Kraft Food Inc. Kraft Foods Research Paper

In addition, it makes little sense to split out Canada as a unique reporting segment from the United States. The highly integrated economies, free flow of goods, near parity of currency and nearly identical product lines would indicate that there is little operational or strategic benefit to cutting Canada out from the United States. This may allow Kraft to rationalize production more, improving efficiency. The possibility of rationalizing production for Mexico should also be explored as that nation's economy becomes more integrated with that of the United States.

Conclusions

Kraft attempts to build share in its mature markets through a differentiation strategy. There is evidence, however, in the company's inefficiency and lower than industry averages margins, that the consuming public does not ascribe to Kraft the degree of differentiation that the company seeks. In order to improve efficiency, two steps can be taken.The first is to lower prices, spurring more demand. This in turn will allow for greater efficiency in operations, the result being that margins as at worst maintained and sales increased.

In addition, the organizational structure is inefficient. Focusing strictly on product in Developing Markets, rather than by country, will encourage greater production efficiency, particularly in Asia. Reorganizing North America would be more reflective of Canada's similarities to the U.S. And again would provide efficiency-increasing opportunities in production rationalizing.

Works Cited:

Kraft Foods 2009 Form 10-K. Retrieved April 21, 2010 from http://www.sec.gov/Archives/edgar/data/1103982/000119312510040106/d10k.htm

No author. (2010). MPs demand close monitoring of Kraft's undertakings. Parliament.uk. Retrieved April 21, 2010 from http://news.parliament.uk/2010/04/mps-demand-close-monitoring-of-krafts-undertakings/

MSN Moneycentral: Kraft Foods. (2010). Retrieved April 21, 2010 from http://moneycentral.msn.com/investor/invsub/results/compare.asp?Page=TenYearSummary&Symbol=U.S.%3aKFT.....