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Competitive Rivalry and Corporate Level Strategy

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1 - Applying your understanding of strategic management, explain how business-level and corporate-level strategies are best used to gain a competitive advantage and earn above-average returns.

2 - What are the advantages and disadvantages of competitive rivalry? How can a company use competitive rivalry to its advantage? Provide clear examples.

3 - Explain the differences between mergers, acquisitions, and takeovers. How do you determine which one to use when attempting to gain a competitive advantage over others in your field?

4 - Discuss why companies use acquisitions to achieve strategic competitiveness, and describe some obstacles that prevent successful acquisitions.

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1. The corporate level strategies guide the entire organization. It creates a culture. The business level strategies address the specific needs of the customers. Both the corporate level strategy and business level strategies exploit the core competencies of the business to help the company gain competitive advantage and earn higher than normal profits. Consider the example of Wal-Mart. The corporate level strategy is cost leadership. The company has a culture that supports low cost operations, high turnover of assets, and getting low prices from the suppliers. The business level strategy ensures that products are available to its customers at low prices. This strategy exploits the core competency of Wal-Mart and ensures that the company has competitive advantage and earns above average returns.

2. The advantages of competitive rivalry are that each company strives to perform better than its competitors. The ...

Solution Summary

The response provides you a structured explanation of adversarial price competition among companies . It also gives you the relevant references.

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Kraft Foods Strategic Choices

Using the Kraft Foods Group, we will be integrating the results of our SWOT with our chosen strategy.

Create a 5x5 table with the four strategies listed across the top and the four SWOT variables at left as follows:

Low Cost Differentiation Focus Preemptive




Select an element from any analytical models that contributes to each of the four SWOT variables. For example, for Weaknesses, you might select an element from Porter's Value Chain (say, operations).

Enter the elements you have chosen with the corresponding SWOT variable. Below, "strong competitive rivalry" has been chosen for Threats. Note that other choices could have been high barriers to entry, high bargaining power of suppliers or customers, high substitutability (from Five Forces analysis), or a specific political, economic, social, or technological factor (from PEST). Complete this process for all four SWOT variables.

Low Cost Differentiation Focus Preemptive




Strong Competiton

Indicate the impact each strategy might have on each SWOT factor you have chosen by offering a business action that will address the SWOT. For example, follow the threat "strong competitive rivalry" across all four generic strategies. How would a low-cost strategy address an industry environment characterized by intense rivalry? What about a differentiation strategy? Focus? Preemptive?

Low Cost Differentiation Focus Preemptive




Strong competitive Undercut rivals on Brand loyalty Find an underserved Beat rivals out of the
rivalry price through operational attracts repeat market segment that gate, establish dominant
economies customers rivals are unwilling position
to serve

The strategic action you choose to fill in a given blank should do two things: 1) offer a tactic for taking advantage of a strength or opportunity or for managing a threat or weakness, and 2) follow the basic thrust of the strategy in that column.

Refer to the attached files for more background information.

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