Part 3

Revised Mission Statement

At Kraft Heinz, we aspire to provide delicious foods and beverages (2) to help individuals and families (1)
around the world (3) eat and live better. With the aid of cloud-based AI software to continually drive
improvement (4), we aim for consistent growth (5) in a socially and environmentally sustainable manner
(8). Embodying our company's Purpose, "Let's Make Life Delicious" (6), our employees work together as
a tight-knit team (9) to ensure that our consumers receive appetizing, affordable products without
sacrificing quality (7).

Revised EFE & IFE Matrix

Key External Factors Weight Rating Score

Opportunities
Sauce market forecasted to increase by 20% by 2025 brings
chance for consistent growth 0.09 4 0.36
Acquiring new brands to increase brand exposure globally to
increase customer base 0.04 2 0.08
Introducing new products that target a different customer base
of individuals and families 0.02 2 0.04
Appeal to health-conscious consumers and help them live and
eat better 0.06 3 0.18
Eco friendly packaging more appealing to consumers and helps
environmental sustainability 0.03 3 0.09
Large global market for sauces to share our products with
customers around the world 0.09 4 0.36
Use of AI software to continuously drive improvement 0.06 3 0.18
Demand for dairy expected to increase rapidly over the next ten
years brings chance for consistent growth 0.09 3 0.27
Key External Factors Weight Rating Score
Threats
Many competitors in the food industry 0.08 1 0.08
Trend towards healthy options can take away sales from
processed foods 0.07 3 0.21
Increased prices throughout the supply chain due to pandemic 0.05 2 0.10
Natural disasters such as drought can impact raw materials
needed for production 0.09 1 0.09
Food safety regulations 0.02 2 0.04
Changing consumer preferences 0.07 3 0.21
Rising costs make customers more likely to go for generic brands 0.08 3 0.16
An unstable global market increases the foreign exchange risk 0.06 1 0.06
Total 1.00   2.51
The total score of Kraft Heinz is 2.51 which indicates their position is between minor weakness and
minor strength.
Kraft Heinz’s mission is to provide delicious foods and beverages to help individuals and families around
the world eat and live better. Some major opportunities that will allow the company to continue to do
so are bringing in new healthier options and acquiring global brands. The expected growth in the sauce
and dairy markets will allow Kraft Heinz to continue to grow sustainably. Partnering with firms to
develop cloud-based AI software will help to continually drive improvement and keep the company
ahead technologically. Goals to make eco-friendly packaging will help the company environmentally
sustainable. All this will enable Kraft Heinz to continue embodying the company's Purpose, "Let's Make
Life Delicious." Threats to Kraft Heinz’s consistent growth are rising prices that make consumers more
likely to go towards generic brands. Also, natural disasters pose a large threat because of the damage
they can cause to crops. By evaluating these opportunities and threats, Kraft Heinz can continue to
ensure that its consumers receive appetizing, affordable products without sacrificing quality. 

Key External Factors Weight Rating Score

Strengths
Brand Name 0.08 3 0.24
Strong distribution channels 0.10 4 0.40
Strong brand portfolio 0.08 3 0.24
Global presence 0.09 4 0.36
Product Development 0.07 3 0.21
Strong cash position 0.08 4 0.32
Key External Factors Weight Rating Score
Weaknesses
Profit Margin 0.08 1 0.08
Inability to understand customers’ needs 0.09 1 0.09
Reliance on a few large retailers 0.05 2 0.10
Accounting fraud 0.11 1 0.11
Price competition 0.07 2 0.14
Numerous substitutes 0.10 2 0.20
Total 1.00   2.49

Kraft Heinz is a large food and beverage company that has several well-known and popular brands, such
as Heinz, Kraft, Oscar Mayer, and Planters. These brands have high brand recognition and are trusted by
consumers, which can help to increase customer loyalty and brand reputation. According to the annual
report of Kraft Heinz of 2021 Walmart Inc. took up approximately 22% of their net sales in both 2021
and 2020. In 2021, the five biggest clients in the U.S. section contributed roughly 50% of the section's
sales revenue, the five biggest clients in the international segment contributed roughly 17% of the
section's sales revenue, and the five biggest clients in the Canada segment contributed roughly 74% of
the section's net sales(Investor relations | the Kraft Heinz Company). Research and development
expenses were approximately $140 million in 2021, $119 million in 2020, and $112 million in 2019
(Investor relations | the Kraft Heinz Company). Long-term growth in investment in R&D funding has
helped Kraft Heinz improve its product offering, operations and sustainability practices, resulting in
increased sales, profitability and competitiveness. According to Kraft's consolidated statements of cash
flows, the cash flow increased from $3,552 million in 2019 to $4,929 in 2020 and increased from $4,929
in 2020 to $5,364 in 2021. The increase in cash flow from 2019 to 2021 can be a positive sign for the
company's financial health and ability to generate cash. This increase in cash flow is due to improved
profitability, efficient operations, and successful cost-saving initiatives. This can be a strength for Kraft
Heinz in the IFE matrix, providing the company with financial stability and flexibility to invest in growth
opportunities and weather economic downturns.

Subsequently, Kraft Heinz saw a massive decline in their profits in 2020 due to the pandemic. Their net
profit was reported at $361 million as compared to $1.9 billion from 2019 (Kraft Heinz, 2020). A low net
profit or a decline in net profit indicates weaknesses that may limit a company's ability to invest in
growth opportunities or meet its financial obligations. In the case of Kraft Heinz, the decline in net profit
in 2020 can be a weakness for the company in the IFE matrix, as it indicates that the company's financial
performance was negatively impacted by the pandemic. Kraft has fallen behind the evolving tastes of
customers, which are the result of a shrinking planet and the digital revolution (Can Kraft keep up with
its consumers?). Kraft Heinz has been criticized for being slow to respond to changing consumer
preferences and trends, particularly in the health and wellness space. This can result in missed
opportunities, lower sales, and decreased customer satisfaction. According to the annual report of Kraft
Heinz of 2021, Walmart Inc. took up approximately 22% of their net sales in both 2021 and 2020. The
benefits are that there is a stable sales channel, and production materials and logistics are relatively
stable. The disadvantage is that if Walmart cancels an order, it will have a significant impact on Kraft's
sales and purchasing. This bargaining power makes it necessary for Kraft to negotiate lower margins and
meet more of Walmart's contractual requirements. As Kraft faces competition from other food and
beverage companies that offer similar products at lower prices. This can result in lower profit margins
for Kraft Heinz and may limit the company's ability to raise prices. Additionally, price competition may
lead to increased marketing expenses as the company tries to maintain market share and attract
customers. Consumers have a wide range of options to choose from in the food and beverage market,
and this may make it challenging for Kraft Heinz to retain customers and maintain market share.
Additionally, substitutes may include healthier or more environmentally friendly options, which may
appeal to customers who prioritize these factors over brand loyalty or taste.

Investor relations | the Kraft Heinz Company. (n.d.). Retrieved March 3, 2023, from
https://ir.kraftheinzcompany.com/static-files/0db85a7d-9362-4612-9c2f-334d89a71ded

Monday. (n.d.). Can Kraft keep up with its consumers? The New Economy. Retrieved March 5,
2023, from https://www.theneweconomy.com/business/can-kraft-keep-up-with-its-consumers.
COMPETITIVE ANALYSIS

Porter’s Generic Strategies Discussion

Michael Porter has two main strategies, Cost Leadership and Differentiation, which can be broad or
narrow focused. While Kraft Dinner applies both strategies to some extent, the one that is most
applicable to the company, and the one that it currently uses the most, would be differentiation for a
broad market.

Due to the high number of competing firms, both differentiation and cost leadership advantages can be
difficult to achieve. A pure cost leadership strategy would be difficult for Kraft Heinz to pursue because
generic and store brands usually have slightly to significantly lower cost with variable levels of quality. A
low-price strategy would be especially difficult while continuing to ensure that consumers receive
appetizing, affordable products without sacrificing quality.

A differentiation strategy allows Kraft Heinz to play to their strengths to continue a competitive
advantage and grow sustainably in the global market. Since the company cannot compete purely on
price, it can rely on a variety of factors to make consumers more willing to pay a premium price for their
products.

Those who are very price sensitive will likely always go for the cheapest substitute product, but
customers who buy brand name food products will likely continue to do so regardless of price increases.
This is evidenced from the fact that the pandemic price increase was followed by a much lower decrease
in products sold as mentioned under Potential Development of Substitute Products.

Kraft Heinz has a strong global brand recognition for its products that are well known for their taste and
quality. Going with a Kraft Heinz product means buying something you recognize and trust. Kraft Heinz
products have also been around for a long time, so they can lean on nostalgia to sell its products: this is
what I grew up eating and it is what I will feed my children.

Another way Kraft Heinz can differentiate their products is by offering a greater variety than their
competitors. For example, Walmart.ca has the traditional Original Kraft Dinner, and for a slight premium
in price they have up to 10 other varieties of Kraft Dinner. This includes different flavours, different
pasta shapes, microwavable snack cups, and cauliflower noodles.

In 2019 Kraft Heinz faced a scandal where it wrote down the value of the Kraft and Oscar Mayer, posted
a $12.6 billion loss, cut its dividend, and announced its accounting practices were under investigation by
the Securities and Exchange Commission (Wattles). Following this, the company hired a new CEO and
announced a new business strategy which they started implementing amidst the pandemic in 2020. This
strategy helps Kraft Heinz better use its resources to differentiate its products by focusing more on what
customers want.
Older version of question 3?: i think this is the version shuo wrote

Kraft Heinz Company can adopt the following to achieve its differentiation strategy. First, customers can
consider Kraft Heinz unique if it changes the packaging mechanism. Packaging can be defined as
wrapping a product to deliver it to the customer. The rationale for modifying the packaging process is to
ease identification in the marketplace and increase customer attention. Kraft Heinz Company can
differentiate itself from its competitor by changing the colour, materials and labelling. For example, the
ketchup can be packaged using a white bottle compared to the transparent one. The action increases
attention as a customer associates the colour with perfection and cleanliness. In addition, the
organization can attach instructions to the bottle lid other than sticking information on the sideway of
the bottle. Information to be attached on the lid include but is not limited to ingredients, manufacture
and expiry date, nutrition benefits and batch number. Customers can quickly identify Kraft Heinz
products from the list of competitors such as Nestle. Also, Kraft Heinz Company can use sustainable raw
materials to make packaging materials. For example, using vegetables and starch to make bio-plastic
packaging materials (Shlush, E., & Davidovich-Pinhas, 2022). It will help Kraft Heinz Company achieve its
2025 vision of becoming a 100% sustainable organization.

Secondly, the US-based organization can achieve a differentiation strategy by adjusting the product
prices. In this case, the organization offers to sell a product at a special price compared to the
competitors. However, the buyer must be willing to accept the price. The agreeable price between the
buyer and the seller must cater to the production cost, quantity and expected profit. The rationale for
adjusting price ensures that the organization serves almost all the market segmentation and meets its
objectives. Serving all the target markets calls for the organization to have high and low-priced ketchup,
accommodating low and high-income earners (Buheji et al., 2020). One must note that Kraft Heinz
Company is serving customers recovering from the impacts of the Covid 19. The pandemic rendered
these customers with no income due to the loss of jobs and poor business performance. Therefore, the
pandemic reduced their consumption power.

Moreover, setting higher and lower prices will help Kraft Heinz meet the organization's objectives. These
objectives include but are not limited to increasing the sales revenue and market share by opening up
branches beyond North America. Kraft Heinz Company may benefit from more than two markets. For
example, the company may sell more high-priced ketchup in the UK while there is an increased demand
for low-priced ketchup in North America. It helps the organization remain operational since the food
industry is highly competitive.

The third means of achieving the differentiation strategy is modifying customer services. It aims at
increasing customer experience with the product before buying and using it. Kraft Heinz might
differentiate its services from Tyson Foods by promptly responding to customer complaints. It includes
customers who walk into the organization or those who prefer engagement in an online platform. Kraft
Heinz is a tech company that can use Artificial Intelligence to make critical decisions. For example,
identifying a customer need and responding to it immediately through a product or service. In addition,
Kraft Heinz customers have an increased knowledge towards their health. These customers avoid
crowded places for fear of contracting coronavirus (Dsouza & Sharma, 2021). It prompts Kraft Heinz to
initiate a more appealing customer service that delivers food to the customer at their doorsteps. The
organization can also request home customers to express their experience with the product via the
online platform. Improving customer services is beneficial because it increases customer loyalty and
improves Kraft Heinz’s profits. Customers get attached to a brand that meets almost all their needs. For
example, home delivery increases customer satisfaction, leading to more engagements. In addition, the
organization can reap more benefits from selling the products. For example, more customers will be
willing to buy the ketchup, translating to more revenue for Kraft Heinz. It results from the increased
Customer Lifetime Value (CLV)-customer relationships increase referrals. In this case, the company
benefits from the customers in two ways; reaping profits and helping spread awareness about the
product.

Fourthly, advertising is another means for Kraft Heinz to achieve the differentiation strategy. A unique
advertisement aims to increase brand recognition and attract more customers. Advertisement can be
defined as the process of promoting the sale of a product by disseminating crucial information such as
ingredients and benefits. Kraft Heinz might remain competitive if it embraces a unique advertisement
style and covers many target audiences. A unique advertisement style requires the organization to
embrace Augmented Reality (AR). It involves using 3-D to display advertisement content such as images
and videos (Yang et al., 2020). For example, show a picture of a happy family that has just finished using
ketchup. The picture should be accompanied by an eye-catching phrase not exceeding 4 words. The
interactive nature of the advert increases the customer's willingness to know more about the product.
In addition, Kraft Heinz may interact with customers at their convenient locations, such as offices. The
marketing officer offers some introduction and later requests to play games with the target. Examples of
these games include Angry Birds, Temple Run and Candy Crush. The act increases customer
engagement, boosting their memory in remembering the product and pointing it out from a
competitor's. One-on-one engagement eliminates fear between the target and the marketer, creating a
friendly interaction. It encourages marketers to gather feedback in the form of data that the company
can translate into a need. Moreover, Kraft Heinz may differentiate its advertisement by targeting even
those beyond North America and Canada. For example, Kraft Heinz may offer information on healthy
living to people living in Africa. Once Africans relocate to North America, they become potential
customers for Kraft Heinz.

Lastly, Kraft Heinz can achieve the differentiating strategy by modifying its product features. The
rationale for the act is to increase the customer consumption power resulting from a wide range of
choices. Kraft Heinz can differentiate ketchup by reassessing the ingredients, taste, and state. The
company may produce ketchup with five primary tastes: sour, bitter, salty, umami and sweet (Park et al.,
2022). In addition, most of the ketchup is offered in liquid form. Standing out in the market calls Kraft
Heinz to offer the same product in a solid form. It can melt just like margarine when placed in hot food.
Moreover, the company must take great caution on customer health by disassociating from organic
farmers. Kraft Heinz needs to partner with farmers who do not use chemicals to increase productivity,
which harms the customers. Increasing the range of choice may also require Kraft Heinz to produce
ketchup made from GMO ingredients. Once the customers set foot at the organization, they must
purchase the ketchup. Out of the different bottles of ketchup provided, one must meet their needs.
QUESTION 3 - Prithevi

In order to achieve the differentiation strategy, Kraft Heinz should consider joint venturing and
acquisitions. Firstly, joint ventures can help achieve differentiation as they facilitate growth, gain
a competitive advantage, and create diversity among products (David and David). Kraft Heinz’s
competitors, Nestle and General Mills both teamed up to create a joint venture called Cereal
Partners Worldwide (CPW), to sell breakfast cereals globally excluding the U.S. and Canada
(Nestle). This is an example of both companies using each of their best qualities to maximum
advantage. For example, Nestle is the world's largest food and beverage company, giving them
access to a large customer base, and General Mills is one of the top companies in the
packaged food industry and are mainly known for their Cereal brands. With CPW, they were
able to sell different types of cereals including Nesquik, Cheerios, and a fitness breakfast cereal
to consumers all over the world. Through this joint venture, Cereal Partners is now among the
top cereal companies on a global scale (Nestle-cereals)

Similarly, Kraft Heinz can also increase their variety of products by introducing frozen meals as
they have limited products being sold in this category. This helps improve product development
as well as related diversification. For example, they can form a joint venture with a well-
established frozen food company like McCain Foods Limited or an equivalent, to bring about
new products to consumers. McCain Foods is a multinational company that is the leading
producer of frozen french fries worldwide (McCain). Together, they can introduce different fries
alternatives with additional flavours and cuts, or introduce a new frozen meals line that sells
products which are not originally sold by both companies. For example, frozen pizzas, lasagna,
spaghetti, or burrito bowls to name a few. Both companies offer something unique, and when
combined would be beneficial to customers. Another advantage for these two companies to
collaborate is that individually their foods are complementary, for instance, McCain’s french fries
and Kraft Heinz ketchup yield a great pairing, giving them a greater motive to work together.
When looking at the EFE matrix, this joint venture is an opportunity to increase brand visibility
and global expansion outside North America. It will also help Kraft Heinz build on their current
strengths by improving their portfolio, global presence, and product development. To sum up, a
collaboration with a well-known frozen foods company that has great customer loyalty can bring
about differentiation for Kraft Heinz.

Next, Kraft Heinz should consider acquiring new brands to produce and sell a variety of
products and diversify their portfolio. The EFE matrix shows that one of their greatest threats is
the large number of competitors in the food industry, and so acquisitions can help differentiate
products and give them a competitive advantage. It is also important to note that too much
diversification can lead to a failed acquisition. Furthermore, acquisitions can fail due to other
reasons such as overvaluing the impact of their acquisition, misunderstanding the functions of
the acquired company and their demographics, if shared values are not aligned in the employer-
employee relationship, or bad timing in the industry (David and David). Hence, Kraft Heinz must
thoroughly research the target company and conduct analyses before the acquisition.
Moreover, when done right, it can help reduce costs, increase visibility across borders, and
attract new customers, all of which can help with the production and selling of various products.
A recent example of a successful acquisition is Kraft Heinz acquiring Assan foods to expand
their visibility in the middle east and Africa (Kraft Heinz). This led to an increase in innovation,
access to new talent, differentiation, and sales growth. Kraft Heinz can also consider future
acquisitions in countries they have little to no exposure in and markets they have not yet broken
into to help with the differentiation of their products and aid in market development.

Question 4

The corporate landscape is currently constantly evolving. Consumer product (CP)

organizations must frequently be capable of rapidly reinventing, adjusting, and differentiating
market identities to foster brand recognition. Although numerous CP players try to use tried-and-
true differentiation pedals like international and regional integration through mergers and
acquisitions (M&A), steadily increasing automation, and innovative thinking, they are also
coming up with refreshed, more daring plans for how to use these tools in the context of a more
secure US and globalized trade (Deloitte Center for Industry Insights, 2018). The tactics Kraft
Heinz might employ to differentiate in the CP market and how it could be accomplished will be
discussed below.
M&A is an innate avenue to digitalization and globalization (Deloitte Center for Industry
Insights 9). Based on Chapter 5 on long-term objectives, shareholders constantly demand
businesses to keep growing their gross margin revenues, bottom quarter net earnings, and
dividend payouts. Businesses frequently must choose between build, borrow, or buy to achieve
this goal. Building involves domestic expansion; borrowing involves external expansion through
collaborations, joint ventures, affiliations, and purchasing, ultimately involving mergers and
acquisitions. This tactic allows Kraft Heinz to set itself apart from its rivals. To increase its
product line, obtain intellectual property (IP), and build client bases in other regions, Kraft Heinz
will be able to buy smaller companies in the CP space which would offer Kraft Heinz the chance
to broaden its market, acquire technological advances, and increase its client base, which in turn
would help the business differentiate out from its competitors. An illustration of an alliance at
work is the Kraft Heinz Foundation Board of Directors acknowledged Heifer International's
lengthy and game-changing framework as the ideal augment to its objective of self-sustaining
starvation remedy (Kraft Heinz 2021, p. 31). As a result, enlisted "Business alliances such as this
one will empower them to integrate more individuals needing assistance to fresh, nutritious food,
whereas strengthening food systems that ensure the long-term provision and an increasingly
equal and fair prospect for production companies."
Many organizations are impacted by digital innovations and tools in various ways, from
logistics and purchases to consumer interaction. Nonetheless, some businesses progressively
integrate their digital strategy into their entire corporate structure. According to Medinskaia (
2020, p. 72), a customer's perspective and preference for the goods may be altered when
purchasing the items in person instead of online. The ambience of the store, the company of
other shoppers, the range of available products, and the facts surrounding the purchase all impact
how consumers perceive and behave. Therefore, considering these aspects through employing
this approach, Kraft Heinz can position itself against its opponents by utilizing digital tools to
boost their advertising and promotional skills, increase client involvement, and offer a tailored
customer shopping encounter. Nevertheless, Kraft Heinz also needs to be mindful of the online
food component, which is regularly employed by customers who tend to purchase electronically.
Consumers who exhibit this conduct are said to be regular members of digital platforms by Lok
(2017, p. 25). The electronic grocery, often known as an e-grocery or even more popularly
"online grocery," is the outcome of the digitalization of the food service sector.
According to Ze, Abbas, Hussain, & Jiao (2018, p. 12), being responsive to novel ideas
and suggestions from others is one of the qualities associates should possess to increase trust.
Kraft Heinz has been working cooperatively to create cutting-edge plant-derived sweetener
package technology to reduce artificial sweeteners in Kraft Heinz items by approximately 50%
(Kraft Heinz, 2021, p. 37). Though consumer product businesses have always been pioneers in
communicating with customers through conventional market experimental procedures, many
corporations are now soliciting innovators and typical clients to pitch ideas through virtual
forums like NineSights.com, Indiegogo.com, and eYeka (Deloitte Center for Industry Insights
2018, p. 7). Such websites link large and small firms with unique talents and creative individuals
intending to utilize their innovative thinking.
Corporations invest time and resources into innovation and adopting global developments
that impact customer inclinations, the packaging sector, and enterprises across all industries. If
Kraft Heinz's packaging design is creatively distinguishable, this would bring new market
patterns stimulating consumer attention and can separate a new arrival in the marketplace of
Fast-Moving Consumer Goods (FMCG) and drive purchasing decisions. Nonetheless, efficient
packing can be developed for comparatively minimal cost and help an organization since it is
preferable to costly advertising (Medinskaia 2020, p. 17). For Kraft Heinz, offering online food
services could be a great approach, as recommended, as a differential delivering innovation
strategy like a multi-channel delivery service (Lok 2017, p. 74). Kraft Heinz might employ an
inventive thinking approach to packaging and delivery as a means of establishing itself beyond
its opponents.
Conclusively, by utilizing M&A, digital techniques, and creative thinking, Kraft Heinz
can stand out in the CP market. Additionally, by incorporating digital technologies into its
corporate structure, Kraft Heinz may improve its advertising and promotional abilities, promote
consumer interaction, and provide a customized shopping experience for customers.
Furthermore, Kraft Heinz may differentiate itself from its competitors by using creative
packaging ideas and deliveries through innovative thinking. However, the internet food
component is an aspect that Kraft Heinz should be cautious of because it is heavily regulated.
Question 6: Grand Strategy Matrix

The Grand Strategy Matrix is a tool that is used to identify alternative strategies for a company
based on their competitive position, represented on the x-axis, and the growth of the market in
which they operate, represented on the y-axis.

Competitive Position

Kraft Heinz is one of the largest food and beverage companies in the world. Thanks to the
success and longevity of several iconic brands, Kraft Heinz has a strong brand image – and
combined with the company’s economies of scale, allowing them to reduce costs and operate
more efficiently, Kraft Heinz has managed to succeed in a highly competitive industry.

Kraft Heinz’s competitive position can be further explained through the use of Porter’s Five
Forces. Due to the presence of large competitors with similarly strong brand loyalties and
overlapping product offerings, Kraft Heinz faces intense competition within the food and
beverage industry from rivals such as Mondelez, Nestle, and PepsiCo. These competitors also
undermine Kraft Heinz’s position in the market due to the threat of substitute products, where
competitors may fill in a niche that is not covered by Kraft Heinz’s product lines at a higher
quality or at a lower price.

Despite these impeding factors, Kraft Heinz can maintain their position in the market in part
due to the relatively weaker impact of the other three forces. The bargaining power of suppliers
is diminished by the fact Kraft Heinz sources their raw materials from many different suppliers
around the world, while the threat of new entrants is minuscule because of high entry barriers,
no economies of scale, and a lack of brand loyalty. Given the number of cheaper substitutes in
the market, buyers do have some amount of bargaining power – but the impact of buyer
bargaining power is lessened by the great value provided by Kraft Heinz products and their
branding, even if their prices may not be the lowest.

Kraft Heinz has identified six different consumer platforms by which they plan to further
develop their competitive position: Taste Elevation, Easy Meals Made Better, Real Food
Snacking, Fast Fresh Meals, Easy Indulgent Desserts, and Flavorful Hydration (“Form 8-K”). By
grouping their products and brands into these specific categories, Kraft Heinz can more easily
design and implement strategies to help the company grow.

Market Growth

In the Grand Strategy Matrix, markets with an annual growth rate greater than 5% can be said
to be experiencing rapid growth. For the global food market, revenues are expected to grow at
a compound annual growth rate (CAGR) of 6.21% from 2023 to 2027, which is a good indicator
for Kraft Heinz’s growth in the future (“Food”).

Looking more closely at categories of foods that are relevant to Kraft Heinz, worldwide
revenues for sauces and spices are expected to grow at a CAGR of 5.60%, spreads and
sweeteners are expected to grow at a CAGR of 6.92%, and convenience foods are expected to
grow at a CAGR of 6.03% (“Sauces”; “Spreads”; “Convenience”). These categories align with the
two main platforms that Kraft Heinz uses to drive growth: Taste Elevation, consisting of their
sauce and condiment brands, and Easy Meals Made Better, consisting of foods that are simple
to prepare (“2023 CAGNY”). The Fast Fresh Meals platform, while not one of Kraft Heinz’s main
driving platforms, likely also falls under the convenience foods category.

Other relevant market categories include snack foods with a CAGR of 5.61% (“Snack”), non-
alcoholic drinks with a CAGR of 4.56% (“Non-Alcoholic”), and confectionaries with a CAGR of
4.77% (“Confectionery”). These categories correspond with Kraft Heinz’s platforms of Real Food
Snacking, Flavorful Hydration, and Easy Indulgent Desserts, respectively.

Matrix and Alternative Strategies

Company or Platform x-axis Score y-axis Score Quadrant

(Position) (Growth)

Kraft Heinz (average) 7.33 5.5 I

Taste Elevation 9 7 I

Fast Fresh Meals 8 6 I

Easy Meals Made Better 8 6 I

Real Food Snacking 7 6 I

Flavorful Hydration 6 4 IV
 Easy Indulgent Desserts 6 4 IV

check folder to see original formatting of table

Scores are ranked from 1 to 9. For the x-axis, a score of 1 indicates a weak competitive position
and a score of 9 indicates a strong competitive position. Similarly, for the y-axis, a score of 1
indicates slow market growth and a score of 9 indicates rapid market growth. After assigning
the x and y-axis scores, the quadrant that the company or platform belongs to is determined.

Taking the average of the company’s individual platforms, Kraft Heinz as a whole is located in
Quadrant I of the Grand Strategy Matrix. As such, there are a number of alternative strategies
that Kraft Heinz can implement in order to differentiate themselves and further their
competitive advantage. For example, the company can increase their share in existing markets,
improve their presence in foreign markets, develop new products, gain control over distribution
channels and suppliers, acquire competitors, or add related products to their product portfolio.

Looking at the quadrants for Kraft Heinz’s platforms, we can apply these alternative strategies
to the company in more tangible terms.

Taste Elevation is the company’s strongest platform and includes the iconic Heinz Ketchup,
along with other condiments like Kraft Mayo and Kraft Peanut Butter (“Form 8-K”). Being a
platform in Quadrant I, a market penetration strategy can be advantageous for the company’s
overseas markets: to illustrate, Kraft Heinz can raise a greater awareness for Heinz Ketchup
through social media marketing campaigns, appealing online advertisements, and more active
engagement with customers.

Fast Fresh Meals is another strong platform for Kraft Heinz and includes Oscar Mayer meat
products, Philadelphia spreads, and Kraft Singles, among others (“Form 8-K”). As a platform
located in Quadrant I, a related diversification strategy can bring additional success to Kraft
Heinz. Using meats from Oscar Mayer or cheeses from Philadelphia, for example, Kraft Heinz
can develop various frozen meals that are easy for customers to prepare and consume.

Easy Meals Made Better includes classic products like Heinz Beanz and Kraft Macaroni and
Cheese, as well as recognizable brands like Ore-Ida and Honig (“Form 8-K”). Being a platform in
Quadrant I, a hybrid product development and market development strategy could be
beneficial given the domestic success of these products and brands in certain countries. For
instance, this can be achieved by releasing new flavors of Heinz baked beans and Honig soup
mixes according to the tastes of locals in different countries.
Real Food Snacking has some standout products in the form of Lunchables and Planters Peanuts
(“Form 8-K”). As a platform in Quadrant I, a product development strategy may be effective for
Kraft Heinz. With consumers becoming increasingly more health conscious in recent years, the
company can consider creating an oat or nut-based snack using the same supply channels as
they do for the Planters brand.

Flavorful Hydration and Easy Indulgent Desserts include several timeless brands like Kool-Aid,
Capri Sun, Cool Whip, and Jell-O (“Form 8-K”). Both being in Quadrant IV, a related
diversification strategy would be appropriate for these platforms – in particular, Kraft Heinz can
perhaps look into producing jams and other preservatives using the equipment involved in the
production of Jell-O, Capri Sun, and Kool-Aid.

QSPM Matrix-
Quantitative Strategic Planning Matrix is a tool that is used to evaluate strategic options and
determine which ones are the most viable for an organization. The QSPM matrix is a quantitative
method that helps managers analyze various strategic alternatives based on their feasibility
according to the company's goals and its potential impact on the organization's overall success.
The QSPM matrix works by evaluating each strategic alternative based on its internal and
external factors. The internal factors include strengths and weaknesses of the company, while the
external factors include opportunities and threats of the company.
In the QSPM matrix below,
AS- Attractiveness score
TAS- Total attractiveness score (Weight x AS)

The AS ranking is given by determining how attractive a particular factor is for the alternative
strategy (To what extent does the factor impact the alternative strategy).
0- Not applicable
1- Not attractive
2- Somewhat attractive
3- Reasonably attractive
4- Highly attractive

Introduce new Acquire

products for a established
different customer companies
base

Strengths Weight AS TAS AS TAS

1 Brand name 0.08 4 0.32 1 0.08

2 Strong distribution channels 0.10 3 0.30 2 0.20

3 Strong brand portfolio 0.08 0 0.00 0 0.00

4 Global presence 0.09 4 0.36 1 0.09

5 Product Development 0.07 0 0.00 0 0.00

6 Strong cash position 0.08 2 0.16 4 0.32

Introduce new Acquire

products for a established
different customer companies
base

Weaknesses Weight AS TAS AS TAS

1 Profit Margin 0.08 3 0.24 4 0.32

2 Inability to understand customers’ needs 0.09 4 0.36 3 0.27

3 Reliance on a few large retailers 0.05 0 0.00 0 0.00

4 Accounting fraud 0.11 0 0.00 0 0.00

5 Price competition 0.07 0 0.00 0 0.00

6 Numerous substitutes 0.10 3 0.30 2 0.20

Introduce new Acquire

products for a established
different customer companies
base

Opportunities Weight AS TAS AS TAS

1 Sauce market forecasted to increase by 20% by 0.09 4 0.36 3 0.27

2025 brings chance for consistent growth

2 Acquiring new brands to increase brand exposure 0.04 1 0.04 4 0.16

globally to increase customer base

3 Introducing new products that target a different 0.02 4 0.08 1 0.02

customer base of individuals and families

4 Appeal to health-conscious consumers and help 0.06 0 0.00 0 0.00

them live and eat better

5 Eco friendly packaging more appealing to 0.03 0 0.00 0 0.00

consumers and helps environmental sustainability

6 Large global market for sauces to share our 0.09 2 0.18 3 0.27
products with customers around the world
7 Use of AI software to continuously drive 0.06 0 0.00 0 0.00
improvement

8 Demand for dairy expected to increase rapidly 0.09 2 0.18 3 0.27

over the next ten years brings chance for
consistent growth

Introduce new Acquire

products for a established
different customer companies
base

Threats Weight AS TAS AS TAS

1 Many competitors in the food industry 0.08 4 0.32 2 0.16

2 Trend towards healthy options can take away 0.07 0 0.00 0 0.00
sales from processed foods

3 Increased prices throughout the supply chain due 0.05 4 0.20 2 0.10
to pandemic

4 Natural disasters such as drought can impact raw 0.09 0 0.00 0 0.00
materials needed for production

5 Food safety regulations 0.02 0 0.00 0 0.00

6 Changing consumer preferences 0.07 4 0.28 3 0.21

7 Rising costs make customers more likely to go for 0.08 0 0.00 0 0.00
generic brands

8 An unstable global market increases the foreign 0.06 0 0.00 0 0.00

exchange risk

STAS 3.68 2.22

Based on the results of the QSPM matrix, Kraft Heinz should introduce new products for a new
customer base rather than buying established brands. This is due to the fact that the chosen
strategy has a higher total attractiveness score of 3.68 compared to the strategy of acquiring
established companies, which has a score of 2.22.

The selected approach is bolstered by the corporation's great brand recognition, a strong
distribution channel, expansive global outreach, and strong financial position. The opportunities
that would facilitate in implementing this decision is the forecasted increase in the sauce market,
if different varieties of sauces are introduced, and appealing to health-conscious consumers
looking for alternative products with lesser to no artificial ingredients.

While there exist certain vulnerabilities and threats that might jeopardize the success of this
approach, like an inability to understand customers needs and preferences, and escalated prices
along all stages in supply because of COVID-19 pandemic, the strengths and weaknesses
outweigh them.

Therefore, we would recommend that Kraft Heinz focus on introducing new products and take
advantage of its strengths and opportunities as identified in the QSPM matrix. This may involve
devising new products that entice health-conscious customers or developing products by
surveying people and tailoring their needs. Alternative products could be explored by
introducing products catering toward customers who prefer natural and healthy alternatives such
as organic sauces, drinks, and spreads that are free from preservatives or artificial ingredients.
With this strategy implemented, the company could target a whole new market of customers.

Another potential alternative to implement this strategy would be to diversify their range of
products to cater towards different cultural or ethnic groups. By doing so, they would have
access to untapped markets and broaden their customer base even further. An example of this is
introducing a collection of condiments specially crafted for Asian or Hispanic dishes which are
gaining momentum in various parts across the world today.

Conducting comprehensive market research is crucial to understanding what your consumer base
wants and needs. To effectively engage new customer segments, investing in advertising and
marketing initiatives must be a top priority for any successful company. Leveraging established
brand reputation alongside current distribution channels will help Kraft Heinz promote new
products with optimum exposure, efficiency and effectiveness - this ensures the maximum
growth potential whilst driving profit margins forward over time through enhanced accessibility

Recommendation

Alternatives identified vs Recommendation-Shuo

 The corporate landscape is currently constantly evolving. Consumer product (CP) organizations

must frequently be capable of rapidly reinventing, adjusting, and differentiating market identities to

foster brand recognition. Although numerous CP players try to use tried-and-true differentiation pedals

like international and regional integration through mergers and acquisitions (M&A), steadily increasing

automation, and innovative thinking, they are also coming up with refreshed, more daring plans for how

to use these tools in the context of a more secure US and globalized trade (Deloitte Center for Industry

Insights, 2018). The tactics Kraft Heinz might employ to differentiate in the CP market and how it could

be accomplished will be discussed below.

M&A is an innate avenue to digitalization and globalization (Deloitte Center for Industry

Insights 9). Based on Chapter 5 on long-term objectives, shareholders constantly demand businesses to

keep growing their gross margin revenues, bottom quarter net earnings, and dividend payouts.

Businesses frequently must choose between building, borrowing, or buying to achieve this goal. Building

involves domestic expansion; borrowing involves external expansion through collaborations, joint

ventures, affiliations, and purchasing, ultimately involving mergers and acquisitions. This tactic allows

Kraft Heinz to set itself apart from its rivals. To increase its product line, obtain intellectual property (IP),

and build client bases in other regions, Kraft Heinz will be able to buy smaller companies in the CP space

which would offer Kraft Heinz the chance to broaden its market, acquire technological advances, and

increase its client base, which in turn would help the business differentiate out from its competitors. An

illustration of an alliance at work is the Kraft Heinz Foundation Board of Directors acknowledged Heifer

International's lengthy and game-changing framework as the ideal augment to its objective of self-

sustaining starvation remedy (Kraft Heinz 2021, p. 31). As a result, enlisted "Business alliances such as

this one will empower them to integrate more individuals needing assistance to fresh, nutritious food,

whereas strengthening food systems that ensure the long-term provision and an increasingly equal and

fair prospect for production companies."

 Many organizations are impacted by digital innovations and tools in various ways, from

logistics and purchases to consumer interaction. Nonetheless, some businesses progressively integrate

their digital strategy into their entire corporate structure. According to Medinskaia ( 2020, p. 72), a

customer's perspective and preference for the goods may be altered when purchasing the items in

person instead of online. The ambience of the store, the company of other shoppers, the range of

available products, and the facts surrounding the purchase all impact how consumers perceive and

behave. Therefore, considering these aspects through employing this approach, Kraft Heinz can position

itself against its opponents by utilizing digital tools to boost their advertising and promotional skills,

increase client involvement, and offer a tailored customer shopping encounter. Nevertheless, Kraft

Heinz also needs to be mindful of the online food component, which is regularly employed by customers

who tend to purchase electronically. Consumers who exhibit this conduct are said to be regular

members of digital platforms by Lok (2017, p. 25). The electronic grocery, often known as an e-grocery

or even more popularly "online grocery," is the outcome of the digitalization of the food service sector.

According to Ze, Abbas, Hussain, & Jiao (2018, p. 12), being responsive to novel ideas and

suggestions from others is one of the qualities associates should possess to increase trust. Kraft Heinz

has been working cooperatively to create cutting-edge plant-derived sweetener package technology to

reduce artificial sweeteners in Kraft Heinz items by approximately 50% (Kraft Heinz, 2021, p. 37). Though

consumer product businesses have always been pioneers in communicating with customers through

conventional market experimental procedures, many corporations are now soliciting innovators and

typical clients to pitch ideas through virtual forums like NineSights.com, Indiegogo.com, and eYeka

(Deloitte Center for Industry Insights 2018, p. 7). Such websites link large and small firms with unique

talents and creative individuals intending to utilize their innovative thinking.

Corporations invest time and resources into innovation and adopting global developments that

impact customer inclinations, the packaging sector, and enterprises across all industries. If Kraft Heinz's
packaging design is creatively distinguishable, this would bring new market patterns stimulating

consumer attention and can separate a new arrival in the marketplace of Fast-Moving Consumer Goods

(FMCG) and drive purchasing decisions. Nonetheless, efficient packing can be developed for

comparatively minimal cost and help an organization since it is preferable to costly advertising

(Medinskaia 2020, p. 17). For Kraft Heinz, offering online food services could be a great approach, as

recommended, as a differential delivering innovation strategy like a multi-channel delivery service (Lok

2017, p. 74). Kraft Heinz might employ an inventive thinking approach to packaging and delivery as a

means of establishing itself beyond its opponents.

In conclusion, by utilizing M&A, digital techniques, and creative thinking, Kraft Heinz can stand

out in the CP market. Additionally, by incorporating digital technologies into its corporate structure,

Kraft Heinz may improve its advertising and promotional abilities, promote consumer interaction, and

provide a customized shopping experience for customers. Furthermore, Kraft Heinz may differentiate

itself from its competitors by using creative packaging ideas and deliveries through innovative thinking.

However, the internet food component is an aspect that Kraft Heinz should be cautious of because it is

heavily regulated.
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