Kraft Is Back On Track Essay

1648 Words 7 Pages
Introduction 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 …show more content…
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) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. (Investopedia, N.d)
Kraft has incurred a high debt/equity ratio of 205.63, this high ratio a measure of a company's financial leverage. This ratio concurred with the aggressive purchase British confectionery

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