Kraft Foods Case Study

Amazing Essays
Register to read the introduction… Over the last 100 years Kraft Foods has developed a positive reputation for quality food, making them one of the world’s most recognized brands (Kraft Foods, 2014). They are a large multinational organization with branches in 72 countries and products sold in over 150 countries giving them a competitive edge and strong market presence in the food industry thus enhancing their financial portfolio (Kraft Foods). The large revenues generated allows Kraft Foods to build and maintain their extensive physical assets, valued at $23B, giving them a competitive advantage (Kraft Foods Financial Report, …show more content…
Vuru Financial calculates the growth rate for the market at 20.20%. Despite financial recession and penny pinching consumers net revenues over the last year increased by $9M, a 0.3% increase (Kraft Foods Financial Report, 2013). Kraft Foods was able to increase their total assets by $1.1M while simultaneously decreasing their long term debt (Kraft Foods Financial Report). The consistent gain in profits over the last several years has put Kraft Foods in a strong financial position to invest in new equipment, research, development and advertising, all of which will improve their long term financial growth (Vuru Finance, 2014). The patents and trademarks owned by Kraft Foods also help contribute to their continued financial success. For example, Kraft Foods owns a trademark with Ehancer worth $261M with a carrying value of 12% (Kraft Foods Financial Report). Additionally Kraft Foods continues to build the portfolios of their shareholders through increased stock buybacks and an increased discount rate of 15%, which is above the national average of 8-10% (Vuru Financials). With the large financials available to Kraft Foods they have a vast amount of machineries, land and employees allowing them to generate and distribute products their consumers demand and have an advantage over their …show more content…
Determining weaknesses can generate opportunities for future success. Although Kraft Foods is number two in the food industry there are numerous factors to be improved upon. A major weakness of Kraft Foods is their low market share, only 9% in a $40B global food industry (Vuru Financials, 2014). This demonstrates weak geographic positioning, especially in markets outside North America (Vuru Financials). Nestle, Kraft Foods number one rival, enhanced their net profits by nearly 11.5%, while Kraft Foods only increased by 8.95%, this 2.56% difference in net profits indicates Nestles global efficiency (Kraft Foods, 2013 and Nestle,

Related Documents

  • Decent Essays

    Pentair Case Study

    • 799 Words
    • 4 Pages

    On the other hand, the company’s cash generation is also adamant, as its free cash flows are standing around 100% of adjusted net income. Therefore, this dividend aristocrat can sustain its long dividend growth history. Pentair Corp (NYSE: PNR) has a long history of dividend growth, raised its dividends over the last 40 years. At present, the company offers a quarterly dividend of 0.33 per share, yielding around 2.21%. Pentair is a diversified industrial manufacturing company.…

    • 799 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    The H.J. Heinz Company was founded in 1869 by Henry John Heinz with its headquarters in Pittsburgh, Pennsylvania. It is one of the world’s largest food producers which aim to produce affordable, convenient and healthy foods. Heinz is well known by their ketchup where 650 million bottles of Heinz ketchup is sold every year around the globe. Besides, Heinz is also expanding their market by producing a wider range of food which includes sauces; meals; snacks and infant/ nutrition (Heinz.com, 2016).…

    • 1762 Words
    • 8 Pages
    Decent Essays
  • Decent Essays

    This resource is also very durable, as Apple has been able to maintain its brand reputation for years. Apple’s strong brand also passes the appropriability test. Under Sculley, the brand had loyal customers devoted to the brand, and later Steve Jobs revamped the brand, which made it even stronger. Many were worried that Apple’s achievements would not be sustainable following Jobs’ death, but the company has been doing just as well under Tim Cook. In Cook’s first three years as CEO, the stock price of Apple doubled, revenues were up, and its market capitalization surpassed $700 billion, making it the most valuable company in the world.…

    • 1336 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    Starbucks long-term return on assets (ROA) deteriorated from 2012 to 2013 from 17.76% to 0.08%, but improved remarkably in 2013 to 2014 from 0.08% to 18.57%. Over the last ten years, Starbucks Corporation had the highest return on assets of 18.57 % in 2014 and the lowest return on assets of 0.08% in 2013 with a median of 10.86%. Starbucks cost of financing (debt) was around 5% suggesting that the company has favorable financing by almost 14% in 2014. Starbucks return of assets was greater than 5% (cost of debt) with only one unfavorable year for financing in 2013 probably due to the impending lawsuit. By the end of 2013, Starbucks had total assets of $11,517 million and total liabilities of $7037 million produced a debt-to-asset ratio of…

    • 839 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    With any great company, comes the competition that follows. Main competitors include Sam’s Club and BJ’s but Costco shows the fastest growth. These warehouses are not only available in the Unites States, but in eight countries total. It is also a ‘green’ company, taking steps to reduce its carbon footprint. The numbers tell the truth, and the truth is Costco is a company that continues to grow year to year.…

    • 1142 Words
    • 5 Pages
    Decent Essays
  • Decent Essays

    Starbucks Case Study Starbucks is a massive company that prides itself on delivering the consumer high quality coffee ethically. In recent years, Starbucks has experienced a lucrative amount of growth. In the third quarter of 2016, Starbucks’ store sales increased 4%, net revenues grew 7%, and profitability jumped 9% (Doraisamy 2016). I attribute these astronomical numbers to Starbucks’ initiative to expand its operations nationally as well as internationally while maintaining its signature quality wherever it goes (Trefis 2016). Starbucks’ EPS (earnings per share) has increased 24% to $0.51 per share, and this is due to the company’s high profitability trickling down to their stock holders.…

    • 1011 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    The workforce is efficient and motivated which results in better results and good business performance. The company believes in customer satisfaction as well which is why company has ranked in the top position among its industry in the American Customer Satisfaction Index each year for more than a decade. Costco opened 13 new stores during the quarter totaling to 686 warehouses. Out of which…

    • 951 Words
    • 4 Pages
    Decent Essays
  • Decent Essays

    Even during the economic financial crisis in the United States, Starbucks revenue continued on an upward trend. The company’s gross profit showed a continuous rise between the years of 2010 to 2014. Starbuck’s gross profit was under one million each year from 2010-2012. For each year proceeding 2012, the company’s gross profit increased to slightly over one million. Therefore, Starbucks positive increase in profits over the last five years is a great indication that the company is stable and worth investing in.…

    • 731 Words
    • 3 Pages
    Decent Essays
  • Decent Essays

    Despite the continued uncertainty in the current economic climate, Taylor Made Computer Solutions Ltd has performed profitably over the financial years 2012 and 2013. The company’s pre-tax profit amounted to £419,673 in 2013 (a 4% net margin) which is an increase of 60% compared to 2012. Profits after tax increased by £126,367 to £337,555 in 2013. Key areas such as sales proved highly adequate with the business recording an annual turnover of £9.8 million sales, representing a 6% increase in sales. These figures reflect the continued stability of the company and due to its focus on annuity income based contracts as well as longer-term contracts, this has resulted in positive trading and financial results for the most recent year (2013) in which…

    • 1616 Words
    • 6 Pages
    Decent Essays
  • Decent Essays

    MWG Case Study

    • 2288 Words
    • 10 Pages

    The company's size can more than double from here thanks to the new grocery chain Bachhoa XANH and international expansion. Our DCF assumes revenue will grow 12% until 2030 and operating margin will stay constant at 5.4%. This results in an intrinc value price of 255,000 VND per share, an upside of 55% from this level. It should be noted that the pilot period of Bachhoa XANH has exceeded management's expectations and they will expand the concept as fast as they did with the Mobile World concept. Current valuation takes into account all the cash flow of the current 1,000 Mobile and Dienmay Xanh stores, and the company will double the stores with the Bachhoa XANH concept.…

    • 2288 Words
    • 10 Pages
    Decent Essays