1.1 Brief Background of Kraft Foods
The history of KRAFT goes back to 1903, when, the company started with US $65 in Capital. Founded by James L, Kraft an American food and Beverage conglomerate which Headquarters was based in Northfield, Illinois employing over 140,000 employees operating in over 70+countries. KRAFT has 180 manufacturing and Processing Facilities and developed 11 Research and Development Centers.
1.2 Brief Background of Cadbury
Cadbury British Beverage Company founded in 1824 by John Cadbury. The business Headquartered is in Bxbridge which is Birmingham UK the company has employed over 71,000 employees and interacting with 35,000 direct and indirect suppliers direct operations in over 60 countries.
2.0 ENTRY STRATEGY INTO FOREIGN MARKET AND REASONS
The method of entry used is Kraft purchasing Cadbury through the acquisition method of entry.
2.1 RATIONALE FOR EXPANDING
Kraft acquired Cadbury to diversify their business having an iconic portfolio of products and brands. Gaining an additional market share in chocolate confectionery industry.
To take advantage of the strong Cadbury distribution in immediate consumption channes ( E.g Gas Stations , Newsstands etc . Capitalizing on Cadbury's market share in India, Brazil and Mexico to increase global presence and revenue. In addition to create a Performance - Driven, Value - Led Culture.
3.0 MACRO ENVIRONMENT ANALYSIS
Kraft Acquisition of Cadbury competitors were on the market for a longer period and would have already done market penetration and already acquired their market. However Kraft and Cadbury would have done market research and analysis before coming on the market to have ways for survival after acquisition. According to Johnson and schools (2006) the direction and scope of an organization over the long term which achieves advantages for the organization through its configuration of resources within a changing environment to meet the needs or markets and to fulfill shareholders expectations. (Griffith and Wall, p, 606.)
Several steps can be used to assess the strategic possibilities for Kraft and Cadbury; these are the SWOT, PESTLE, Porter's Five Forces Analysis and Ansoff Matrix.
3.1 The SWOT Analysis for Kraft and Cadbury
Wheelan and Hunger (1998) used SWOT to look for gaps and matches between competences and resources and the business environment. (History of SWOT Analysis)
* Affordable Prices
* Business Logo is very attractive which stand out from the rest of businesses
* Friendly Staff , Neatly Attired in the company uniforms with logo
* Advertisement is via the social networks, word of mouth, Emails and all available advertising tools available to the business such as flyers.