Bargaining power of suppliers The food and beverage industry is truly towering and aggressive when it comes to the pricing part. Manufacturers of such products usually keep the prices of their products very competitive. The suppliers of these kinds of products don’t have much of a say in the pricing matters. The bargaining power of buyers The buyers have an inclination to buy good quality products at cheaper prices. As such, they don’t mind changing the suppliers and buying from the one that offers good quality at better prices. In other words, buyers want best value for their money. There is a noteworthy chance for the purchasers to concentrate on the industry and its firm benefits. The threat of the entry of new competitors The increasing world population and the consequent increase in demand of various commodities, has led to more and more manufacturing companies joining the fray. The current situation of markets can be put as being saturated where there is no place for any new companies. Companies that have already been in the market for the past couple of years and have established customer bases have a stronghold of the market and it is very difficult for the new entrants to make a mark. Unfortunately, Kraft has till late neglected some of its brands and has failed to create a proper brand image for such products. This might be benefitting to the local or generic brands. “If Kraft is to generate solid long-term growth the company must re-engage with consumers, addressing the issues surrounding its typically under-invested brands” (Askew 15). Rivalry among established competitions Likewise other industries, there is severe competition in the food and beverage industry as well. It has become very difficult for companies to survive and maintain their respective market share. Two things that are crucial for survival in the competitive markets are brand loyalty and variegation. The products of such companies have a flexible marketing policy; quality and prices of the products are of utmost importance. Customers have become very smart and they don’t think twice to switch suppliers based on better quality and better price. So companies have to be very vigilant and careful while deciding the price structure of their quality products. It has also been observed that companies having branded products in the markets often team up to stop the local suppliers from usurping their market share. They create such hype about their branded products that people don’t care for the local products. The branded products are portrayed to be far superior to the local products in value and grace. As far as Kraft Foods is concerned, the company has been in the pursuit of excellence in the food and beverage industry. Even though the company is experiencing increased costs of production, slow top-line augmentation, and incessant growth in the pension payments, it is trying hard to increase its production and the profit margin. Like for example, the cost of production of Kraft Foods (North America) for the year 2010 was 12.3% and that of Kraft Foods Group for the year 2012 was 8.7%. It is notable that the best performance shown by industries in this class was ~8% (Kraft Foods Group 2013). Some of the main competitors of Kraft Foods are J & J Snack Foods, Kellogg Company, Conagra Foods, H. J. Heinz Company, and PepsiCo. The threa