Competitive and Corporate Strategies

Competitive and Corporate Strategies

Competitive and corporate strategies are used within organizations big or small to help the company gain competitive advantage. Competitive advantage occurs when a company exceeds the average profits within an industry. Kraft needs to implement the correct strategies which can help them gain sustainable competitive advantage. After conducting a grand strategy matrix I have concluded that Kraft should use combination strategies. In this essay explain these strategies and there usage.

The first types of strategies are called vertical integration strategies. These strategies are used to gain the power of supplies, distributor or competitors within an industry to gain power over the market. The first strategy is called the backward integration this is the control or ownership of Kraft's suppliers. With the use of this strategy Kraft can control the cost as well as the quality/ quantity of the items in the inbound logistic stage. Forward integration is the second strategy which is the control or ownership over Kraft distributors. They can control any cost which the distributors may charge to distribute Kraft's products. This can assist in controlling your cost in the values chain and finally horizontal integration which is the control or ownership of your competitors. With enough capital Kraft can buy out their competition which can cause them to have control over the bargaining power of their consumers.

The second types of strategies are called intense strategies. This is when a company increases its market shares and revenue by market expansion or product improvements. These strategies consist of market penetration which is the use of the same product in the same market to expand market shares. This is done with the help of promotions, advertisement etc. The next strategy is called market development this is when you take a current product or service into a new geographical location. This is when you sell your product in a different country or you franchise you business. The final strategy is called product development this is when you use a current product and enhance it in the same market. This can be achieved with the use of R&D where Kraft can make changes to the product by the design, packaging, adding new flavors etc.

The third and final types of strategies are called the diversification strategies, but we will only be using one of the two strategies. This is the process of when a company goes into a new market with a new product its called related diversification. It's when a new product will be related to your industry or market.