Business Strategies: Nike and Kraft

Business Strategies: Nike and Kraft

Introduction

Every organization tend to face a stage in it lifetime when the growth of its product or services slows down but it has enough liquid cash to undertake activities and explore opportunities in the form of diversification of its products of expansion of its business. This complicated and challenging cycle of combining two different businesses in the form of acquisition or mergers is a synergistic activity which is often undertaken by the businesses with different motives like increasing shareholder value or profitability. At time some organizations need to get rid off or spin off some products or parts of its business that are proving to be a loss or not contributing towards the growth and development of organization. This process of shedding off the parts of a business is done through divestment strategy. Majority of the market in real life situation are dynamic and facing constant change which can be the result of globalization, change in external factors like R&D or advancement of technology, change in competitor's business or marketing strategy, political, legal etc. therefore, every business has to at some point in time take up diversification or divestment as a part of its marketing and business strategy in order to remain competitive and successful in the long run. This report aims to discuss the business strategies like merger & acquisition or divestment by the two business giants namely Nike and Kraft Foods. Additionally there will be a discussion of the opportunities that both businesses will try to explore in the years to come.

Discussion

Part 1

Kraft

Kraft is among the leading and largest company distributing and selling food and beverages in Unites States. Currently, the company is operating in 70 different countries with all over the world. It has around 98000 employee that work for it represent its brand in different regions and distribute it 150 countries in the region of America, Europe, Latin America, Asia pacific and middle east and Africa with the help of different affiliate companies, subsidiaries and distribution channels by the name of Kraft Foods International and Kraft Foods North America (Lutz, 2006, pp. 3; Strategic Analysis of Crafts Food).

Its product line includes manufacturing and selling of packages retail food products like coffee, cookie, confectionary, juices, beverages (powdered form), cheese, cereals, ready to cook meals, meats (processed) etc. with the help of such vast array of products it is offering products in categories like snacks, beverages, cheese, grocery and convenient meals under its brand of Kraft which is directly related to catering to consumer sector. The industry in which Kraft is operating consist of other competitors like Jacob's, Philadelphia, Maxwell house etc. majority of the of the companies in this sector are involved in activities like buying the raw material, harvesting it till it is ready for retail purchase. It is a long process and involves stages like raw food processing, manufacturing, packaging and distributing in the end (Strategic Analysis of Kraft Foods). Such product can be fresh, ready to cook, ...