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Economics and Kraft Foods Company

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Introduction

In the recent past, I have managed to go through a few economic courses. Even though most of them were classes with basic principles, they have largely contributed in my interest in economics through inspiration and fascination. Before my economic class in high school, all I knew was the fact that economics deals with the economy and money which is not the case. During an economics class, whether macro or micro, philosophical and scientific approach as regards peoples’ behavior is taken. The economic scope may be incredibly broader than we think. That is the main reason as to why I love economics. Theories and generalizations are made which range from actions of individuals to those of a company or a group and even to several different nations. There exist local, national and global economies. The most fascination thing is that all of them bead with similar basic principles that are associated with human want satisfaction using minimal resources available.

My organization of choice was Kraft Foods Company. It is a multimillion foods company located in the US and has offered its services for over a century now. It deals with beverages and foods. It has been offering unbelievably delicious foods which suit the consumers’ way of life. Multiple times in a day, for at least 150 countries globally, these consumers have not failed to reach out to the popular brands of Kraft Foods which include Philadelphia, dairy lea, Kenco, Mikado Biscuits, milka chocolate, toblerone and many other massive numbers of brands. The great popularity of Kraft Foods is what prompted me to settle for it. The fact that the financial status of this company has not been appealing at all also did compel me into choosing it, in order to make a few improvements.

Since the brands of this company seem to be perfect and most preferred by the outside world, the question that lingers in everyone’s mind is; what is responsible for the financial loopholes? The answer to this question basically lies on the management of the company. It would be wise if the management of this company was shuffled and a remuneration of workers be done to ensure more productivity. This company would also do best with a merger. To cut down on competition, a merger would help increase the number of consumers and to increase consumer trust and confidence. The type of brands chosen should be carefully chosen. They should be unique from brands from other food companies

It is important for managers to take note of the issues that determine major changes in conditions that are macro in nature and the way there may be future changes in these conditions in order to make plans and arrangements for them. Much as managers may have control as regards micro conditions, it is very hard for them to have the same power over macro conditions. Macro economics has had an impact to the Kraft foods company. Factors including European Union, inflection, single currency, exchange rates and many others affect this company a great deal.

The European Union has been considered as globally one of the biggest markets that are single. The union consists of 27 countries and in fact, a sixth of the British trade can be found within the union. This system was put to functioning in 1999 and a there is a strict use of single currency which is the euro. The central operational bank is the European central Bank and other several institutional arrangements. The trade activities initiated by the Kraft Foods in the union would result to immense profitability due to the elimination of transaction costs. Also, the single currency (which is the euro) trade results to an effortless trading to the company.

The method of single currency was launched in 1999 with only eleven countries. Factors that are related to this method of currency may also affect Kraft Food Company as well. One of these factors includes the exchange low cost during trading within the EU. These effects are beneficial to the company since it results to more money saving and greater investments in other countries within the EU.

Assuming that this company is not in the EU, exchange rates may broadly affect the performance of the company. The company will be required to use price competitions during their marketing activities. A fluctuation in the currency of a foreign country must be keenly monitored and acted upon effectively. In case of an increase in foreign currency, the company should reduce the importation of production units in order to cut down on production costs.

Conclusion

Well, in my opinion, even though these are just but a few macroeconomic factors that may affect the company’s financial performance, it is important to note that with appropriate observance of principles great improvements may be noticed.

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