Kraft Is Back On Track Essay

1869 words - 7 pages

It is vital for organizations to assess the strengths and weaknesses of its functions and activities. As a major market share holder within their industry, Kraft in order to develop and grow is recommended to utilize some basic analytical models used within the business world. These models include the Porter Value Chain (PVC) framework and the Resource Based View (RBV) of unique competencies within their organization. The RBV includes some of PVC identifying primary and support activities. Using these two models will assist Kraft in developing their Strength Weakness Opportunity Threat (SWOT) analysis. In this session long project I will briefly discuss Kraft’s internal operations from a strategic point of view using the RBV and PVC models.
Tangible Resources
Kraft reports their physical resources, property and plant, as $4,204,000,000 as stated on their 29 December 2012 annual financial statements. Kraft’s has established a network of manufacturing and processing facilities located throughout North America. Kraft operates 37 manufacturing and processing facilities in the United States and three in Canada. All 40 of these facilities are owned by Kraft. Kraft distributes their products through a network of 42 owned and leased distribution centers. Kraft distributes via 39 distribution centers in the U.S. and three in Canada with four owned and 38 of these distribution centers leased. Third-party logistics providers perform storage and distribution services for us to support our distribution network. (Kraft, 2012) These facilities and distribution centers support Krafts’ primary activities of logistics, service, marketing, and operations. In addition to Kraft’s manufacturing and processing facilities and distribution centers, Kraft maintains three key technology centers. Each equipped technology center includes pilot plants and state-of-the-art instruments. It is expended approximately $178 million on research and development activities in 2012, $198 million in 2011 and $185 million in 2010. (Kraft, 2012)
An organizations financial health can assist in short and long term planning, debt load, and opportunities for mergers and acquisitions, and expansion. Krafts’ 2012 annual financial statements include a plethora of financial data. In 2012, Kraft reported financial data includes; short term debt of $5,000,000, long term debt $9,966,000,000, cash and cash equivalents $1,255,000,000, and cash flow from operations $3,035,000,000, total revenue $18,399,000,000 cost of revenue 12,499,000,000, and gross profit $5,840,000,000. Other pertinent financial data includes; a profit margin of 10.31% which that for each dollar of sales Kraft earns 10.31% in net income, an operating margin of 19.75% which indicates what portion of Kraft’s revenue is remaining after paying variable costs, a current ratio of 1.67% which is mainly used to give an idea of the company's ability to pay back its short-term liabilities (debt and payables)...

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