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Case Study: Kraft

The appearance of Vegemite took place in 1922, when Fred Walker, the founder of a Cheese company, developed this product using the brewer’s yeast. The name “Vegemite” was given first and it still exists. In 1926 Fred Walker and Kraft Cheese company established a partnership. After Walker’s death, Kraft became the only owner of the company and the brand. Between 1928 and 1935 the product was renamed twice – into another name and then back. From 1939 this product has been associated with a fast morning meal for different consumers, and with the help of successful advertisement campaign and endorsement it has been one of the most top positioned among others of its kind (80%). During the 1st World War this product went to support Australian military forces. In 1956 this product was associated with happy people because after the war people felt optimism and sales were booming. In 1970-80 when it was a boom of birthrate Kraft started orienting at children and mums with bright adverts. Then they used endorsement with stars and nowadays they are focused on the net usage. It was not until 2002 when fluctuations started. It can be partly explained by product life cycle and partly by unsuccessful advertisement name.

Internal environment in the company is very positive and employees are closely connected with each other because of long history and the same mission. This situation is backed up also by the fact that the company has had the only owner and was built in the team long time ago. The minus of such environment is that all employees are homogeneous without unique ideas.

Looking at outer forces, it is possible to say that the main force is a group of customers and their buying power. As far as suppliers are concerned, it is possible to say that brewer’s yeast is not unique and rare raw material. Newcomers and substitutes in Australia and New Zealand can not be a big threat. If we discuss other countries then it can be more problematic.

Looking at sales figures it is possible to say that this product has got four stages: introduction, growth, maturity and decline. From 1923 to 1946 Kraft was introducing this product to the public. It was quite tough and not very optimistic. From 1946 to 1983 it is possible to see a period of the growth. From 1983 to 2000 it is vivid mature stage. From 2000 it is possible to see fluctuations. This can lead to a complete loss of the market if the product is not changed.

Using SWOT analysis, one can describe this brand. Strengths of this brand are the following: good reputation in Australia and New Zealand, bright eye-catching advertisements, almost no competition, top position. Weaknesses are the following: it is almost a domestic product, associations with the brand are sometimes negative. Certainly, having good development of the product and changing the name Kraft can try to introduce the product to another country where such snacks are quite popular. It will be an opportunity. More than that, nowadays they have very a shaky position in the domestic market and it can be a big threat.

To avoid a fall, it is necessary to develop business level strategy. This strategy is clearly seen from the whole history of the company. It is focused on customer demands and needs. Kraft reacts at changes very quickly. Business level strategy is a market focused policy and continuously developing.

Corporate strategy must be focused on research and development of the product. There must be a medical department. Representatives of such medical department must be included in corporate structural level. Corporate structure must be flat.

Taking into account previously discussed questions, it is possible to give some recommendations. Talbot has to analyze opportunities to work in other countries. To save the situation, a new name has to be introduced. The name has to sound more international. Design and technological characteristics must be updated. In social and marketing researches it is recommended to use 360-degree assessment in this way so that it would be possible to see and analyze all stakeholders.