There are three main streams for Porters generic strategies that are used by multinational firms like Frito-Lay

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There are three main streams for Porter’s generic strategies that are used by multinational firms like Frito-Lay Inc Grandma s to achieve the growth objectives.

Cost leadership: Cost leadership strategy involves gaining a competitive advantage by lowering the cost. Cost leadership is the main generic strategy that Frito-Lay Inc Grandma s uses in various consumer markets.

How Frito-Lay uses a cost leadership strategy?

The primary objective of using this strategy is to preserve the market leadership position through efficient value chain management.

This strategy allows Frito-Lay Inc Grandma s to expand the market share by targeting the middle class, which makes the largest proportion of overall consumer market mix in most of the countries. Middle class consumers generally place high importance to the pricing factor and cost leadership is the best strategy to cater the needs of this consumer segment.

Frito-Lay Inc Grandma s focuses on affordability and easy accessibility of its produce across the globe, which leads towards high brand awareness and high sales growth and provides a strong competitive advantage basis.

Other than charging low prices by lowering production cost and maximizing supply chain efficiency, Frito-Lay Inc Grandma s frequently offers discounts and coupons to achieve sales targets and handle the competitive pressure by its closest rival. The intended outcome of these discount and promotional campaigns is to increase brand popularity and encourage consumption.

The discussion of Frito-Lay Inc Grandma s’s cost leadership strategy has outlined many benefits offered by this generic strategy, such as- gaining quick brand recognition, expanding the customer base, encouraging consumption and achieving sales targets by emphasizing over product’s affordability and accessibility. Although, the analysis of Frito-Lay Inc Grandma s Frito-Lay Inc Grandma s’s competitive advantage strategies highlight cost leadership as the main strategy, the company also uses the differentiation strategy along with cost leadership to set the basis for sustainable competitive advantage in the intensely competitive global consumer market.

Differentiation

Differentiation is another most used generic strategy to build a competitive advantage. Frito-Lay Inc Grandma s uses differentiation in combination with the cost leadership strategy to achieve growth objectives.

How Frito-Lay Inc Grandma s uses differentiation strategy?

The adoption of differentiation as a secondary generic strategy allows Frito-Lay Inc Grandma s to expand the customer base by emphasizing over the unique product features.

Frito-Lay Inc Grandma s's strategic objective of using this strategy is to differentiate by embedding the innovation and address the consumers’ growing health concerns. For example, Frito-Lay Inc Grandma s has extended its product line after studying the consumers’ changing interests to differentiate itself from competitors and expand the scope of opportunities within the industry. The combination of the differentiation and cost leadership has helped Frito-Lay Inc Grandma s build a strong and loyal customer base.

Through differentiation generic strategy, Frito-Lay Inc Grandma s positions its product offerings in a way to stand out and be different from the available alternatives. Being the experienced brand with strong foothold, the company uses differentiation as a tool to reduce the pressure by other brands. Heavy investment in marketing, advertisement and celebrity endorsement is made just to differentiate the Frito-Lay Inc Grandma s from other brands.

Extensive experience, the oldest brand and strong presence in all over the world are some differentiation factors that are highlighted in the company's marketing and communication strategies.

Other than these, the brand logo is also used to set the differentiation basis. The unique and distinctive brand logo has established a strong brand image in consumers’ mind. Although the brand has undergone many revisions, the essence has remained the same, which also serves as a strong differentiating factor.

Moreover, the company offers a wide variety of flavors to match the unique taste needs of consumers. It uses innovation as a tool to offer differentiated augmented services that may delight the customers and increase their preference of Frito-Lay Inc Grandma s over other brands

Focus strategy

Focus is the third generic competitive strategy that encourages companies to concentrate their resources on expanding the narrowly targeted segments. When companies adopt the focus strategy, they serve particular market segments and base their competitive advantage on niche marketing.

How Frito-Lay Inc Grandma s uses focus strategy?

Frito-Lay Inc Grandma s adopts the focus strategy both in terms of low cost and offering the best value. The low-cost focus strategy is adopted by serving the needs of a niche market segment at the lowest possible price. While, best value focus strategy is adopted by emphasizing over the taste, size and design of the product that could best match the customers’ needs and requirements.

By focusing on product attributes, Frito-Lay Inc Grandma s revises its branding strategies and brings continuous changes in the product designing and packaging to satisfy the customers’ psychological expectations and maximize value for money.

Life Cycle

The product lifecycle divides the marketing of the product into four stages: introduction, growth, maturity, and decline. In the first phase, when an organization has developed a product, it will be introduced into a national and international outlet. To create demand, investments are made with respect to consumer awareness. when more items of the product are sold then it will enter the next stage. In the growth stage, demand for a product increases sales, production costs are lowered, and high profits are generated so much so that new consumers are part of the customer base leads to the next stage which is maturity; product becomes well known and brought by many consumers, competition intensifies, and each competitor tries to gain market share.

At some point the market gets saturated and the product is no longer sold which can be countered by introducing new product and innovation. It is a myth that a product has to go through all the stages, it might not go via introduction stage, or many products remain in the maturity phase for a long time period.

There are two key metrics in Frito-Lay's continuous improvement quality program: (1) total customer complaints (measured on a complaint per million bag basis) and (2) hourly or daily statistical process control scores (for oil, moisture, seasoning, and salt content, for chip thickness, for fryer temperature, and for weight). So, first of all product is introduced in the market, and then product is demanded largely in market. Growth rate is very high when demand increases. Finally, when other substitute starts entering market, maturity stage reaches for product. Eventually, product finds stiff competition and its demand starts declining.

Michael Porter’s Diamond Model

It is also popularly known as the Theory of National Competitive Advantage of Industries is a strategic tool used by companies for determining and developing the basis of competitive advantage needed for international growth and expansion. The strategic model is shaped like a diamond and comprises of elements within a framework that determine the case on international competitiveness for a firm within any given industry. The elements within the framework are interconnected, and interactive, and include Firm Strategy, Structure and Rivalry; Factor Conditions; Demand Conditions; and Related and Supporting Industries. For Frito-Lay Inc A Strategic Transition A Updated, these conditions and elements have been particularly favorable in helping the firm boost its growth internationally with continuous innovation and up-gradation.

Factor conditions

Factor conditions are elements and aspects that provide a competitive advantage to the industry and its firms. However, unlike natural resources, factor conditions are usually developed by the country at large. For Frito-Lay Inc A Strategic Transition A Updated, the factor conditions include the following: natural resources, human resources, capital resources, scientific knowledge, technological innovation, infrastructure.

Related and supporting industries

The presence of supporting and competing players in the industry provide positive pressure and encourage mantra to players in the industry towards excelling and expanding through innovation and internationalization. For Frito-Lay Inc A Strategic Transition A Updated, the supporting and related industries have also been particularly helpful in leading the brand into achieving new heights with every passing year.

Strategy, structure, and rivalry

This refers to the company’s strategic focus and its managerial and organizational structure and architecture. The organizational leadership and set up is important for determining the international expansion of the company and firm. For Frito-Lay Inc A Strategic Transition A Updated the organizational structure, and set up as well as the strategic vision and decisions have been important in facilitating the company’s international growth and expansion.

Government

This refers to how governments can influence firm performance and its growth plan through its various policies as well as border relations with other countries one global front. For Frito-Lay Inc A Strategic Transition A Updated, government policies and structures across different countries have been particularly favourable.

Chance events

Chance events in the model refer to those events and conditions in potential markets that are not likely to occur with surety but instead, will provide opportunities, or threats to firms on their occurrence – depending on the risks taken by the firms.

Demand conditions

Demand conditions are those events and conditions that lead to the success of a firm in any given market Local, and home demand is important in not only exposing a firm to the challenges of a bigger market but are also important pushing the firm towards expansion, and possibilities of expansion.

Entrepreneurial Strategy

In addition to the fleet, Frito-Lay used other sustainable business practises using solar energy, water recycling, sustainable agriculture and more. The company has committed to sustainability for long periods and the current sustainability agenda of PepsiCo dates back to 2006. The production process at Fritos-lay is designed for large volumes and small varieties, with expensive special equipment and quick material movement in the facility. Fritos-usually Lay's have high costs of capital, tight timetables and fast processing. PepsiCo and Mondelez International include Frito-Lay competitors. Frito-Lay is 2nd in the overall cultural score compared to its competitors.

They use less fossil fuel, produce less greenhouse gas and often rely on work, not chemicals and energy intensive technology. Sustainable farms promote biodiversity, conserve scarce water resources and build healthy soil using techniques such as composting and crop cover. The greenphillyblog reports that most potato and tortilla chip bags are made of Polypropylene laminated aluminium, also known as metalised polypropylene or polyethylene film of little density. They are generally not recyclable in most cities because they are made from unseparable mixed commodities.

Recently, Frito Lay Corporation, mega producer of potato chips and other quintessential American snacks premiered their new “environmentally friendly” bag for their Sun Chip products. While met with mixed reviews from consumers, products such as these eco-friendly bags represent a recent phenomenon in the corporate world. Corporations are responding to consumer’s desires to buy in an environmentally responsible manner, without compromising their current product preferences. Due to limited time and resources our research cannot reach the depth a true assessment would require, for example an analysis of the chemicals in the pesticides used to grow the potatoes that will someday fill these bags.

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