Porter’s five force Analysis of Kraft Heinz Company

How the Kraft Heinz Company can build a sustainable competitive advantage in food porter five focuses on this that faces major diversity industry. To develop the strategic position within the food the managers at Kraft Heinz Company cannot only use porter’s five forces.

Threats of new entrants of Kraft Heinz Company

On the food and beverages industries there are strict policies of government. So the threats of entrants are still very low. Still the exceptional investment cost is high along with the good distributors are needed by the new entrants and to survive the competition of the strong brand equity. Along with the competitors Kraft Heinz Company have great grasp on the geographic front of the market, in the long run the new companies are not likely to survive. Positioning, development of brand image as well as quality is the advantages of Kraft Heinz Company. The Kraft Heinz Company face pressure at that time when the competitors apply the strategy by lowering the price of the product with the same quality as well as make image on the mind of the customer (Fern Fort University, 2018)

Rivalry among the existing competitors of Kraft Heinz Company

Intense rivalries among the competitors result in low prices and reduced profitability. Kraft Heinz Company is located in highly diversified food industry. If there is a rivalry competition between Kraft Heinz Company and another it can has great impact on reduced profitability of the company. The company has great power in market due to its innovative strategies and diversification. But still the risk of increased competitors in market is high (Fern Fort University, 2018)

Bargaining power of Buyers of Kraft Heinz Company

The people have great power and increased demands. Buyers want to but available food products of Kraft Heinz Company in lower prices. This power of buyers can put a lot of pressure on the company resulting in reduced chance of profitability. The customer of the Kraft Heinz Company is powerful if it has smaller customer base which gives them great power to bargain so they get developed ability to demand discounts and offers. This can be changed by establishing greater customer base (Key, 2015)

Bargaining power of Suppliers of Kraft Heinz Company

Every company needs a supplier of raw material in order to produce its products. The suppliers who are well known and have a dominant position in market can decrease the profit which Kraft Heinz Company can earn. The dominant suppliers have great power over the market and success of its company. Powerful suppliers are capable of negotiation and reduce the higher prices of the food company. In conclusion, great bargaining power of suppliers has great impact over lowering the profitability of the firm (Key, 2015)

Threat of substitutes of Kraft Heinz Company

Threat of substitute is medium for Kraft Heinz Company. The firm is located in diversified market driven with new and competitive firms. The value of the product and profitability of company suffers when a product meets the need of customers in lower price. For example, storage hard drives and their use suffer due to new storage Medias like Google drive and Dropbox. This threat can escalate if the new substitute offers more diversity and customer satisfaction from the present offering of Kraft Heinz (Jurevicius, 2013)

Recommendation # 01 of Kraft Heinz Company

The Kraft Heinz Company can deal with the existing competitors in food market by establishing a sustainable difference, by having a scale in order to have a better competition and to take calculated risks. It can also be reduced through healthy collaborations with collaborators to double the market size instead of having a competition in small size market (Larsen, 2015)

Recommendation # 02 of Kraft Heinz Company

The company can tackle the bargaining power of powers by growing the customer base from small to big. This will provide opportunities of increased sale and greater productivity. As buyers demand discount on already existing products so Kraft Heinz Company should continuously come up with new products as these cannot be available on low price and the same price is sustained and there will no effect of profitability of the firm.

Recommendation # 03 of Kraft Heinz Company

Another recommendation is efficient and continuous production of new products. It attracts the customers as well as gives another reason to old customers to build long term relation with Kraft Heinz Company. Scale of measurement should be used so the price can be lowered per unit. The firm should invest on research and development as it opens doors for innovation and creativity which in turn provides great satisfaction and fulfill the demands of the buyers (KRAFT HEINZ, 2017)

References of Kraft Heinz Company

Fern Fort University. (2018). The Kraft Heinz Company Porter Five Forces Analysis. Retrieved November 29, 2018, from http://fernfortuniversity.com/term-papers/porter5/analysis/706-the-kraft-heinz-company.php

Jurevicius, O. (2013). Porter's Five Forces. Retrieved November 29, 2018, from https://www.strategicmanagementinsight.com/tools/porters-five-forces.html

Key, D. (2015). A Key Analysis of the Kraft-Heinz Merger. Retrieved November 29, 2018, from https://marketrealist.com/2015/12/key-analysis-kraft-heinz-merger

KRAFT HEINZ. (2017). GROWING A BETTER WORLD AT KRAFT HEINZ. Retrieved November 29, 2018, from http://www.kraftheinzcompany.com/pdf/KHC_CSR_2017_Overview.pdf

Larsen, K. (2015). The sustainability challenge of the Kraft-Heinz merger. Retrieved November 29, 2018, from https://www.greenbiz.com/article/what-does-kraft-heinz-merger-mean-sustainability