Kraft Foods Inc Strategic Planning and Management

Organizational Background- In 21st century business culture, strategic planning is one of the more important requirements for any organization. Modern organization are so highly complex and vastly competitive that the old template of improving efficiency and the bottom line is no longer all it takes to be successful. Instead, continued reinvention of both the companys product line and industry capabilities is not only necessary, but will help decide which companies succeed and which fail (Porter, 1998). Kraft Foods is an example of a complex and innovative company. It is the largest branded food and beverage company in North America and the second largest globally. It operates in over 150 countries worldwide with a number of the worlds preferred food brands. Kraft holds more than 35 major brands with over a century of successful sales: Oscar Mayer, Maxwell House, Jell-O, and Velveeta. In 2011 the company posted revenues of over $54 billion and continues to employee over 125,000 peopl e worldwide (www.kraftfoodsgroup.com). Tangible Resources - Resources, of course, are both physical and human. Resource based strategic management emphasizes what the organization can bring to the marketplace based on their particular level of expertise building great computers, having a unique product, etc. The strategic model of resource based planning is an ongoing process that is continuously looking at ways in which the company can find better solutions to issues of efficiency and useShow MoreRelatedSmart Cookie : Global Expansion Essay1613 Words   |  7 Pagesgoods or rather products most likely unheard of/not familiar only operating in America or their domestic countries (Siegert, 2011). The objective of this report is utilizing the SWOT analysis to determine quickly the international markets that Kraft Foods need to enter and venture and also ways of developing strategies for the new products. One of the most influential and powerful weapons of a corporation has in the globe to get into global markets in their r espective reputation. Apparently, moneyRead MoreMgt599 Module 1 Case Assignment Essays1694 Words   |  7 PagesKraft Foods Group, Inc. Mission, Vision, Values and Goals Course Number: MGT599 Trident University Dr. Nanette Scarpellini Metz April 22, 2013 Abstract Kraft Foods Group, Inc. has a mission and vision statement that accurately reflects the strategic business plan and encompasses their brand. These statements have been effectively written to be mutually supporting and provide the roadmap for continued success. Based upon Kraft’s mission and vision statement, the company has developedRead MoreKraft Foods Group Inc.1392 Words   |  6 Pages‘ Kraft foods group Inc. is an equal employment employer and is committed to providing employment opportunities to minorities, females, veterans, and disabled individuals. As an equal opportunity employer, Kraft foods are committed to a diverse and inclusive workforce’ (Kraft Foods Group Inc. 2012). The human resource department of Kraft foods has this strong statement which provides a clear and distinctive image of what the company has to offer. This highlights Kraft’s foods differences in comparisonRead MoreMgt599 Module 1 Case Assignment Kraft Essay2708 Words   |   11 PagesRunning Head: KRAFT FOODS Kraft Foods MGT 599 Module 1 Case Assignment Abstract Kraft Foods established in 1903 has been in existence for over a century and is a household name. Its a company that when spoken of a thought of Mac-n-Cheese or dairy products come to mind but it is so much more. This organization has progressed dramatically over the years buying over other companies, improving existing brands, and introducing new product lines. Today, Kraft Food products include beveragesRead MoreKraft Foods and Corporate Social Responsibility2746 Words   |  11 PagesIndividual Assignment: Kraft Foods and CSR. 2012 Global Challenges Table of Contents Table of Contents 1 1.0 Introduction 2 2.0 Application 3 2.1 Kraft Foods Inc. 3 2.2 PESTEL Analysis 3 2.3 SWOT Analysis 5 2.4 Porters Five Forces 5 2.5 Management at Kraft Foods Inc. 6 3.0 Corporate Social Responsibility 6 3.1 Impact of CSR on Kraft Foods Inc 6 4.0 Conclusion 7 5.0 Recommendations 7 6.0 References 8 1.0 Introduction Management is a term that is usedRead MoreKraft Food Case Study2619 Words   |  11 Pagesstrategies. Kraft Foods Vision Statement †¢ â€Å"Helping People Around the World Eat and Live Better. †¢ â€Å"Make Today Delicious†    The following core values guide Kraft Foods actions as they strive to achieve the mission and vision : -We inspire trust -We act like owners -We keep it simple -We are open and inclusive -We tell it like it is -We lead from the head and the heart -We discuss. We decide. We deliver Step 2: Develop vision and mission statements for the organization. Kraft Foods VisionRead MoreProcessed Cheese and Kraft Foods30876 Words   |  124 PagesKraft Foods 2011 TABLE OF CONTENTS Executive summary(KH) 6 Indroduction(ME) 7 Background/ History of Kraft (ME) 7 Mission Statement(ME) 8 Major Goals(ME) 12 Business(ME) 12 Corporate and Environmental Philosophy(ME) 12 Mission Statement Analysis(ME) 13 Strategic Evolution(KH) 13 Intended Strategies(KH) 14 Emergent Strategies(KH) 16 Stakeholders(CB) 20 Internal(CB) 20 External(CB) 22 Kraft’s Organization and Structure (YL) 23 Purpose of the Report(KH) 26 ExternalRead MoreKraft Case Study7611 Words   |  31 Pages1.0 CASE ABSTRACT In January 1995, Kraft General Foods became Kraft Foods, Inc. and was reorganized into a single operating company. Kraft Foods continues to grow and change to meet changing consumer needs, in part by building on its history — the legacy of its well-known brands, the character of its founders and the dedication of its employees. The company has continued to build on the innovative spirit of its past, with new products such as low-fat and fat-free products in a variety of categoriesRead MoreOreo and Pt Danone Biscuit15809 Words   |  64 PagesANALYZING AND MANAGING FOREIGN MODES OF ENTRY FOR FOOD INDUSTRY (BISCUIT) Oleh : Kelompok 5 Margaretha Pink Berlianto (19090054) Diana Permana (19090062) PROGRAM STUDI MASTER OF MANAGEMENT UNIVERSITAS PELITA HARAPAN JAKARTA 2010 DAFTAR FOREIGN DIRECT INVESTMENT DALAM BIDANG FOOD INDUSTRY (BISCUIT) DI INDONESIA 1. PT Kraft Foods Indonesia. 2. PT Arnott’s Indonesia. 3. PT Ceres Meiji Indotama. DAFTAR IMPORTIR DAN DISTRIBUTOR DALAM BIDANG FOOD INDUSTRY (BISCUIT) DI INDONESIA : 1. PT PandurasaRead MoreOscar Mayer Case Study5146 Words   |  21 PagesOSCAR MAYER: STRATEGIC MARKETING PLANNING 1. COMPANY PROFILE:- Oscar Mayer Foods Corp. is the maker of one of the most venerable and successful food brands currently available on supermarket shelves. The companys sliced meats and other products are sold across North America and in parts of South America and Asia. Oscar Mayers product line includes a wide range of popular meats, including hot dogs, bacon, and pre-packaged lunch combinations. In the early 1990s, the company also tried its hand

Activity Based Costing Harvard Business Press

Question: Discuss about theActivity Based Costing for Harvard Business Press. Answer: Introduction There are many ways to find out the cost drivers and various activities that associated with the production of products in the organization. In activity based costing there are certain steps that need to follow while estimating the cost drivers and activities associated with them (Kaplan, Steven and Anderson, 2013). In the case of Browns Bakery Mr. Knight has to first evaluate the various costs that took up in the mixing department. These costs are wages, building cost, depreciation, consumables, energy and other indirect cost. As all these costs have been identified it is easy locate the cost driver for each cost. In is explained below: Wages are paid to labor therefore this percentage of labor time will be appropriate cost driver for division of cost in each activity. Consumables are used in each activity and it is divided according to the labor time used in each activity. The indirect cost that is left over will be allocated in each activity as per labor time as no other cost driver can be applied. Building cost is related to floor area occupied by each activity in mixing department, so this cost divided on basis of floor area occupied by each activity in the mixing department. Depreciation and energy is related to use of machine and machine is only used in operate mixers activity of mixing department, therefore whole cost of depreciation and energy is allocated to operate mixers activity directly (Goektuerk, 2007). Following steps must be taken by the Knight to ensure that information is reliable: Knight must collect information on various costs that are incurred in the mixing department so that value of each cost can be calculated. After identification of each cost, Knight must make efforts to find out the different activities that have been taken place in the mixing department. It can be assured by asking by the department manager of mixing department (Kaplan, Steven and Anderson, 2013). Identification of cost driver is the most important task and in order to ensure it is reliable Knight have to check applicability of each cost according to the resources they used. For example, wages cost used labor resources therefore wages cost must be allocates through use of labor time by each activity. Lastly to ensure that whole cost have been allocated, Knight must ensure that overall profit in activity based costing and tradition costing are same. In activity based costing method, all indirect costs are allocated according to the activity used in processing of each product. Apart from indirect cost there are some direct costs like material used and labor cost that have also to be allocated in the product cost to drive at the product cost in each case. Actually direct cost is based on any activity as it is simply put for use for each product process and various activity are performed on it to make it a finished product (Kaplan, Steven and Anderson, 2013). While drawing the cost pool for allocation of cost in the various activities direct material cost are leftover and it is essential to add them while estimating the whole cost of the product. Direct labor cost is also a part of product cost and it also not taken in cost pool as it is divided directly into product while estimating total product cost. The main reason for division of labor cost directly in statement of product cost is because they are associated to products and th ey are involved in all the activities. In case of Browns Bakery various activities have been found and costs associated to activities are divided as per activity driver of that activity. Certainly some costs like direct material and direct labor are not listed in the list of activities and these must be added while estimating the cost of Meat pie and Vegetarian Quiche. Activity based costing system is more accurate cost division system and it helps to allocate the various indirect cost more precisely into the products according to the different activities used by them. In case if product A consume more resources as compare to product B than certainly the cost of product A will be more as compare to cost of product B. In activity based costing the all the indirect cost are first identified and their cost drivers are assigned according to the resources they have used. While in case of conventional costing system or traditional costing system all the indirect cost are taken all together and divided using the most appropriate cost driver like labor hour or machine hour (Goektuerk, 2007). Therefore activities that have not been used in the particular product have been allocated the part of that activity cost. So, conventional costing system does not support appropriate allocation of cost. In this costing system cost of product A can be lower than produc t B but in actual it is totally opposite. This led to misappropriation of profit in each product and provides wrong information of the costing of products. In case of Browns Bakery the cost of Vegetarian Quiche is certainly more because it has used more resources than meat pie and in activity based costing system costs have been divided as per the resources used by each activity. In tradition costing system all indirect cost are divided on the basis of one cost driver. Activity-based costing (ABC) is a costing method that is used for allocating the overhead costs to each activity of an organization in a more logical manner as compared to the traditional approach of assigning costs to the products. The method identifies all the activities of an organization and then assigns indirect costs to products. Thus, ABC system can be regarded as an approach of establishing the relationship between costs, activities and products. The indirect costs such as office staff salaries is rather difficult to identify attributed to each of the product with the traditional method of cost accounting (Goektuerk, 2007). Thus, activity-based accounting is used as a technique for aligning the indirect costs related with manufacturing of products. The approach to costing is most commonly used in the manufacturing sector as it helps in gaining the actual costs incurred by an organization in its manufacturing process. It also facilitates organizations to develop much better co rporate strategies by recognizing the costs in advance. Advantages: ABC system provides more realistic information about product costs as it places more emphasis on its cause in context of manufacturing goods It helps organizations to identify and implement effective strategies for controlling their overhead costs ABC technique also provides sufficient information regarding the profits realized from its various product lines ABC approach facilitates organizations to determine the selling prices of the products as overheads are allocated on the basis of cost drivers Limitations: The major limitation of this approach exist in the difficulty of identifying the various activities in an organization that impacts costs The evaluation of cost on the basis of activities is also very difficult The method is not effective for identifying overhead costs related with small manufacturing of products So it can be concluded that activity based costing system take into account all the indirect cost as per the resources used by the products while traditional costing approach misses this division of cost. But in ABC costing system it is very difficult to locate the different activities and misidentification of activities will lead to wrong allocation of indirect cost. References Goektuerk, H. 2007. Activity-Based Costing (ABC) - Advantages and Disadvantages. GRIN Verlag. Kaplan, R., Steven, R. and Anderson, R. 2013. Time-Driven Activity-Based Costing: A Simpler and More Powerful Path to Higher Profits. Harvard Business Press.