Mars Inc vs. Kraft Foods Inc
Kraft Foods Inc. and Mars Inc. are popular firms for their dealings in the food industry besides the competition in the field. Generally, Kraft Foods deals with the distribution of food stuffs around the United States and similarly has many branches all over the world. The distributed items include beverages as well. On the other hand, Mars Inc deals with the manufacturing of a variety of food stuffs which include human and pet foods. It is worth noting that though the two firms have similar contents in their business, the Mars Inc is a manufacturing firm while the Kraft Foods Inc is a distribution firm. This explains the differences that are clear in the two businesses in terms of strategy to the values upheld by each. This paper is aimed at analyzing the conspicuous and the underlying differences in how the businesses are conducted and their techniques of succeeding in the relatively crowded industry.
This is basically the long term plans for the organization towards a particular goal and succeeding in the specific area. This particularly includes the capacity and direction the firm is taking or planning to take in future towards its goals.
For instance, the organization had a branch in Australia that acted as its distributor which bore the name Masterfoods. Part of its long term plans was to ensure that they create a brand for their products so that they would be easily identifiable in the market. Thus, the firm’s name plus all their branches were changed so that they would all be called Mars Inc. Similarly, the organization went ahead to distinguish its different confectioneries in the market so that they would be preferable to the different targets and capable of serving a wider population. This is the consideration of the scope of the business in the strategies that are applied. The business also majors in the confectionery and food staff field as their only manufactured commodities. This is to ensure they do not lose focus of their direction and do whatever they do to the best of their capacity.
As previously discussed, the Kraft Foods is more in the distribution sector of the confectionery and foods field, thus it applies relatively different business strategies as compared to the Mars Inc which is a manufacturing organization of the same. According to Autumn, (2009), “when a company’s corporate core gets too far from its businesses, from the marketplace, and from its consumers, then a new organizational model may be needed.” From the trend analysis of the organization, it is quite evident that the management of the firm has varied over the years to ensure they keep on track with the existing and potential competition. For instance, where difficulties in one specific area have been experienced, professionals and experts in the field of consumer behavior are hired to correct the situation. Similarly, the management is descriptive in that it follows theoretical concepts put in practice to survive the market competition, thus the argument regarding the use of new organization models. This is applied in the distribution of their specific products.
This is basically the ability of a firm to deliver similar products in the market as other firms in the same industry – rivals/competitors- but at a less price than they do. Chances are they will draw the attention of most of the clients in the field. It is an undoubtedly proved fact that each firm with good knowledge regarding consumer behavior has an aspect that distinguishes it from the others, thus creates its own competitive advantage. This therefore ensures a balance is achieved in the industry.
Kraft Foods has been reputable for the very capable management it has enjoyed over the years in distribution. This is achieved through the intense training management is required to undergo, in addition to the large salaries that they are paid to maintain their loyalty. Thus, the capable decision making of their management led to the establishing of the ‘Organization for Growth’ idea in 2008 which was a massive success in addition to a popularity stunt (Autumn, 2009). This saw the rewriting of the firm and beginning of a culture of working under pressure and making decisions very fast where needed even if the field was not the area of specialization. This has enabled the firm to take up many important and profitable positions ahead of their clients, thus, can operate at more efficient and lower costs. This gives them a competitive advantage as well since they operate in the same market for less.
On the other hand, Mars Inc. had funds which made it a step ahead of most of the firms in the industry. We realize that for a firm to enjoy a competitive advantage it has to possess a resource that is of greater value than the other of which for the Mars Inc; it was the accessibility to funds. This could enable the funding of new projects, manufacturing of new commodities of better quality to reduce the chances of the competitors. According to the report by (Yousfi, 2008), a merger between the firm Warren Buffett could only be possible where an organization had enough funds and capability of sourcing for more. It is also worth noting that Mars Inc, formed a merger with the same in an attempt to have a guaranteed market for its products. The concept is however clear that the organization was financially capable which gave the chance to form such mergers and maintain a step ahead of the other firms. Thus, unlike Kraft Foods whose resource was the skills and knowledge, Mars Inc had more tangible resources that gave it its competitive advantage.
This is the analysis/evaluation of the strengths, weaknesses, opportunities and threats of an organization.
From a general perspective, it is quite clear that one of the strength enjoyed by Mars Inc is that they have the necessary popularity as a result of appropriately marketing their products. Due to the unique brand they have created, they are today in America ranked as the second best manufacturers and distributors of confectionery products (Autumn, 2009) which come in different forms and beverages. This is already a strong point to the firm. A conspicuous weakness is the fact that they teamed up with Warren Buffett which is in the same field thus, instead of competing fairly, its chances of leading in the industry are limited as a result of the merger. Opportunities according to (GlobalData, 2010) relate to the wide spread area of specialization which includes as much as pet foods. Thus, as it is established that many American families have pets, they penetrate into any kind of location provided it is a residential very easily. Threats mostly revolve around the ease of entry of new firms. This is however not basic since the firm is at a point where it is operating at economies of scale which limit entry of other firms.
On the other hand, the strengths of Kraft foods are quite different from those of Mars Inc. (Datamonitor, 2010) is clear in establishing the capability of the firm to gather information and make timely decisions regarding the most difficult situations despite the field. Their management sector is very well established for this purpose, thus, a strong point for the firm. Weaknesses are also very common and possible for any kind of organization. Particularly for Kraft Foods, the establishing of very many firms (branches) and dealing with different products makes it rather difficult to specialize and realize the profit centers. Opportunities are also capable of arising from the above mentioned weakness. Though it is difficult to identify the profit centre, it gives an opportunity to receive different clients and business requests since it is diverse. Finally, the threats are similar in the sense of entry of new firms. Where the firms can easily enter or compete, the profits are likely to go down when this happens.
Marketing strategies and Ethical Values
This is not a widely explored and researched are following the similarity and differences of the firms. However, it is a general assumption that every successful firm is as a result of discipline and commitment to the duties. From the various aspects pertaining to the organization, the Mars Inc is specific on performance and pooling of finances. Similarly, the marketing design used is based on the merger with the Warren Buffett firm which is much more popular, thus, they share in the fame as a marketing strategy. It is also worth noting that the adjustments made where the entire branches bore the name of the head firm was a well designed way of marketing their commodities. Kraft Foods deals with separation of their products and branding them as a marketing strategy. However, the ethical standards of the firm are much more comprehensive than for Mars. We realize that the training offered to the management and the skills which are the major resources are based on the good leadership and skill offered. The firm thus is keener on observation of ethics.
It is a clear concept and has been put across by many analysts that an adaptive characteristic among modern firms should be evident in order to survive competition n. Similarly, trends emerging should be applied depending on the field to avoid wrong executions of some of the organization theories. Thus, the comparison of Mars Incorporated and Kraft Foods Incorporated gives a wider picture of how firms of the same nature and industry can both perform well with different ideology and application of organization theories. However, good management and decision making capability is fundamental especially in times of crisis or emergency opportunities which cannot afford to be lost.
Autumn, (2009). Inside the Kraft Foods Transformation. Consumer Product. Retrieved from http://www.strategy-business.com/article/09307?gko=399b2
Datamonitor, (2010). Kraft Foods, Inc. – SWOT Analysis. Research and Markets. Retrieved from http://www.researchandmarkets.com/reportinfo.asp?report_id=556366&tracker=related
GlobalData, (2010). Mars, Incorporated – Strategic Analysis Review. Research and Markets. Retrieved from http://www.researchandmarkets.com/reportinfo.asp?report_id=1291061&tracker=related
Yousfi, J. (2008). Mars Teams up With Berkshire Hathaway and Warren Buffett in $23 Billion Buyout of Wrigley. Money Morning. Retrieved from http://moneymorning.com/2008/04/29/mars-teams-up-with-berkshire-hathaway-and-warren-buffett-in-23-billion-buyout-of-wrigley/
PLACE THIS ORDER OR A SIMILAR ORDER WITH GRADE VALLEY TODAY AND GET AN AMAZING DISCOUNT