Introduction Kraft Foods Group is an American company based in Northfield, Illinois. It is a grocery manufacturing company, as well as a processing conglomerate. The company deals in a variety of food, snacks and beverages. Kraft Foods Group is a public company that is listed on NASDAQ. It is one of the largest food companies in America. The purpose of this essay is to carry out an external analysis of the company. This will be done by conducting an analysis of Porter’s Five Forces and then a PEST analysis. A critical analysis of these two will lead to formulation of the company’s threats and opportunities. Porter’s Five Forces Analysis Threat of entry of new competitors The food industry is usually very competitive. Very many companies are involved in this industry across the world. The companies in the industry today have invested heavily in brand building (QuickMBA, 2007). This makes it difficult for any new company to come in and threaten their existence. As a result, there are very few chances of new entrants in the industry. Therefore, Kraft Foods Group does not face a lot of threat from new entrants or competitors. Rivalry among existing companies As mentioned earlier, there is a lot of competition in the food industry. The competition in this industry is international. Therefore, Kraft Foods Group faces competition from many companies from all over the world. One of the sure strategies that the companies execute to win their customers is brand building. Every company wants to create the impression that their brand is the best. Food companies strive to produce high quality. The competition is even made worse by the fact that customers have a variety of brands to choose from. Therefore, switching brands does not have any significant effect on customers. This makes it difficult for companies to maintain consumer loyalty (QuickMBA, 2007). Threat of substitute products Food and beverages companies offer products that are highly similar. This offers the consumers a wide range of substitutes to choose from. The best way a company can avoid customers from switching to substitute products is by ensuring they produce high quality goods and offer them at a low price (QuickMBA, 2007). This is an issue that Kraft Foods Group can easily deal with through the help of its innovative ability. The threat of substitutes is real and the company should be ready to deal with it accordingly. Bargaining power of suppliers Any organization or individual who does business aims to make maximum earnings. It is not different for suppliers in the food and beverages industry. The suppliers have many companies to whom they can sell their products. However, the high competition in the industry forces the companies to go for suppliers whose offers are favorable. This factor makes suppliers less influential in the industry since almost all the companies are looking for fair deals. The threat of suppliers bargaining power to Kraft Foods Group is not too much (QuickMBA, 2007). Bargaining power of buyers Buyers are always willing to spend as little as possible and get the highest possible quality for products or services. Buyers will always go to the company or brand that satisfies the