Case Study Description of Kraft Foods Canada: Targeting the Millennials
In 2014, Kraft Foods Canada was working on an action plan for Kraft Singles, the company's brand of processed cheese slices. Although the product had been targeted at Canadian families for decades, Kraft Singles needed to be repositioned toward Canadian millennial moms (those born between 1980 and 2000). The company faced three dilemmas. How should Kraft Canada make the brand messaging of Kraft Singles compelling to Canadian millennial moms? What product innovations should coincide with the new messaging? How should Kraft Canada ensure that it would not alienate its traditional customer group?
Swot Analysis of "Kraft Foods Canada: Targeting the Millennials" written by Allison Johnson, Ramasastry Chandrasekhar includes – strengths weakness that are internal strategic factors of the organization, and opportunities and threats that Kraft Singles facing as an external strategic factors. Some of the topics covered in Kraft Foods Canada: Targeting the Millennials case study are - Strategic Management Strategies, Innovation and Sales & Marketing.
Some of the macro environment factors that can be used to understand the Kraft Foods Canada: Targeting the Millennials casestudy better are - – supply chains are disrupted by pandemic , there is backlash against globalization, central banks are concerned over increasing inflation, increasing household debt because of falling income levels, cloud computing is disrupting traditional business models, there is increasing trade war between United States & China, increasing commodity prices,
customer relationship management is fast transforming because of increasing concerns over data privacy, increasing government debt because of Covid-19 spendings, etc
Introduction to SWOT Analysis of Kraft Foods Canada: Targeting the Millennials
SWOT stands for an organization’s Strengths, Weaknesses, Opportunities and Threats . At Oak Spring University , we believe that protagonist in Kraft Foods Canada: Targeting the Millennials case study can use SWOT analysis as a strategic management tool to assess the current internal strengths and weaknesses of the Kraft Singles, and to figure out the opportunities and threats in the macro environment – technological, environmental, political, economic, social, demographic, etc in which Kraft Singles operates in.
According to Harvard Business Review, 75% of the managers use SWOT analysis for various purposes such as – evaluating current scenario, strategic planning, new venture feasibility, personal growth goals, new market entry, Go To market strategies, portfolio management and strategic trade-off assessment, organizational restructuring, etc.
SWOT Objectives / Importance of SWOT Analysis and SWOT Matrix
SWOT analysis of Kraft Foods Canada: Targeting the Millennials can be done for the following purposes –
1. Strategic planning using facts provided in Kraft Foods Canada: Targeting the Millennials case study
2. Improving business portfolio management of Kraft Singles
3. Assessing feasibility of the new initiative in Sales & Marketing field.
4. Making a Sales & Marketing topic specific business decision
5. Set goals for the organization
6. Organizational restructuring of Kraft Singles
Strengths Kraft Foods Canada: Targeting the Millennials | Internal Strategic Factors
What are Strengths in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The strengths of Kraft Singles in Kraft Foods Canada: Targeting the Millennials Harvard Business Review case study are -
Superior customer experience
– The customer experience strategy of Kraft Singles in the segment is based on four key concepts – personalization, simplification of complex needs, prompt response, and continuous engagement.
High brand equity
– Kraft Singles has strong brand awareness and brand recognition among both - the exiting customers and potential new customers. Strong brand equity has enabled Kraft Singles to keep acquiring new customers and building profitable relationship with both the new and loyal customers.
Analytics focus
– Kraft Singles is putting a lot of focus on utilizing the power of analytics in business decision making. This has put it among the leading players in the industry. The technology infrastructure suggested by Allison Johnson, Ramasastry Chandrasekhar can also help it to harness the power of analytics for – marketing optimization, demand forecasting, customer relationship management, inventory management, information sharing across the value chain etc.
Training and development
– Kraft Singles has one of the best training and development program in the industry. The effectiveness of the training programs can be measured in Kraft Foods Canada: Targeting the Millennials Harvard Business Review case study by analyzing – employees retention, in-house promotion, loyalty, new venture initiation, lack of conflict, and high level of both employees and customer engagement.
Diverse revenue streams
– Kraft Singles is present in almost all the verticals within the industry. This has provided firm in Kraft Foods Canada: Targeting the Millennials case study a diverse revenue stream that has helped it to survive disruptions such as global pandemic in Covid-19, financial disruption of 2008, and supply chain disruption of 2021.
Low bargaining power of suppliers
– Suppliers of Kraft Singles in the sector have low bargaining power. Kraft Foods Canada: Targeting the Millennials has further diversified its suppliers portfolio by building a robust supply chain across various countries. This helps Kraft Singles to manage not only supply disruptions but also source products at highly competitive prices.
Learning organization
- Kraft Singles is a learning organization. It has inculcated three key characters of learning organization in its processes and operations – exploration, creativity, and expansiveness. The work place at Kraft Singles is open place that encourages instructiveness, ideation, open minded discussions, and creativity. Employees and leaders in Kraft Foods Canada: Targeting the Millennials Harvard Business Review case study emphasize – knowledge, initiative, and innovation.
Successful track record of launching new products
– Kraft Singles has launched numerous new products in last few years, keeping in mind evolving customer preferences and competitive pressures. Kraft Singles has effective processes in place that helps in exploring new product needs, doing quick pilot testing, and then launching the products quickly using its extensive distribution network.
Organizational Resilience of Kraft Singles
– The covid-19 pandemic has put organizational resilience at the centre of everthing that Kraft Singles does. Organizational resilience comprises - Financial Resilience, Operational Resilience, Technological Resilience, Organizational Resilience, Business Model Resilience, and Reputation Resilience.
Cross disciplinary teams
– Horizontal connected teams at the Kraft Singles are driving operational speed, building greater agility, and keeping the organization nimble to compete with new competitors. It helps are organization to ideate new ideas, and execute them swiftly in the marketplace.
Ability to lead change in Sales & Marketing field
– Kraft Singles is one of the leading players in its industry. Over the years it has not only transformed the business landscape in its segment but also across the whole industry. The ability to lead change has enabled Kraft Singles in – penetrating new markets, reaching out to new customers, and providing different value propositions to different customers in the international markets.
Effective Research and Development (R&D)
– Kraft Singles has innovation driven culture where significant part of the revenues are spent on the research and development activities. This has resulted in, as mentioned in case study Kraft Foods Canada: Targeting the Millennials - staying ahead in the industry in terms of – new product launches, superior customer experience, highly competitive pricing strategies, and great returns to the shareholders.
Weaknesses Kraft Foods Canada: Targeting the Millennials | Internal Strategic Factors
What are Weaknesses in SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The weaknesses of Kraft Foods Canada: Targeting the Millennials are -
Interest costs
– Compare to the competition, Kraft Singles has borrowed money from the capital market at higher rates. It needs to restructure the interest payment and costs so that it can compete better and improve profitability.
No frontier risks strategy
– After analyzing the HBR case study Kraft Foods Canada: Targeting the Millennials, it seems that company is thinking about the frontier risks that can impact Sales & Marketing strategy. But it has very little resources allocation to manage the risks emerging from events such as natural disasters, climate change, melting of permafrost, tacking the rise of artificial intelligence, opportunities and threats emerging from commercialization of space etc.
Aligning sales with marketing
– It come across in the case study Kraft Foods Canada: Targeting the Millennials that the firm needs to have more collaboration between its sales team and marketing team. Sales professionals in the industry have deep experience in developing customer relationships. Marketing department in the case Kraft Foods Canada: Targeting the Millennials can leverage the sales team experience to cultivate customer relationships as Kraft Singles is planning to shift buying processes online.
Increasing silos among functional specialists
– The organizational structure of Kraft Singles is dominated by functional specialists. It is not different from other players in the Sales & Marketing segment. Kraft Singles needs to de-silo the office environment to harness the true potential of its workforce. Secondly the de-silo will also help Kraft Singles to focus more on services rather than just following the product oriented approach.
Need for greater diversity
– Kraft Singles has taken concrete steps on diversity, equity, and inclusion. But the efforts so far has resulted in limited success. It needs to expand the recruitment and selection process to hire more people from the minorities and underprivileged background.
Slow to strategic competitive environment developments
– As Kraft Foods Canada: Targeting the Millennials HBR case study mentions - Kraft Singles takes time to assess the upcoming competitions. This has led to missing out on atleast 2-3 big opportunities in the industry in last five years.
Capital Spending Reduction
– Even during the low interest decade, Kraft Singles has not been able to do capital spending to the tune of the competition. This has resulted into fewer innovations and company facing stiff competition from both existing competitors and new entrants who are disrupting the industry using digital technology.
High dependence on existing supply chain
– The disruption in the global supply chains because of the Covid-19 pandemic and blockage of the Suez Canal illustrated the fragile nature of Kraft Singles supply chain. Even after few cautionary changes mentioned in the HBR case study - Kraft Foods Canada: Targeting the Millennials, it is still heavily dependent upon the existing supply chain. The existing supply chain though brings in cost efficiencies but it has left Kraft Singles vulnerable to further global disruptions in South East Asia.
High bargaining power of channel partners
– Because of the regulatory requirements, Allison Johnson, Ramasastry Chandrasekhar suggests that, Kraft Singles is facing high bargaining power of the channel partners. So far it has not able to streamline the operations to reduce the bargaining power of the value chain partners in the industry.
Skills based hiring
– The stress on hiring functional specialists at Kraft Singles has created an environment where the organization is dominated by functional specialists rather than management generalist. This has resulted into product oriented approach rather than marketing oriented approach or consumers oriented approach.
Slow to harness new channels of communication
– Even though competitors are using new communication channels such as Instagram, Tiktok, and Snap, Kraft Singles is slow explore the new channels of communication. These new channels of communication mentioned in marketing section of case study Kraft Foods Canada: Targeting the Millennials can help to provide better information regarding products and services. It can also build an online community to further reach out to potential customers.
Opportunities Kraft Foods Canada: Targeting the Millennials | External Strategic Factors
What are Opportunities in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The opportunities highlighted in the Harvard Business Review case study Kraft Foods Canada: Targeting the Millennials are -
Buying journey improvements
– Kraft Singles can improve the customer journey of consumers in the industry by using analytics and artificial intelligence. Kraft Foods Canada: Targeting the Millennials suggest that firm can provide automated chats to help consumers solve their own problems, provide online suggestions to get maximum out of the products and services, and help consumers to build a community where they can interact with each other to develop new features and uses.
Changes in consumer behavior post Covid-19
– Consumer behavior has changed in the Sales & Marketing industry because of Covid-19 restrictions. Some of this behavior will stay once things get back to normal. Kraft Singles can take advantage of these changes in consumer behavior to build a far more efficient business model. For example consumer regular ordering of products can reduce both last mile delivery costs and market penetration costs. Kraft Singles can further use this consumer data to build better customer loyalty, provide better products and service collection, and improve the value proposition in inflationary times.
Low interest rates
– Even though inflation is raising its head in most developed economies, Kraft Singles can still utilize the low interest rates to borrow money for capital investment. Secondly it can also use the increase of government spending in infrastructure projects to get new business.
Building a culture of innovation
– managers at Kraft Singles can make experimentation a productive activity and build a culture of innovation using approaches such as – mining transaction data, A/B testing of websites and selling platforms, engaging potential customers over various needs, and building on small ideas in the Sales & Marketing segment.
Reconfiguring business model
– The expansion of digital payment system, the bringing down of international transactions costs using Bitcoin and other blockchain based currencies, etc can help Kraft Singles to reconfigure its entire business model. For example it can used blockchain based technologies to reduce piracy of its products in the big markets such as China. Secondly it can use the popularity of e-commerce in various developing markets to build a Direct to Customer business model rather than the current Channel Heavy distribution network.
Loyalty marketing
– Kraft Singles has focused on building a highly responsive customer relationship management platform. This platform is built on in-house data and driven by analytics and artificial intelligence. The customer analytics can help the organization to fine tune its loyalty marketing efforts, increase the wallet share of the organization, reduce wastage on mainstream advertising spending, build better pricing strategies using personalization, etc.
Lowering marketing communication costs
– 5G expansion will open new opportunities for Kraft Singles in the field of marketing communication. It will bring down the cost of doing business, provide technology platform to build new products in the Sales & Marketing segment, and it will provide faster access to the consumers.
Remote work and new talent hiring opportunities
– The widespread usage of remote working technologies during Covid-19 has opened opportunities for Kraft Singles to expand its talent hiring zone. According to McKinsey Global Institute, 20% of the high end workforce in fields such as finance, information technology, can continously work from remote local post Covid-19. This presents a really great opportunity for Kraft Singles to hire the very best people irrespective of their geographical location.
Leveraging digital technologies
– Kraft Singles can leverage digital technologies such as artificial intelligence and machine learning to automate the production process, customer analytics to get better insights into consumer behavior, realtime digital dashboards to get better sales tracking, logistics and transportation, product tracking, etc.
Use of Bitcoin and other crypto currencies for transactions
– The popularity of Bitcoin and other crypto currencies as asset class and medium of transaction has opened new opportunities for Kraft Singles in the consumer business. Now Kraft Singles can target international markets with far fewer capital restrictions requirements than the existing system.
Developing new processes and practices
– Kraft Singles can develop new processes and procedures in Sales & Marketing industry using technology such as automation using artificial intelligence, real time transportation and products tracking, 3D modeling for concept development and new products pilot testing etc.
Redefining models of collaboration and team work
– As explained in the weaknesses section, Kraft Singles is facing challenges because of the dominance of functional experts in the organization. Kraft Foods Canada: Targeting the Millennials case study suggests that firm can utilize new technology to build more coordinated teams and streamline operations and communications using tools such as CAD, Zoom, etc.
Learning at scale
– Online learning technologies has now opened space for Kraft Singles to conduct training and development for its employees across the world. This will result in not only reducing the cost of training but also help employees in different part of the world to integrate with the headquarter work culture, ethos, and standards.
Threats Kraft Foods Canada: Targeting the Millennials External Strategic Factors
What are Threats in the SWOT Analysis / TOWS Matrix / Weighted SWOT Analysis
The threats mentioned in the HBR case study Kraft Foods Canada: Targeting the Millennials are -
Shortening product life cycle
– it is one of the major threat that Kraft Singles is facing in Sales & Marketing sector. It can lead to higher research and development costs, higher marketing expenses, lower customer loyalty, etc.
Technology acceleration in Forth Industrial Revolution
– Kraft Singles has witnessed rapid integration of technology during Covid-19 in the Sales & Marketing industry. As one of the leading players in the industry, Kraft Singles needs to keep up with the evolution of technology in the Sales & Marketing sector. According to Mckinsey study top managers believe that the adoption of technology in operations, communications is 20-25 times faster than what they planned in the beginning of 2019.
Regulatory challenges
– Kraft Singles needs to prepare for regulatory challenges as consumer protection groups and other pressure groups are vigorously advocating for more regulations on big business - to reduce inequality, to create a level playing field, to product data privacy and consumer privacy, to reduce the influence of big money on democratic institutions, etc. This can lead to significant changes in the Sales & Marketing industry regulations.
Environmental challenges
– Kraft Singles needs to have a robust strategy against the disruptions arising from climate change and energy requirements. EU has identified it as key priority area and spending 30% of its 880 billion Euros European post Covid-19 recovery funds on green technology. Kraft Singles can take advantage of this fund but it will also bring new competitors in the Sales & Marketing industry.
Barriers of entry lowering
– As technology is more democratized, the barriers to entry in the industry are lowering. It can presents Kraft Singles with greater competitive threats in the near to medium future. Secondly it will also put downward pressure on pricing throughout the sector.
Increasing wage structure of Kraft Singles
– Post Covid-19 there is a sharp increase in the wages especially in the jobs that require interaction with people. The increasing wages can put downward pressure on the margins of Kraft Singles.
Consumer confidence and its impact on Kraft Singles demand
– There is a high probability of declining consumer confidence, given – high inflammation rate, rise of gig economy, lower job stability, increasing cost of living, higher interest rates, and aging demography. All the factors contribute to people saving higher rate of their income, resulting in lower consumer demand in the industry and other sectors.
Trade war between China and United States
– The trade war between two of the biggest economies can hugely impact the opportunities for Kraft Singles in the Sales & Marketing industry. The Sales & Marketing industry is already at various protected from local competition in China, with the rise of trade war the protection levels may go up. This presents a clear threat of current business model in Chinese market.
High level of anxiety and lack of motivation
– the Great Resignation in United States is the sign of broader dissatisfaction among the workforce in United States. Kraft Singles needs to understand the core reasons impacting the Sales & Marketing industry. This will help it in building a better workplace.
Easy access to finance
– Easy access to finance in Sales & Marketing field will also reduce the barriers to entry in the industry, thus putting downward pressure on the prices because of increasing competition. Kraft Singles can utilize it by borrowing at lower rates and invest it into research and development, capital expenditure to fortify its core competitive advantage.
High dependence on third party suppliers
– Kraft Singles high dependence on third party suppliers can disrupt its processes and delivery mechanism. For example -the current troubles of car makers because of chip shortage is because the chip companies started producing chips for electronic companies rather than car manufacturers.
Capital market disruption
– During the Covid-19, Dow Jones has touched record high. The valuations of a number of companies are way beyond their existing business model potential. This can lead to capital market correction which can put a number of suppliers, collaborators, value chain partners in great financial difficulty. It will directly impact the business of Kraft Singles.
Increasing international competition and downward pressure on margins
– Apart from technology driven competitive advantage dilution, Kraft Singles can face downward pressure on margins from increasing competition from international players. The international players have stable revenue in their home market and can use those resources to penetrate prominent markets illustrated in HBR case study Kraft Foods Canada: Targeting the Millennials .
Weighted SWOT Analysis of Kraft Foods Canada: Targeting the Millennials Template, Example
Not all factors mentioned under the Strengths, Weakness, Opportunities, and Threats quadrants in the SWOT Analysis are equal. Managers in the HBR case study Kraft Foods Canada: Targeting the Millennials needs to zero down on the relative importance of each factor mentioned in the Strengths, Weakness, Opportunities, and Threats quadrants.
We can provide the relative importance to each factor by assigning relative weights. Weighted SWOT analysis process is a three stage process –
First stage for doing weighted SWOT analysis of the case study Kraft Foods Canada: Targeting the Millennials is to rank the strengths and weaknesses of the organization. This will help you to assess the most important strengths and weaknesses of the firm and which one of the strengths and weaknesses mentioned in the initial lists are marginal and can be left out.
Second stage for conducting weighted SWOT analysis of the Harvard case study Kraft Foods Canada: Targeting the Millennials is to give probabilities to the external strategic factors thus better understanding the opportunities and threats arising out of macro environment changes and developments.
Third stage of constructing weighted SWOT analysis of Kraft Foods Canada: Targeting the Millennials is to provide strategic recommendations includes – joining likelihood of external strategic factors such as opportunities and threats to the internal strategic factors – strengths and weaknesses. You should start with external factors as they will provide the direction of the overall industry. Secondly by joining probabilities with internal strategic factors can help the company not only strategic fit but also the most probably strategic trade-off that Kraft Singles needs to make to build a sustainable competitive advantage.