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  • Essay / Turning Kraft's Strengths into Opportunities - 1742

    IntroductionWhen a company earns a profit above the industry average, it is said to have a competitive advantage over its competitors. The goal of much business strategy is to achieve sustainable competitive advantage (SCA). (QuickMBA, 2007) Michael Porter identified the main types of benefits used by companies. Cost and differentiation advantages are positional advantages used by organizations to achieve this competitiveness by creating superior value for their consumers and thus increasing their profits. During this extended session, I will discuss strategic plans including: low cost, differentiation, focus and preemption. Comparing each strategic plan with one of Kraft's SWOT elements, I will discuss a tactic to take advantage of a strength, opportunity, or manage a threat or weakness, and ultimately recommend which strategic plan to achieve SCA. Create a competitive advantageA competitive advantage exists when the company is able to offer the same benefits as its competitors but at a lower cost (cost advantage), or to offer benefits that exceed those of competing products (differentiation advantage ). (QuickMBA, 2007) Creating this competitive advantage is achieved by utilizing the resources and capabilities of the organization, either through cost advantage or differentiation. Porter identified three basic strategies, including the cost leadership strategy. This strategy aims for the organization to be the low-cost producer in the industry. These ways to lower prices include: improving process efficiency, vertical integration and avoiding certain costs for example. Differentiation strategy aims to develop a product or service offering unique attributes that are valued middle of paper...... December 9, 2013. .Moeller, Scott. “Case study: Kraft’s takeover of Cadbury.” Financial time. Financial Times, January 9, 2012. Web. January 2, 2014. .PR Newswire. "Who Makes the Right Decisions in the Reputation Economy? Amazon, Kraft and 3M, New Study of U.S. Consumers Finds." Bloomberg.com. Bloomberg, April 5, 2011. Web. December 18, 2013. .Watrous, Monica. “Reshaping product development at the heart of Kraft Foods’ strategy.” Food industry news. Éditions SOS Land, February 20, 2013. Web. January 2. 2014. .