Essay on Snack Food Industry

691 Words Nov 29th, 2012 3 Pages
When performing a five forces model for the snack food industry, I first looked at competition from rival sellers as I felt that this was the strongest threat for manufacturers. Rival sellers can easily try to produce a new line of products, mimic a competitor’s product, and it’s difficult to differentiate a snack food from the competition as there is so much competition. The market isn’t quickly growing, so rivals are competing for the same customer base and there is very little if any cost to switch from one snack food to the next. Many snack foods are very similar and there are hundreds if not thousands of competitors all fighting for the consumer’s purchase.
A high competitive pressure exists from the sellers of substitute
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The items used to produce snack foods are readily available, standard products that are used by many of the manufacturers. I also wouldn’t imagine that it would be hard for a manufacturer to switch from one supplier to another further weakening bargaining power.
The competitive pressures from buyer bargaining power and price sensitivity would be low also as generally speaking snack foods are fairly low priced and common staples in most American’s cupboards. I don’t feel that consumers are going to change their snack food purchases in a down economy or that you will see the snack food industry shrivel up in an economic down time.
The competitive pressures make the snack food industry cut-throat and I would advise a new firm to seriously consider how they will gain market share as it would be a pretty competitive environment to try to enter, but for an existing firm with a strong market share they could continue to evolve their strategy to changing market conditions in order to achieve positive future profitability.
Some critical factors for the success of any firm in the snack foods industry would be a snack that contained an appealing taste to customer as you won’t have more than one sale if consumers don’t like the taste of your products. It’s also critical that the products are priced competitively as I feel that most snack food consumers aren’t very brand loyal and would try a new

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