Sorrell Ridge
Case: Sorrell Ridge a. What are Sorrell Ridge's sources of negotiating power and weaknesses? What about Bromar’s?
This case is about the slotting allowance when Allied Old English Company wants to introduce the Sorrell Ridge spreadable fruit product into the California market. Considering the factors including product itself, market, distribution channels, consumers’ needs& demand, competitor’s profiles, we analyzed the negotiating power and weakness of Sorrel Ridge and Bromar.
Sorrell Ridge’s power:
1) Uniqueness of product itself: Comparing to its competitors’ products, Sorrel Ridge could be a diabetic diet.
2) Volume of the Product itself: it holds 60% of retail sales in the all-fruit segment.
3) Consumers’ needs: People are concerned about healthy food. And 44% consumers were single brand users.
5) Distribution Channels: All-fruit jams were distributed in only 40% of the country’s supermarkets and concentrated in the northeast. The potential market of Sorrell Ridge is big.
Sorrell Ridge’s weaknesses:
1) Product itself: 90% new products failed and withdraw within a year.
2) Market: Comparing with other players in the market, Sorrell Ridge is a new player in California, and has no customer base.
3) Distribution Channels: Sorrell Ridge has no sales force.
4) Distribution Channels alternatives: Selling through grocery distributors or a middleman would cause the retail price to be 25% higher.
Bromar’s power:
1) It is the No. 2 broker in southern California.
2) Market: Grocery trade has increasing power compared with manufacturers.
3) No retailer published a schedule of slotting charges or publicly stated what a slot bought.
4) It handled large volume accounts including Starkist Tuna, ect.
5) It had a staff of 400 people so that it could provide complete and frequent coverage of grocery stores in the market.
6) It assigned an account executive to each customer, managing the product line and working with supermarket chain
This case is about the slotting allowance when Allied Old English Company wants to introduce the Sorrell Ridge spreadable fruit product into the California market. Considering the factors including product itself, market, distribution channels, consumers’ needs& demand, competitor’s profiles, we analyzed the negotiating power and weakness of Sorrel Ridge and Bromar.
Sorrell Ridge’s power:
1) Uniqueness of product itself: Comparing to its competitors’ products, Sorrel Ridge could be a diabetic diet.
2) Volume of the Product itself: it holds 60% of retail sales in the all-fruit segment.
3) Consumers’ needs: People are concerned about healthy food. And 44% consumers were single brand users.
5) Distribution Channels: All-fruit jams were distributed in only 40% of the country’s supermarkets and concentrated in the northeast. The potential market of Sorrell Ridge is big.
Sorrell Ridge’s weaknesses:
1) Product itself: 90% new products failed and withdraw within a year.
2) Market: Comparing with other players in the market, Sorrell Ridge is a new player in California, and has no customer base.
3) Distribution Channels: Sorrell Ridge has no sales force.
4) Distribution Channels alternatives: Selling through grocery distributors or a middleman would cause the retail price to be 25% higher.
Bromar’s power:
1) It is the No. 2 broker in southern California.
2) Market: Grocery trade has increasing power compared with manufacturers.
3) No retailer published a schedule of slotting charges or publicly stated what a slot bought.
4) It handled large volume accounts including Starkist Tuna, ect.
5) It had a staff of 400 people so that it could provide complete and frequent coverage of grocery stores in the market.
6) It assigned an account executive to each customer, managing the product line and working with supermarket chain