit. The organization is structured in three dimensions to provide services required in every corner of the globe that they service. The structure creates a cycle chain that allows each section of the organization to feed off the other forming a consistent and constant flow of information that allows this organization to maintain their competitive edge. These groups are identified as Global Marketing & Category Development, Commercial Units and Global Functions. (Company Structure, n.d)

Kraft Foods is divided into seven business segments: (Corporate Fact Sheet, n.d)

1. US Beverages

2. US Cheese, Canada and North American Food Service

3. US Convenient Meals

4. US Grocery

5. US Snacks and Cereals

6. Europe, Middle East and Africa

7. Latin America and Asia Pacific

These business segments produce a wide variety of food and beverage products that are used worldwide. Products such as Philadelphia Cream Cheese, Oreo cookies, Maxwell House Coffee, Tang and Crystal Light beverages, salad dressings and spreads not to mention cheeses are only a sampling of the food and beverage products that Kraft Foods manufactures globally. As one can see, Kraft Foods has came a long way since 1903 when J.L Kraft, with $65 in his pocket, a rented wagon and a horse started buying wholesale cheeses at market and reselling to local grocery vendors. (History, n.d)

The final dimensions of Kraft Foods are the Global Functions Units. These units are divided into 8 categories that are responsible for identifying and sharing their best practices world wide as well as utilizing their size on a global scale to their advantage. These Global Function Units are identified as: (Company Structure, n.d)

1. Global Supply Chain

2. Global Technology & Quality

3. Global Finance

4. Global Human Resources

5. Global Law

6. Global Information Systems

7. Global Corporate Affairs

8. Global Strategy and Business Development

The Kraft Executive Team is the leaders of each of the eight functional areas, the two commercial units and Global Marketing & Category Development, who report directly to the Chief Executive Officer. Kraft Foods utilizes one Chief Executive Officer to head all of the divisions of the corporation. This program was instituted in 2003 as a cost savings measure allowing all entities of the organizational structure to link together better to form a cohesive bond in industry leadership. (Annual Report, n.d)

Kraft Foods proudly and boldly posts their strategies of business. They state that their strategies are their roadmap to success. By formulating these strategies and following them they can build a framework that structures the organization that benefits the stakeholders and customers by realizing their goals and meeting these goals. The following is a list of their strategies for review. (Company Strategies, n.d)

* Build superior consumer brand value by delivering a better product to the consumer at a better price than their competitors

* Build shopper demand through superior customer collaboration with trade partners and pass the savings to the consumer

* Transform the portfolio of consumer products to meet the needs of the changing demographics and personal taste needs

* Expand global scale to achieve greater market share, particularly in economies of developing countries

* Drive out costs and assets by creating a leaner structure and utilize the savings to strengthen brand building

* Strengthen employee and organizational excellence to support their employees on a global basis and to continue a joyous working relationship

* Act responsibly by continuing to practice integrity and to support the communities they operate in and to engage on the social issues that are relevant to the company

Kraft Foods largest market area is that of North America. This company holds a number one market share in 22 of the 25 leading product categories in the U.S. as well as 11 categories on a global basis. Utilizing the expertise of 100,000 employees employed in 199 plants worldwide, Kraft foods has enjoyed net sales of $31 billion in 2003 and an increase in net sales to $32 billion in 2004. This global organization continues to be a business leader that has practiced global commerce for many years and has goals to continue this practice for many years to come. (Annual Report, n.d)

Kraft Foods Reference

Kraft Foods, (n.d) Corporate Fact Sheet. Retrieved Jan. 15, 2006, from Kraft Foods - Profile Web site:

http://www.kraft.com/profile/factsheet.html

Kraft Foods, (n.d.) Company Structure. Retrieved Jan. 15, 2006, from Kraft Foods - Profile Web site:

http://www.kraft.com/profile/company_structure.html