What Is The Threat Of New Entrants In The Food And Beverage Industry

Threats of new entrants
In Kampar, the treat of new entrants in the food and beverage industry is high as the barriers to enter are low. There are many similar products about the coffee and the taste of the product are likely the same. We are hard to break the strong brand without spending heavily advertising. So, it is very important to have an innovative product to attract more customers.
Besides that, there are low cost advantages independent of size in the food and beverage industry. Those new industry may have cost advantages that are not related to the size of the company. The existing firm in an industry may have to purchase land when it was less expensive than it is today.
Furthermore, there are high capital requirements barriers

There are willing to accept the cost disadvantage, if the economics of scale is good. Rivalry among existing firms
The threat of rivalry among existing firm in the food and beverage industry is high. The number and balance of competitor in the industry is large which affect the rivalry among existing firm. The more competitors there are, the more likely it is so that it will threaten our business.
Besides that, the degree of difference between the product compare with other company is small. The degree of the competition will be strong since there are few differences between the products, it will affect our industry rivalry. The cost of the industry may higher than other competitor, because they may use the good quality of the beans and the fresh food to make their product.
Furthermore, in Kampar the growth rate of industry is fast-growth. As the industry is fast-growth industry, there will be weak than slow-growth industry because they want earn back their capital fast as possible and the profit or revenue as much as the industry can do it. The slow-growth industry will be stronger than other industries those who are

The switching cost are high when the industry want to change another supplier, it will affect the profit from the industry. Switching cost are the fixed cost of the ingredients that buyer encounter when they want to change the supplier from one to another. The higher the switching cost the lower chance to change the supplier.
Besides that, the supplier concentration is important when there are only a few suppliers that only supply a critical product to a large amount of buyers. The suppliers have the advantage to concentrate other industry.
After that, the attractiveness of substitutes is high in the food and beverage industry. The supplier power is increase when there are no attractive substitutes for the product or services that supplier offers. If a supplier has an attractiveness of substitutes, the regular supplier power will decrease because industry will not stick on a supplier and they will have another