Confectionary Porter Five Forces

Topics: Confectionery, Competition, Price Pages: 3 (632 words) Published: November 23, 2011
The Five Forces Model was developed by Michael Porter in 1979 as a tool to analyse and classify an industry as well as identify profit potential areas in an industry. The model uses five forces of the industry to help identify three major aspects of an industry; competition, profitability, and attractiveness of the industry Rivalry among existing firms in the confectionery industry is very high + gain market share from their competitors

+ creating new products, changing existing products, or marketing with special offers + Companies in this industry are constantly developing new products to release into the market which creates competition to become the leader in innovation as well as cost and sales

Threats of New Entrants (Low)
The confectionary industry is a fairly hard industry to start in Firms in the confectionary industry are always competing on price and innovation which makes it hard for small companies to keep up: + the large amount of output

+ low price of supplies to make the new products
Distribution Access and Relationships
Relationships with both suppliers and sellers are important to firms so they can have the best access to new products as well as the best access to buyers of the products

Threat of Substitute Products (High)
Companies are always thinking of new products to put on the market so they can out-do their competitors
have a significant economy of scale entry barrier because large companies exist in the industry that has high production output Specialty chocolate and cocoa products are used as gifts during numerous seasons and celebrations including Christmas, Easter, Halloween, Valentine’s Day, anniversaries and birthdays. Relative Price and Performance

Consumers are always looking for the new best thing. Along with being the new thing, consumers are also shopping on price companies must always be making the best tasting product
at the lowest price
Keeping costs low on older products is important in the eyes of the...
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