Tayal Mayank Strategy Final Ice Fili
1. How structurally attractive is the Russian ice cream industry and how is it likely to evolve?
Porter’s 5 forces Analysis:
1. Supplier Power: The main suppliers in the ice-cream industry comprises the suppliers of raw materials such as milk, milk powder, sugar, flavor additives and suppliers of equipment and technology.
a. Ingredient Suppliers: There are numerous suppliers for the ingredients in the market and there is very less differentiation among these ingredients. Besides, since these ingredients are not expensive, the switching costs for the ice-cream manufacturers is quite low and can easily find the alternative supplier. Threat of forward integration exists with the concentration of suppliers, making bargaining power of suppliers low.
b. Equipment/Technology Suppliers: Most of the ice-cream manufacturing machinery is imported from Danish and American firms. Though at least 10 private ice cream equipment companies exist locally by 2001 and local supplier base is developing fast, but the count is quite low in comparison to 300 producers in the market. The bargaining power concentrated in the hands of these suppliers increasing the switching costs for the manufacturers.
2. Buyer Power: Major buyers in the ice-cream industry are different retail channels such as kiosks, minimarkets, gastronoms, supermarkets, restaurants and end consumers.
a. End Consumers: For most of the consumers ice-cream is just an inexpensive snack that is easily affordable. Thus, the switching costs for the customers are quite low. The customers are more concerned about the preservatives in the food that the fat content while making purchases. They have wide variety of choices from various ice-cream producers and can easily substitute one brand for another owing to lack of differentiation among brands. Besides, only large changes in the price points (50%) would make the differences in consumer’s purchasing behavior.
b. Retail Channels: Most of the consumer purchases are driven by
Porter’s 5 forces Analysis:
1. Supplier Power: The main suppliers in the ice-cream industry comprises the suppliers of raw materials such as milk, milk powder, sugar, flavor additives and suppliers of equipment and technology.
a. Ingredient Suppliers: There are numerous suppliers for the ingredients in the market and there is very less differentiation among these ingredients. Besides, since these ingredients are not expensive, the switching costs for the ice-cream manufacturers is quite low and can easily find the alternative supplier. Threat of forward integration exists with the concentration of suppliers, making bargaining power of suppliers low.
b. Equipment/Technology Suppliers: Most of the ice-cream manufacturing machinery is imported from Danish and American firms. Though at least 10 private ice cream equipment companies exist locally by 2001 and local supplier base is developing fast, but the count is quite low in comparison to 300 producers in the market. The bargaining power concentrated in the hands of these suppliers increasing the switching costs for the manufacturers.
2. Buyer Power: Major buyers in the ice-cream industry are different retail channels such as kiosks, minimarkets, gastronoms, supermarkets, restaurants and end consumers.
a. End Consumers: For most of the consumers ice-cream is just an inexpensive snack that is easily affordable. Thus, the switching costs for the customers are quite low. The customers are more concerned about the preservatives in the food that the fat content while making purchases. They have wide variety of choices from various ice-cream producers and can easily substitute one brand for another owing to lack of differentiation among brands. Besides, only large changes in the price points (50%) would make the differences in consumer’s purchasing behavior.
b. Retail Channels: Most of the consumer purchases are driven by