Currently, the market place is saturated with a variety of makes and models of coffee makers. It is unlikely that a new manufacturer will arise and attempt to enter the market at this time. There is a minimal threat of new entrants because initial costs of entering a new market place and navigating the mechanics and supply chains could produce a considerably lower profit margin.
Bargaining Power of Buyers:
The G-Brew is projected to be the highest “gross profit” product that Company G has created. Seeing as there is no current competition for this line, only a catastrophic economic downturn would hamper forecasted profits. With the target market being those who make 60K+ a year, it is unlikely that recession of any kind will have an immediate effect on sales. The lower income-demographics and spending patterns of those groups were not factored into the …show more content…
It is anticipated that it could take 6-months or more for the competition to release a viable alternative brewer. In the spirit of keeping one step ahead of the competition, Company’s G’s top engineers are already crafting the next generate of brewer technology. Keeping a 6-month or more advantage on the competitors will ensure that there is an unlikely chance of threat to substitution for the G-Brew line. However, with ever advancing technology, there could be some minimal profit loss if a competitor developed a different or another unique approach to drink production.
SWOT Analysis
To illustrate the G-Brew’s strengths and weakness, the following chart has been included. Please note that the stengths far exceed the weaknesses. The SWOT analysis clearly shows that production should proceed with the G-Brew
STRENGTHS
• Reputation among merchants as a dependable manufacturer *
• High-quality product with brand awareness in target consumer group*
• History of successful product unveilings