Swot Analysis of Mister Potato

Topics: Snack foods, Potato chip, Private label Pages: 11 (2690 words) Published: January 29, 2012
Industry Analysis Assignment

Potato Chips and Similar Snacks
Business 444 (Section 2)
Dr. Meilich
By: Mike Lou, David Quiroz, Tony Constable

1) Industry Definition

a. The salty snack industry, as defined by the article “Potato Chips, Corn Chips and Similar Snacks”, includes the manufacturers of potato chips, tortilla chips, corn chips, ready to eat popcorn, pork rinds, potato sticks, and extruded snacks .

b. Industry product value chain

Service providers (electricity, gas, water, telephone, building rent) Chemical and other substances providers (salt, sugar, oil, flavors, and others) Farmers (corn, potatoes, wheat, and grains)
Packaging, cans and labels.
Salty snack manufacturers
(Focal Industry)
Retailers (supermarkets, grocery stores, large warehouses, convenience, club, mass merchandisers, liquor and drug stores, stadium vending machines, and other) Final consumer
Employees (Labor)
Government (regulations on labeling. distribution and shelf fees) Transportation
(Trucking services)
Office supplies (pens, pencils, paper, computers, fax, etc)

c. Multi-scope chart
Focal Industry
Snack: A small quantity of food taken between regular meals. Fruits
*Salty Snacks* (potato, tortilla and corn chips, “rte” popcorn, pork rinds, potato sticks, extruded snacks) Candy
Granola and Rice based Products
Multigrain bar snacks

2. Identified Players

a. Rivals: Rivals include all companies that produce salty snack products. This includes large national firms and smaller private label brands. b. Buyers: Buyers include supermarkets, grocery stores, warehouse club stores, vending machine companies, drug stores, sports stadiums, and other retail outlets such as small restaurants. Suppliers: Suppliers include farmers, oil producers, chemical producers, packaging material suppliers, laborers, and energy providers. Substitutes: Substitutes include all snack items that do not fall into the salty snack food category such as candies, pastries, fruits, vegetables, granola and rice based products, and multi-grain bars.

Strategic Groups Map


Distribution Channels




c. Strategic Groups:

The groups are private label companies and national brand companies. The national brand segment is comprised of large national firms that have distribution channels throughout the United States and sometimes throughout the world. The top three are Frito Lay, Borden, and Eagle Snacks. Frito Lay controlled nearly ½ of the market with $5.6 billion in sales during 1992. The Borden Snack Group who had $1 billion on sales was the Frito Lay’s nearest competitor. Trailing Borden was Eagle Snacks with $600 million in sales. National brands are full service snack producers that manufacture a wide range of snacks from potato chips to pork rinds. Private label brands are smaller firms that have a much smaller sales volume when compared to the national brands. Private label brands also tend to only produce specialized products and distribute within a regional area.

3. Macro Environment
a. Social:
The social trend of eating healthier foods has had a huge impact on the salty snack industry. After the public learned that they should reduce their salt intake and that low fat diets were linked to the reduction of cancer and heart disease, consumer preference changed. Salty snack manufacturers responded to this threat by producing healthy products such as no salt and low oil potato chips. Healthy snack foods took a large portion of the market away from traditional snack foods. Low fat and no fat potato chip sales grew 48% in 1995 when compared to sales 1994. Sales of healthy tortilla chips also...
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