Journal of Entrepreneurship Education (Print ISSN: 1098-8394; Online ISSN: 1528-2651)


How does Porter?s Business-level Strategies affect Competitive advantage in the Food and Beverage Industries?

Author(s): Hajar Mohammad Alhosseiny

Adopting an appropriate competitive strategy by any firm is a crucial issue since it determines the approach the firm has to follow in order to achieve sustainable competitive advantage. The objective of this research work is to find out the best-practice competitive strategy in order to be adopted by the firms in the Egyptian Food and Beverage sector so that it can achieve sustainable competitive advantage and join the successful and good profit-making firms of this sector globally. Porter’s model was taken as a basis of this research work. The model suggests that there are two main strategies firms can adopt either: Low Cost-leadership strategy or Differentiation strategy. In the Cost-leadership strategy, a firm strives to be low-cost producer of traditional products. On the other hand, in the Differentiation strategy, a firm is to produce products with unique features that are not imitated by other competitors and hence are sold only by this firm. Porter’s model also showed that firms can combine both strategies together forming a new strategy that can be called Hybrid or Integrated strategy The current study, being a survey desk research, chose to investigate the Food and Beverage sector as it is considered the world’s biggest industries and the largest contributing sector in the world’s Gross Domestic Product (GDP). Due to the availability of data, the research work encompasses the top twenty-seven (27) large food and beverage firms in the U.S and Canada. Eight years data about these firms have been collected and analyzed. Such a period is assumed to be a sufficient time to judge their status considering their sustainable competitive advantage. Several variables affect achieving competitive advantage, the most influential variable is the business-level strategy adopted by the firm. The sustainable competitive advantage of a firm is judged by studying the companies’ performance throughout the years with the adopted strategy. Analyzing sales and revenues of the companies’ accounting statements enabled the researcher to estimate the percentage of market share of each firm as a measure of the success of its strategy. Results showed that Differentiation strategy adopters have achieved the highest market share, and got a sustainable advanced ranking in the global competition.

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