Porter's Five Forces In The Food Industry

915 Words4 Pages
The Industry Environment Analysis Compared with the common environment, the industry environment has an extra direct effect on the firm’s strategic competitiveness and to earn above-average returns. The strength of industry competition and an industry’s earnings potential are functions of five forces of competition such as the threat of new entrants, bargaining power of supplier, bargaining of power buyers, threats of substitute products, and intensity of rivalry among competitors. Porter’s Five Forces Model was created to take action as a structure for industry analysis and business strategy development. Porter singled out five different forces that impact competitive strength which portrays an image of the overall attractiveness and profitability of a market. To assist in my evaluation of Six B and its position in the industry, I will apply Porter’s Five Forces Model to the company. Threat of New Entrants The food processing industry is very big and competitive. It is rare for firms within the industry to perform quite well. As a result, many companies enter into the market every year in an effort to increase a part of the profitable market. Six B Food Industry has captured fine market share over the last few years but still the company has a threat from new entrants because anytime any new company or existing company can introduce same products, might be with less prices and can get some portion of Six B’s market share. Bargaining Power of Supplier Six B prides itself on
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