Introduction When a firm sustains a profit that exceeds the average for its industry, the firm is said to possess a competitive advantage over its rivals. The goal of much of business strategy is to achieve a sustainable competitive advantage (SCA). (QuickMBA, 2007) Michael Porter identified basic types of advantages used by businesses. Cost and differentiation advantages are positional advantages used by organizations to achieve that competitive through creating superior value for its consumers and thus increase profits for itself. In this session long project I will discuss strategic plans including; low cost, differentiation, focus, and preemptive. By comparing each strategic plan with one of Kraft’s SWOT elements, I will discuss a tactic for taking advantage of strength, opportunity, or managing a threat or weakness, and ultimately recommending which strategic plan in order to achieve SCA. Creating a Competitive Advantage A competitive advantage exists when the firm is able to deliver the same benefits as competitors but at a lower cost (cost advantage), or deliver benefits that exceed those of competitors products (differentiation advantage). (QuickMBA, 2007) Creating this competitive advantage is produced using the organizations resources and capabilities b either a cost advantage or differentiated. Porter identified three basic strategies one of which is the cost leadership strategy. This strategy intends for the organization being the low cost producer in the industry. Such ways to lower prices include; improving process efficiency, vertical integration, and avoiding some cost for example. The differentiation strategy intends to development of a product or service that offers unique attributes that are vale by ... ... middle of paper ... ...9 Dec. 2013. . Moeller, Scott. "Case study: Kraft’s takeover of Cadbury." Financial Times. Financial Times, 9 Jan. 2012. Web. 2 Jan. 2014. . PR Newswire. "Who is Making Good Decisions in the Reputation Economy? Amazon, Kraft and 3M, According to New Study of U.S. Consumers." Bloomberg.com. Bloomberg, 5 Apr. 2011. Web. 18 Dec. 2013. . Watrous, Monica. "Product development overhaul at heart of Kraft Foods strategy." Food Business News. SOS Land Publishing, 20 Feb. 2013. Web. 2 Jan. 2014. .
By making this deal, Kraft not only remains being as strong as it is in the US market but it is also growing in other markets with a well-known company, increasing its production capacity and and brand building capability, which secures its revenues for a long time and increasing its competitive power, its positioning in the international market and winning market share.
Bloomberg Businessweek (201, July 14). How Yum! Brands Is Conquering the World - Businessweek. Retrieved January 28, 2014, from http://www.businessweek.com/globalbiz/content/jul2010/gb20100714_088544.htm
It’s interesting reading about large consumer brands and their various methodologies for consumer research as it relates to new product development. In the consumables business, P&G is the heavyweight and is the pinnacle of research with their expertise in identifying the products that resonate with consumers. They also have manufacturing and distribution dialed in which makes them the “ideal” that many manufacturing-driven organizations aspire to be like.
Johnson, G., Scholes, K. (2002) Exploring Corporate Strategy: Text and Cases. 6th edn. Harlow: Pearson Education Limited.
Sasha Chapman, “Manufacturing Taste: The (un) natural history of Kraft Dinner,” The Walrus, September 2012 http://thewalrus.ca/manufacturing-taste/
This case examines issues of asset control for Ben & Jerry’s Homemade, Inc., in light of the outstanding takeover offers by Chartwell Investments, Dreyer‘s Grand, Unilever, and Meadowbrook Lane Capital in January 2000.
Porter, Michael E. "From competitive advantage to corporate strategy." Harvard Business Review (1987): 43-59. Print. May 2014.
Competitive advantage is the advantage for the competitors and gained by the offerings from the consumers that have the greater value either by the low prices of the products and by providing the benefits and services to the consumers that denotes the high price. It is a set of the innovative and different features of the company and the products and services sale to the consumers so that company can achieve the targets what they have decided and it is the betterment for the enterprise in the competitive market (Porter, 2011). There are three determinants which can be used in the competitive advantage that what the company produce for their consumers, their target market that what they have to achieved and the competition from the other entity
Differentiation through distribution, including distribution via mail order or through internet shopping. For example u can buy Monster from Amazon.com.
In the modern world of conducting business, any company that wishes to succeed must differentiate its products or services from others in the industry. Differentiation makes it possible for consumers to point out notable differences between one company’s products as compared to those of competitors. Differentiation helps companies build brand loyalty as the uniqueness keeps customers fixed on a particular product. BMW is one of the most popular automakers in the world today. It definitely uses differentiation as a strategy to beat off competition by building products that are innovative, detailed and incomparable to those of competitors.
For instance, Harley Davidson may be forced to change their marketing strategy due to the entrance of a new competitor into the market. Second, Harley Davidson has to learn new skills and technologies quickly. For example, technologies are changing rapidly, so it is crucial for Harley Davidson’s business plan to change or alter in order to keep up with innovation. Third, this organization has to effectively leverage its core competencies while competing with its competitors. This is, Flexibility is required for Harley Davidson to learn how to use primary value-chain activities and support functions in the way that allow the organization to produce their products at a lower cost with differentiated features compare to their competitors in the market
of a firm to attain new forms of competitive advantage (Müller, 2011). It is due to these
...nnot be easily imitated by the rivals. For example Indigo Airlines used this approach by their motto of giving high quality services at a very low price, lowest among the rivals, which attracted customers. Their man force (employees), superior quality of service and low prices for ticket was their resources and core competencies, which for a long time rivals were not able to imitate. We can conclude that it is an approach, which is very helpful for the companies to keep their competitive edge, but as the technology is getting advanced day by day there is nearly nothing that cannot be imitated. With many advantages competitive advantage also has few drawbacks sometimes companies go blind in the race for leaving their competitors behind that they start doing illegal things. For Example using low quality raw materials or .. to save the manufacturing cost of the product
This strategy emphasizes the use of an organization’s resources and capabilities to achieve a core competence that cannot be imitated by competitors. Furthermore, the resource based school argues that if an organization distinctively improves its internal capability; that is being able to have effective inside machinery to deliver products and services to customers, the organization will enjoy a massive advantage in the market. This school also argues that in order to have a competitive advantage, an organization must have resource and capabilities that are sophisticated to those of competitors (QuickMBA, 2010).
We can define competitive advantage as simply what a given company excels best at. This could be the distinguishing factor as to why consumers purchase from your company and not the competition. This could also be understood from the perspective of quality that a business can create for the consumer.