5 Forces Model
Rivalry – The degree of rivalry is high in the kiwifruit industry this is because exporters in four countries (China, New Zealand, Italy, and Chile) dominate the industry which puts a squeeze on current and new rivals. Also the global increase of kiwifruit production has led to more supply which in turn affects the competition. In addition there is not many variations or species of kiwifruit available on the market with exclusion of Zespri’s gold . Therefore majority of exporters are selling the same product with different to no variation in quality. Lastly the kiwifruit is niche product in the fruit industry and only accounts for a small amount of the retailer’ sales. Therefore competition to gain shelf space in grocery stores and supermarkets are high.
Threat of Substitutes – The threat of substitutes is high in the kiwifruit industry because kiwifruit only accounts for 1% of the total world fruit production. Therefore many countries do not really eat kiwifruits and can substitute them with the many other fruit products that are cheaper and more readily available. As well as vitamins and supplements that may provide the nutritional factors that kiwifruits provides.
Threat of New Entrants – The threat of new entrants is low in the kiwifruit industry because of the competition between the 4 countries exporters is highly competitive which limits number of new entrants. Also brand quality and proprietary products are difficult for new entrants to replicate.
Suppliers Power – The supplier power is low because there are a lot of growers and are concentrated in specific countries. Also there is not many differentiations of kiwifruits supplied to give suppliers power.
Buyer power – Buyer power is high in the kiwifruit industry because it’s a niche fruit and there is various fruit substitutes and kiwifruit only account for a small amount of retailers’ earnings.
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