ICT for Development of Food Innovation

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Executive Summary

In today’s world, the business markets and industries have become influenced immensely by the external forces. Such forces include political, economic, social and legal factors. However, the forces which have affected the business markets most are technological and environmental. Like every industry, these two forces have also impacted the food industry. Since food is the most basic need of every human, therefore such influences by these two forces has resulted in the increased concerns for the people about safety and security of the food they are eating which is creating problems for the food businesses. However, such challenges are creating need to incorporate technology in the protection and safety procedures of food because of the increasing environmental uncertainty. In general, the rain, flood, earth quacks and volcanoes patterns have changed over the past years around the globe which has affected the agricultural industry and because of it the food production and distribution has been also influenced negatively which resulted in the increased impacts over the protection and safety of food. Thus, the increasing rate of technological innovation has resulted in the development of ICT technologies (Information and communication technologies), which is also impacting such industries like food and agriculture to influence the food’s protection and security. However, the integration of mobile phone as an ICT is significant as it provides enormous benefits to the organization facing such challenges in protecting and securing food. The benefits it provides range from the supply chain management to human resource management. Thus, certain cost is also needed to implement such ICT program, including the cost of integrating mobile phones at the work place, cost of developing mobile application and cost of training employees’ competencies in relation to ICT. To maximize the effectiveness and contribution of ICT in dealing with the challenges of food protection and security, the selection of best ICT supplier is essential.

Table of Contents

Executive Summary

1.0 Introduction

2.0 Application of the CSF Methodology for Kraft

2.1 The first business objective: Developing healthy food

2.1.1Strengthen market research and strive to develop healthy products

2.1.2Advanced technical equipment and perfect management system

2.1.3 Actively promote a healthy lifestyle

2.2 The second business objective: Attract customers enter the website of the company.

2.2.1 Improve website content and help consumers understand the company

2.2.2 Provide new service in the website

2.2.3 Convenience to use – optimize search engine

2.3 The Third business objective: Developing safty food

3.0 Detailed Discussion of Two ICTs

3.1 Improve the website content by communication with customers directly

3.2

4.0 Outline the Business Case

4.1 ICT and Food Issues

4.2 Benefits

4.3 Cost

4.4 ICT Supplier

5.0 Conclusion

6.0 References

1.0 Introduction

2.0 Application of the CSF Methodology for Kraft

2.1 The first business objective: Developing healthy food

Kraft Food Inc is the largest food giant in the United States, founded in 1852, it’s also the world’s second largest food company. The company’s mission is to become a global food industry leader, and its four core product lines are coffee, confectionery, dairy products and beverages, many bands target different customer groups, meet their needs and effectively achieve product differentiation. The Kraft company provides high-quality, great taste and nutrition for all eating occasions whether at home, in restaurants or on the go. (Kraft Heinz, 2018)

Due to the continuous improvement of living standards, consumers’ demand for healthy foods is becoming stronger. The purpose of food consumption is not only to simply satisfy the demand, but more importantly, to maintain a healthy physical condition. Healthy food is a kind of food, its raw materials are mainly taken from natural animals and plants. Through advanced production techniques, the rich functional ingredients are used to the extreme thus regulating the body functions. And suitable for the corresponding people with specific functional needs. Healthy foods can be divided into nutritional supplements, antioxidants (healthcare), slimming and adjuvant treatments. Face with such market demand, Kraft began to work on the research of healthy food and strive to produce low-sugar, low-salt and low-calorie foods. As a global food company, Kraft has kept up with the needs of the customers and the market’s trends, encouraging consumers to pursue a healthy lifestyle by producing healthier and greener foods.

According to the American Health Organization, about two-thirds of adults in the United States suffer from overweight and obesity, which increases their risk of heart disease and other diseases (Barboza, 2003). Kraft promote the concept of healthy food through following three critical success factors:

2.1.1Strengthen market research and strive to develop healthy products

The concept of healthy food has become more and more popular, especially for the younger generation of consumers. They are pursuing organic and natural food which forced many big food companies to change their marketing strategies and develop healthy products to meet market needs. Faced with severe situation, many well-known food companies have announced plans to reduce or eliminate ingredients such as artificial flavors and preservatives, sugar and salt  (Scheherazade & Whipp, 2016). In order to accomplish this business objective, Kraft conducted a large number of market research to understand the consumer’s requirements for healthy food. First, Kraft decided to change the size of food packaging, especially snack foods. Small size foods can help consumers reduce the risk of obesity. Second, Kraft reduced the proportion of food additives, especially non-natural food additives, sugar, salt, calories, which can cause unhealthy factors for consumers such sugar-free Kool-Aid.

2.1.2Advanced technical equipment and perfect management system

Advanced production technology and strict quality management system are prerequisites for Kraft’s development of healthy food. At first, in order to develop healthy food, the company uses advanced biotechnology technology and specially purchased equipment with international advanced level. Second, the company has a series of strict quality supervision management system and procedures, the division of labor is clear, employees must complete their duties in accordance with the post responsibility. Third, the company strictly implements the food safety management system by regularly strengthening the job training for employees with assessment indicators.

2.1.3 Actively promote a healthy lifestyle

Kraft announced its corporate strategy to the public in July 2003-it was launching a global initiative to fight obesity. First, Kraft changed its marketing promotion strategy and expanded its investment in health foods and lifestyles. These ads, both online and offline, are guiding and encouraging consumers to choose a healthy lifestyle.  Kraft Foods today said it would shift its children-targeted advertising spending away from products such as Oreo and Kool-Aid toward more nutritious products  (Thompson, 2005). On the other hand, Kraft emphasizes that the company’s corporate culture is to hope to convey to customers a healthy life philosophy and a commitment to customers and hope that every customer has a good attitude towards life. The Kraft brand always pursues innovation and strives to let people enjoy a healthy and comfortable life in a busy life.

2.2 The second business objective: Attract customers enter the website of the company.

The corporate website is a platform for enterprises to conduct online marketing and image promotion on the Internet. Through the website, enterprises can realize product sales and product information release. Kraft’s success is inseparable from its all-round advertising strategy. In addition to increasing the investment in TV advertising and expanding the impact on viewers’ visuals, Kraft also attaches great importance to the construction of the company’s website. To attract customers, enter the website, Kraft conducted the following three critical success factors:

2.2.1 Improve website content and help consumers understand the company

The gradual development of the network has made it possible for consumers to have direct dialogue with manufacturers, and consumers can learn about company and product information on the company’s website. In addition, companies must regularly update product information to meet customer needs.

2.2.2 Provide new service in the website

Develop new products and new services that meet the needs for consumers to stimulate customer enthusiasm, attract market attention at the brand promotion meeting to attract consumers to browse the company website. At the same time, the company will provide entertainment projects on the company’s website, such as online games and videos. The company will adjust the service items to meet customer needs in a timely manner based on customer feedback.

2.2.3 Convenience to use – optimize search engine

Through years of practice, Kraft has optimized the content of netizens to make them more in line with user browsing habits and increase the number of users Search Engine Optimization (SEO) is the most critical task for any website to succeed in its promotion. The company will strengthen the training and management of customer service personnel.

2.3 The Third business objective: Developing safty food

3.0 Detailed Discussion of Two ICTs

We identified two methodologies which are xxx and xxx as the most important issues for the Kraft. One is communication with customers directly, another is food safety in xxxx.

3.1 Improve the website content by communication with customers directly

Communication with customers directly is the most important issue for the Kraft.

Collecting customer feedback through different channels, understand customer perceptions of Kraft products, and get valuable customer feedback. ICT provides a very convenient and effective channel for social media platforms such as Facebook, Twitter, Instagram, blogs and review websites. (Touch Work, 2018)

Social media platforms are the channel that collect valuable and meaningful customer feedback. Billions of people around the world have become accustomed to sharing their user experiences, reviews, and commons with text, images, and videos through the social media community. By creating a company homepage to provide customer support for the brand, the company provides a platform for valuable customers who want to connect with the company in a more relaxed, faster and easier way. This is more likely to be more realistic than communicating over the phone. (Bernazzani, 2018)

Although Kraft can collect customer’s feedback by sending text messages, filling out web forms or e-mails, the number of responses received is limited and many customers will ignore those ways. When the Kraft publishes information on a social media platform, social media feedback often occurs. Many customers prefer and like to participate in feedback and comments through social media platforms, which they find more convenient. This is a trend in the development of network technology and changes in people’s living habits. Kraft needs specialized human resources and technical resources to manage, monitor and deal with noise to enhance brand reputation and avoid the spread and spread of negative information. (Touch Work, 2018)

It is very important to understand the customer’s evaluation of the company’s brand on social media platforms, because the speed and breadth of social media content expanding is deep impress influence. A piece of information or policy can affect millions of potential customers and existing customers’ perceptions of the brand. (Bernazzani, 2018)

Using a variety of ways of social media customer feedback to improve customer service can provide valuable insights for the company.

  • Listening social

Kraft can monitor the social media platforms to understand brand situations both its own and their competitors. For example, provide timely customer support and feedback to customers experiencing product and service issues, whether or not they seek help from the company. Kraft can also learn about customer dissatisfaction with their competitors, provide their customers with better solutions, or learn how to stand out from their competitors. (Bernazzani, 2018)

  • Collect Product Feedback

When a company launches a new product or changes the functionality of an existing product, it will want to get feedback from the current customer. Companies can use the social media platforms to understand whether customers accept new products or adapt to the change. Guide the concept of customers through social media platforms. Design effective user experience and design issues to help companies identify potential problems during development.

The advantage of social media platforms are the customers who participate through the network include not only current users, but also potential customers, target customers and industry influencers. Get extensive feedback on new products to increase adoption rates at the time of release. (Bernazzani, 2018)

  • Conduct Market Research

Using social media platforms to conduct polls, to understand their views and opinions on some issues, to further understand customer preferences and expectations of products, is very useful for improving services and developing new products.

  • Sourcing Blog Content

Publishing theme ideas, product information, articles, pictures or videos through social media networks, encourage follower to share and deliver commons, and resonate with the audience.

3.2

4.0 Outline the Business Case

4.1 ICT and Food Issues

ICT technology is relatively a broader term than Information technology (IT). IT is simply the incorporation of computer hardware and software collectively so that data retrieval, transmission and manipulation become easy and convenient. However, ICT primarily focuses on the integrated communication through the use of IT, networking and telecommunications devices so that data sharing and storing can become effective. ICT enables people, governments, businesses and global firms to engage each other to foster interaction and communication in a highly digitalized world (Hashim, 2007). Initially, the role of ICT has also been significant in industries other than the food industry. Alike other industries, Information and communication technologies are critical in dealing with the problems food industry is facing. In recent times, the food market where ICT is not integrated precisely created many issues for the food business related firms, like Kraft food Inc. because the protection and safety of food was harmed. Such issues primarily include foodborne illness which is also called food poisoning. The consumers are facing this disease around the globe because of the bad quality and non-fresh food as the food is not protected by latest technological equipment that ensures freshness (Trienekens & Zuurbier, 2008). Another major issue for the consumers is the increasing exposure to the pesticides due to unavailability of ICT that identifies the actual amount of pesticides which are needed, resulting in the increased birth defects, digestive system breakdown and many other diseases because pesticides are now being used in the production of food including fruit and vegetables. Thus, the threats are not imposing to the people only, but are also getting imposed to the natural environment because natural environment, food and the people are very closely related among each other as well as with the global pollution and greenhouse effects that damaging earth’s atmosphere (Verbeke, 2005).

4.2 Benefits

Thus, all these and other problems related to the food security and protection can be managed effectively by the integration of ICT in the food business operations. For instance, the integration of mobile phones with relevant mobile applications or software as an ICT can make a big difference towards the increasing concerns over food security and protection. The incorporation of mobile phone as an ICT is able to provide immense benefits to the food related businesses like Kraft Foods Inc. so that they can ensure protection and security of the food. As food products mostly get expired or become stale during the delivery processes based on long delivery time periods. Under such situation, the weather prediction is essential to analyze so that food delivery processes can be initiated under appropriate weather to ensure food freshness. This is the first and foremost benefit that the integration of mobile phones as an ICT provide, since the available weather forecast can assist in identifying the best weather to deliver food and worst weather not to deliver food. Such mobile phones can also help in sharing that weather-related information with the other people in the delivery chain in the firm. In relation to food delivery process, the food can also be protected by not keeping it in the delivering process unnecessarily for too long until and unless there is a demand from customer. It also results in the decreased food wastage since the supply will become prompt and reliable (Opara, 2003). However, it can be achieved with the integration of mobile phone since it is the best technological tool that makes communication very prompt and effective. Therefore, such effective communication through mobile can enable the company and customer only to initiate delivery process when it is needed that will ensure the protection and security of food. Moreover, the use of mobile phone as an ICT with relevant applications will also assist the firm in making their overall supply chain management system effective other than the delivery process. In the process of food protection and security, one of the most essential aspect is tracking (Matopoulos, et al., 2007). However, it can also be achieved with the use of mobile application by integrating RFID (Radio Frequency Identification) in the delivery process as well as in the logistics and warehousing of the food products. Each food inventory can be traced and if find perishable, so then it can be delivering promptly or kept in a more optimal environment to ensure protection of food. However, ICT is still a technological tool and cannot work in areas where it cannot reach but human can have access to everywhere in relation food protection and security. Since, humans as employees are involved in each process from food acquiring to food distribution, therefore ICT can be used to manage that human resource in order to ensure their effectiveness towards food protection and safety where it becomes irrelevant (Prajogo & Olhager, 2012).

4.3 Cost

To gain any benefit in the business operations like to protect and secure the food, certain cost is always required that needs to be incurred so that maximum benefits can be generated. In regards to the food protection and security, there are several costs that need to be implemented to run the application. First and foremost, cost that needs to be incurred is the monetary cost to integrate mobile phones in their business operations. Second cost is the cost of developing appropriate mobile applications or software for mobiles that can be used as a tool to enhance effectiveness in the overall supply chain system. Moreover, the cost of incorporating RFID system in the organizational operations is also needed to implement and run the application. Thus, a major required cost is of the human resource function which will recruit candidates who possess basic technical and computing skills. However, in order to boost the performance of those employees, the training and development of them is also crucial, thus the organization also needs to bear the training and development cost of human resource so that food protection and security can be ensured (Ruiz-Garcia & Lunadei, 2011).

4.4 ICT Supplier

As the need to integrate ICT is identified to ensure food protection and security, now it is essential to identify best supplier for ICT so that organization can implement it with justified cost and effectiveness. The first step to take to select the best supplier of ICT for the firm is to identify the potential firms who provide ICT products and services. Once such firms are identified, it is then essential to evaluate them and short list the best possible suppliers. After filtering out the best suppliers, the examination of firms’ profile and information is initiated. Thus, once the potential firm is selected, it is then the step of value and vendor analysis in which evaluation of each of the ICT’s component ranging from quality, price, service standards, delivery processes and payment system and so on is conducted. If all the aspects of ICT’s supplier are appropriate, the supplier will be selected for the organization who will provide them ICT products and services (Grunert, 2005).

5.0 Conclusion

Conclusively, the development of ICT is enabling global food businesses to gather and analyze relevant information so that they can develop productive operational practices to boost their operational performance. The role of ICT is significant in maintaining and ensuring food security and protection. In my views, the integration of ICT is affordable and applicable for all the food businesses like Kraft Foods Inc. The arising opportunities from the on-going development of ICT will also provide room to such food related business organizations to develop and adapt new technological methodologies to foster effective communication and operational management. The food businesses can become able to develop their strategies based on the contribution of ICT in protecting and safeguarding food that can assist in expanding business operations. Once the business operations of food business are expanded successfully, it results in the increased revenue and profits for the organization. Thus, firms can deal with all the challenges related to food protection and security by integrating ICT in their business operations which will definitely lead them to the achievement of organizational goals and vision which result in the organizational success.

6.0 References

Barboza, D. (2003, July 2). Kraft Plans to Rethink Some Products to Fight Obesity. Retrieved from The New York Times: https://www.nytimes.com/2003/07/02/business/kraft-plans-to-rethink-some-products-to-fight-obesity.html

Bernazzani, S. (2018, August 20). 8 Ways to Use Social Media Customer Feedback. Retrieved from Hubspot: https://blog.hubspot.com/service/social-media-customer-feedback

Grunert, K. G. (2005). Food quality and safety: consumer perception and demand. European review of agricultural economics, 32(3), 369-391.

Hashim, J. (2007). Information communication technology (ICT) adoption among SME owners in Malaysia. International Journal of Business and Information, 2, 2.

Kraft Heinz. (2018). Brands people love. Retrieved from Kraft Heinz: http://www.kraftheinzcompany.com/brands.html

Matopoulos, A., Vlachopoulou, M., Manthou, V., & Manos, B. (2007). A conceptual framework for supply chain collaboration: empirical evidence from the agri-food industry. Supply Chain Management: an international journal, 12(3 ), 177-186.

Opara, L. U. (2003). Traceability in agriculture and food supply chain: a review of basic concepts, technological implications, and future prospects. Journal of Food Agriculture and Environment, 1, 101-106.

Prajogo, D., & Olhager, J. (2012). Supply chain integration and performance: The effects of long-term relationships, information technology and sharing, and logistics integration. International Journal of Production Economics, 135(1), 514-522.

Ruiz-Garcia, L., & Lunadei, L. (2011). The role of RFID in agriculture: Applications, limitations and challenges. Computers and Electronics in Agriculture, 79(1), 42-50.

Scheherazade, D., & Whipp, L. (2016, April 26 ). Big Food in health drive to keep market share. Retrieved from Financial Times Scheherazade Daneshkhu and Lindsay Whipp: https://www.ft.com/content/83f05ea8-08a3-11e6-a623-b84d06a39ec2

Thompson, S. (2005, January 12). Kraft to stop advertising some foods to children. Retrieved from Ad Age: http://adage.com/article/news/kraft-stop-advertising-foods-children/41865/

Trienekens, J., & Zuurbier, P. (2008). Quality and safety standards in the food industry, developments and challenges. International Journal of Production Economics, 113(1), 107-122.

Touch Work. (2018). DIRECT CUSTOMER FEEDBACK VS SOCIAL MEDIA FEEDBACK : PROS AND CONS. Retrieved from Touch Work: http://www.touchwork.com/direct-customer-feedback-vs-social-media-feedback/

Verbeke, W. (2005). Agriculture and the food industry in the information age. European review of agricultural economics, 32(3 ), 347-368.

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