Azalea Seafood 5 Forces and Swott Analysis

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1.Rivalry among competing sellers (Moderate)

• Customers switching costs are low
• Demand for products is starting to grow
• Compete aggressively for favorable product placement in supermarkets

2. Competitive Force of Potential Entry (Moderate-Strong)

• Economies of scale are fairly low to initially enter the market as a value-added seafood producer • Customer loyalty and brand preference is high. If first-time customers are pleased with their experience, then they are likely to be repeat customers. • The industry is beginning to grow

• Many unfilled niches to pursue

3. Competitive pressures from Substitute Products (Moderate)

• Attractively priced alternative products are rapidly available • Very low competition for gumbo
• In a sense Azalea has to compete with every other product in the store such as steak, fish, chicken, etc. • Customers have low switching costs

4. Bargaining Power of Suppliers (High)

• Considerable latitude in the choice of suppliers since the purchase of such items as raw seafood, raw vegetables, and packaging are commodity-like in nature and are available from multiple suppliers

5. Bargaining Power of Buyers (High)

• Buyers have higher leverage since they make their purchases in large quantities • Buyer's switching costs are low
• Buyer's have bargaining power due to the difficulty of value-added seafood products to sell directly to individual customers

SWOT Analysis

Strengths

• Capable top management
• Great-tasting award-winning recipes
• Azalea's representation in Wal-Mart Supercenters and other regional supermarkets – about 1,100 retail outlets in the southeastern U.S.

Weaknesses

• Dependence on gumbo sales which account for 90% of company sales • Loss of accounts due to poor quality control and inspection procedures • Very low cash to fund future expansion and exploit new market opportunities • Product line seems to only have regional appeal

• Production process is labor...
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