Kraft Foods Coffee Pods Case Analysis

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KRAFT FOODS COFFEE PODS PAPER ID: 001708049 I. Situation Analysis Over the course of a hundred years, Kraft foods has evolved from a cheese manufacturer into a multi-billion dollar food and beverage company, including fifty $100-million brands and five $1-billion brands, established in over 155 countries around the world. Their five operation objectives include: building superior brand value, enhancing product demand, aligning product portfolios with consumer trends, increasing international business, and building savings for reinvestment in brand building. Kraft Foods has a strong brand portfolio, an effective distribution network, and a reputation for developing original new products. One of these innovative new products is the Single Serve Coffee Pod (SSP), a machine that can brew one cup of coffee at a time. The pod was first conceived in 1978 in Italy, and was originally targeted at office users. Kraft redesigned the pod and retargeted it to home users in Switzerland in 1982. By 2003, the pod had been introduced to 10 European countries, and coffee pods were about 15% of all coffee makers sold. By 2008, European SSP sales were expected to exceed $150 million, and by 2010, they would draw for 10% of European home coffee maker market. Now, Kraft is ready to introduce the pod to North America, a debut that is expected to bring in BILLIONS. Kraft Foods controlled 15% of the global coffee market in 2004. Kraft’s own coffee brands, Maxwell House and Nabob, owned a combined 32% share of the Canadian market. Their main competitor in Europe was Senseo, who introduced their pods in 2001, selling five million coffee makers and three billion pods by 2004. The German company, Melitta, has already introduced a six-flavor Javapod sampler across Canada, and Home Café has plans to release their pod in September of 2004. With more competitors rallying, a race is on to

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