strategic-management

186 KRISTOPHER J. BLANCHARD
EXHIBIT 2 Kraft’s Sales by Segment/Percent
For the Years Ended December 31
2008 2007 2006
(2007 & 2006 restated)
Kraft North America:
U.S. Beverages 8.50% 7.60% 4.70%
U.S. Cheese 14.30% 9.60% 15.20%
U.S. Convenient Meals 9.10% 9.30% 9.50%
U.S. Grocery 23.00% 24.30% 28.80%
U.S. Snacks 12.20% 14.50% 10.20%
Canada & N.A. Foodservice 10.00% 9.70% 9.80%
Kraft International:
European Union 9.50% 13.60% 12.60%
Developing Markets 13.40% 11.40% 9.20%
Total Kraft Segment Operating 100.00% 100.00% 100.00%
Source: www.kraftfoodscompany.com. and Company Form 10K.
Operating Segments
Kraft Foods Inc. manages over 100 different brand-name food products and tracks operating
income to five specific consumer segments. Exhibit 2 provides a summary of the Kraft
Brands and operating segments.
• Snacks—primarily biscuits (cookies and crackers), salted snacks, and chocolate confectionery
• Beverages—primarily coffee, packaged juice drinks, and powdered beverages
• Cheese—primarily natural, process, and cream cheeses
• Grocery—primarily spoonable and pourable dressings, condiments, and desserts
• Convenient Meals—primarily frozen pizza, packaged dinners, lunch combinations,
and processed meats
Exhibit 2 provides a percentage breakdown of the segment sales for the U.S. and international
operations. Note that U.S. Grocery comprises the largest segment followed by U.S.
Cheese.
According to the Neilson Company, Kraft Foods only lost 0.3 percent market share
during 2008 despite a 9.8 percent increase in pricing.
Marketing
The reintroduction of Kraft Foods Inc. in February 2009 was accompanied by the launch
of a new corporate Web site: http://www.newkraft.com. Visitors at the site can view commercials
from around the world while learning about new product innovations. Kraft
Foods Inc. has also launched several Web sites that would be considered viral in nature.
One of these is the Oreo Double Stuf Racing League (DSRL) site: http://www.dsrl.com;
visitors can watch videos, play games, and of course they can join the league.
Even the main Web site for Kraft Foods Inc. has undergone a facelift. The new site
address is http://www.kraftfoods.com. In its review of the site, brandchannel.com said the
following:
The site is well conceived as a portal for an audience that might access the Internet
through a dial-up modem. Staying away from roll-over images, the HTML-based home
page is efficient, using fairly compact pictures—except for a promotional 180 × 150
banner that flirts with a surprisingly high 30K. Surfing through the site, the visitor will
enjoy the same consistent experience. Besides recipes, noteworthy features include
Product Info and a Recipe Box. If the former is self-explanatory, the latter is a smart