Five Forces Analysis: Food And Agribusiness Strategy

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Food and Agribusiness Strategy
Five Forces Analysis
A key component of managing a business effectively is having an understanding of the competitive environment in which that company operates weather it’s a large or small business. A way to access the competitive environment is the use of Porter’s model also known as Five Forces Analysis. The Five Forces Analysis was developed by Michael Porter of Harvard business school back in the late 1970’s. Ideally this analysis should be done before starting up your business. It can show you the likelihood of success of the company before you start it up. Even if your company is established the Five Forces Analysis is still extremely valuable. Once you understand the forces that are acting on and affecting
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If you are Glanbia you are worried about Dairygold, Aurivo, Arrabawn and other milk processors. Competitive rivalry is about the companies that are already open, providing the same product or service as your business so they are competing directly with you. When accessing the competitive rivalry you need to compare what you can offer and at what price versus what the other companies can offer and at what price. You must analyse how you are the same/different, how do you set your company apart and identify how much competitors you actually have. If you sell a commodity when your industry is fully saturated your primarily competing on price. If your product is more unique and the market isn’t saturated there is more room to set your company apart such as quality of goods and service provided.
2-Threat of new entrants- Is about potential competitors to your business. These are companies that may spring up in the future and compete with you but they don’t have their doors open yet. Industry’s with very low barriers to entry face a much larger threat of new entrants than industry’s with very low barriers. Essentially the threat of new entrants paints a picture of the rivalry for the future so you can plan
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The top nutritional companies which I have mentioned are formidable competitors and enjoy a sizable scale economy that is not easily accessed by a newcomer. To gain the market share that GPN have by a newcomer would be extremely difficult and would require a huge investment. The marketing and advertising costs to attract new customers and build a significant volume of sales while still maintaining a strong competitive price would be extremely high. As the market for this industry is thriving it may attract newcomers to invest in this industry and challenge competitors for some of their market share. Newcomers may drop the price of their good to attract customers so they can build up their market share. As the inputs for sports nutritional products are available from milk processors, it may make entry by new firms easier if they have the financial backing power behind

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