<p align="justify">Kraft Foods Inc. is a US based group of companies which manufactures processed food and beverages in US and Canada and has a market outreach all over the world. The product range includes snacks, beverages, cheese, convenient meals and various grocery packages. (External Analysis For Kraft Foods, 2011.</p>
<p align="justify">It is the second largest food and beverage company after Nestle which is operational in 155 countries across the world. Kraft Foods North America, Kraft Foods Europe and Kraft Foods Developing Markets are the main segments of the company. Its brand portfolio is quite diversified including renowned names like Oreo, Nabisco, Cadbury chocolates, LU Biscuits, Oscar Meyer Meats etc. (External Analysis For Kraft Foods, 2011) The company is now headquartered in Pittsburgh and Chicago. (Key, 2015)
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<h2 align="justify">Competition in the Industry</h2>
<p align="justify">The company plays against tough competitors like McCormick &; Company, Hain Celestial Group, Mondelēz, Keurig Green Mountain, ConAgra Foods, Nestlé SA and others. In 2015, the food and beverage industry reached the worth of $2.1 dollars. In a fast growing industry where the rivalry is intense, the company relies on product differentiation and brand loyalty. (External Analysis For Kraft Foods, 2011)</p>
<p align="justify">The switching costs are low therefore the company aims to provide quality at affordable prices to maintain its market share. ; Hence there is some cooperation among the renowned labels to threaten the market share of private labels. So while endorsing their brand image they tend to provide hints to the customers that brand name is preferable to private label. In order to increase its profitability, there have been restructurings in Kraft Foods Inc. despite the increase in input costs. (External Analysis For Kraft Foods, 2011)
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<h2 align="justify">Potential of New Entrants into the Industry</h2>
<p align="justify">Although there are strict government policies on the food and beverage industries, the threat of entrants is still low. Because the investment cost is still exceptionally high and the new entrants will need the best distributors and strong brand equity to survive the competition. </p>
<p align="justify">As Kraft along with its competitors have stronger grasp on the geographic front of the market, the new companies are not likely to survive in the long run. Kraft has an advantage of positioning, established brand image and quality over new entrants. (External Analysis For Kraft Foods, 2011)</p>
<h2 align="justify">Power of Suppliers</h2>
<p align="justify">The raw materials for the food and beverage industry are surplus. Kraft faces no pressure from its suppliers as there are a number of substitute inputs present. But the suppliers are certainly under pressure of Kraft because of its volume purchase. (Key, 2015)
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<h2 align="justify">Power of Buyers</h2>
<p align="justify">The power of buyers is moderate over the company because the buyers change preferences very soon and they look for quality goods for affordable prices. Walmart has been a champion of such customers for a long time. It provides the buyers a perfect opportunity to extract profits. Here the power of the customer is high. (External Analysis For Kraft Foods, 2011)</p>
<p align="justify">However there are buyers who would not compromise on the quality and would want to associate themselves with the brand’s name. In this scenario, the bargaining power of buyers is less. (External Analysis For Kraft Foods, 2011)</p>
<h2 align="justify">Threat of Substitute Products</h2>
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The threat of substitutes is low to medium. Low quality products may not attract the customers to switch form Kraft Foods Inc. In that regard the threat is minimum. (Key, 2015)</p>
<p align="justify">However, private labels with more affordable prices are a serious threat to the firm. (External Analysis For Kraft Foods, 2011) The consumers who would go for less prices might be willing to compromise on the quality. In this scenario, Kraft needs to make sure that they provide quality product within affordable range so as not to lose its customers to its competition. 
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<h2 align="justify">Conclusion</h2>
<p align="justify">Kraft Foods Inc. needs to invest in the strategies that helps in regaining and maintaining their strength. It is essential for them that their brand image is always associated with good quality food products. After merging with private company called H.J. Heinz in 2015, Kraft not only increased its revenues but it helped in bringing back Heinz into the market. In order to keep its fair share of the market, Kraft needs to invest in strategic vison on innovation. (Key, 2015)
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<h2 align="justify">Bibliography</h2>
<p align="left">• External Analysis For Kraft Foods. (2011, June). Retrieved from <a href="https://docs.google.com/document/d/19liGjGKT76-tSjr_lz1M47bLd99BDFBJlSvHv5BYhzw/preview">https://docs.google.com/document/d/19liGjGKT76-tSjr_lz1M47bLd99BDFBJlSvHv5BYhzw/preview</a><br />
• Key, D. (2015, December 30). Reintroducing Kraft Heinz: The Ultimate 2016 User&#8217;s Guide. Retrieved from Market Realist: <a href="http://marketrealist.com/2015/12/every-investor-needs-know-kraft-heinz-series-overview/">http://marketrealist.com/2015/12/every-investor-needs-know-kraft-heinz-series-overview/</a></p>
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