Problem Statement
Peter owns a chain of health food stores in the United States. His store specializes in selling organically grown produce and health food to the local niche market. The entry of a new rival into the market has reduced the market dominance previously enjoyed by Peter’s company. The rival company, an established grocery store, is offering similar organic and health products.
Relevant Facts Related to the Problem
Some of the main factors for the decline in customers and sales are:
Competition: Entry of the grocery store chain into the organic and health food market has made a cut into the customer base. The competitor is selling similar goods at a lower cost than Peter’s store. Due to the high costs of raw materials, Peter is unable to lower his prices. Another factor is that the customer base targeted by Peter’s company is limited. Lack of marketing infrastructure and visibility has a negative impact on the business. His store currently does not offer additional services for customers.
Converting Problem into Opportunity
Environmental factors can have a major impact on the performance of health food business. For Peter to be competitive and be in business, he should first determine the factors that are contributing to the problem his business is facing. Steering the company in the right direction will require Peter to identify new strategies to counter the current shortcomings in the way the business is run. Identifying new opportunities in the industry will help Peter to look at new avenues for growth in the business. Based on the findings from research of the industry, Peter can definitely convert the problem he is facing into an opportunity. Here are some solutions that will help Peter retain his existing customers and grow his business:
Competition/Competitive Analysis: Competition can sometimes be good for business. Analyzing competitor products and identifying the differences in the offerings of products can be very useful. This will allow Peter to identify new products that he can stock up that will offset any comparative shopping by his customers. These new offerings will have to be as per the current trends in the health food industry.
Supplier: Peter will need to explore the possibility of identifying new suppliers for some of the products he is selling. This will give him the bargaining power required to lower costs on his procurements. Retaining the quality and lowering the supplier price will allow Peter to sell other products in his stores.
... There are a lot of competitors in the market selling dancewear on a much bigger scale than Karolina does right now. The three potential competitors mentioned in the case have a different distribution strategy as compared to Karolina. They sell their products through retailers and are international businesses selling across the border of Canada as well. Their scale of business is very large, selling in numerous retail stores and thus obviously producing a lot more than her, and although not stated, it is safe to assume that their revenues are way bigger than Korra Dancewear’s. The implication and analysis of this data is that the three given competitors- Ainsliewear, Mondor and Bloch cannot be considered a direct competitor to Korra Dancewear. Their scale of business, their distribution channels, their sales and the amount of capital invested by them in the business and the amount of human resource investment is huge - they have been in business for years and have tons of valuable experience over Korra Dancewear. Karolina works all alone with no proper office set up or a business plan or any dedicated retail store, so her competition is different, like the online store DANSHUZ , who just like Korra Dancewear only sell through their online
Lawry’s sauce poses a serious threat to A1. Both firms have great brand awareness and unique value propositions. Though they have unique value propositions both the products are positioned close by regards to their offerings (Exhibit 3). Provided that Lawry is successful with its marketing campaign the launch threatens to cannibalize A1’s market share resulting in a hit in its profit. Nevertheless, A1 can leverage its strong market presence to ward off Lawry’s threat whilst at the same time it can also establish itself as a prominent player in the growing marinades market, already having 10% of the existing
Understanding the number of competitors and their capabilities in a particular market is a key function of building strategy. If a company is competing against another company offering the same product or service, it faces limitation in regards to both supplier and buyer power. Customers will always tend to go to the place where they get the same product for a cheaper price, while supplier will tend to flock to places where the deal is considerably high. For CMG, a key differentiation in its competition within the fast food industry is designated I its ability to meet a one of a kind fast food experience where customers experience fine-dining similar to high0end hotels, but a low prices. CMG additionally differentiates totally with its rivals in the sense that they struggle to offer healthy and high-quality food that positively impacts the society.
Some dominant economic features of this industry include the number of rivals, the number of buyers, vertical integration, and supply/demand conditions. The number of rivals in this industry varies on the scope of how large or small the firm is. Larger rivals include Whole Foods and Walmart and smaller rivals include Lucky’s Food Market and Pathmark. For example, Walmart has a highly differentiated product selection. it offers various forms of products that are ‘identical’ to better convenience its consumers. Walmart also has large channels of distribution where its “shippers are always on the lookout for ways to speed product from source through supply chains to the consumer” (Walmart, 2014 Pg.1). The number of buyers in this industry is consumers who are buying large volumes of products, where these buyers do not necessarily have any buying power. The majority of of grocery stores are in the retail industry, where larger involvement occurs from integrating operations, and suits the industry as a competitive
The key issues facing the client are that; firstly; the business is focusing all of its energy onto the youth market and not attracting business and sales from the older demographic that in years to come will be a massive market, which is as yet untapped. This may be due to the fact that one of the client's main aim is to "help provide children with healthier food" (GMID 2007). Secondly; the client has not fully taken into account the changing lifestyles of people and their demands, emerging markets within the health drinks market such as health snacks have not been considered by the client and must be if they wish to expand their business and move away from being known as a one product business.
There are significant barriers to entry in the grocery store industry that prevent new entrants from taking market shares from preexisting giants, such as Kroger and Whole Foods. Economics of scale are prevalent in this industry, forcing any potential competitors to overcome large upfront costs to be able to compete in terms of pricing. In addition, there are strong exit barriers. Companies have large investments in property, inventory and distribution channels that they are not willing to lose in order to leave the industry. Finally, local farmers are not likely to gain a large force in the industry, as many are not willing or able to invest in obtaining certifications from the government.
Vicky must avoid harming the powerless versus harming the powerful. The powerless in this case are the other stores that are going to compete with K.I. in the New England states region. Vicky is in charge of coming up with a unique pricing strategy that will run the competitors out of business within an 18-month period. The other competitors’ stores are considered powerless when compared to the gigantic and powerful Koke International. Vicky must consider the harm that is going to affect the powerless stores, which will lead them to bankruptcy according to Wendy’s plan. Vicky must also consider harming many versus harming few. The many in this case would be employees of the other five major players in the region and the few are K.I.’s employees. If the plan is successful then K.I. becomes a monopoly in the region while the competitors go out of business leaving their staff unemployed. Therefore Vicky must be concerned about the harm that is going to affect the many left unemployed versus the harm that is going to affect the few at K.I.
Many companies face challenges to make their products stand out due to globalisation especially in emerging markets, and expanding product portfolio from other businesses. The food industry not only has to develop innovative ideas for the growing population, but provide consistent high quality both in products and services (Dumovic, Knowles, 2008). The purpose of this academic essay is to critically analyse the importance of implementing, supporting, and driving factors to help Pars Food Ltd communicate, identify competitive advantage and differentiation, to meet long term aims, and strategies (Dumovic, Knowles, 2008).
• Discussing the two forces of competition, which are threat of new entrants and threat of substitutes, and identifying the most significant of those forces for McDonald’s Corporation.
Customers/Consumers were worried about the changes in the market for food and drugs because they no longer had a single clue of what was in their products. Food production was moving from household prepared to general markets. As food markets became more refined due to the improvement of technology. The difficulty in discerning the quality of their product heightened. With new and quicker ways make food, fears of the ingredients that the foods consisted grew. Preservatives and chemicals also instilled a concern to consumers. Health officials, chemists, and other individuals tested and proved the dangers of these new additives.
Whole Foods is different from their competitors because they mainly focus on innovation, quality, and service excellence, by allowing it to charge premium prices. Whole foods faced an increase in competition from larger food retailers, which include, Walmart, Costco, and many more. From the time of Whole Foods creation, the market share was less than six national stores in the United States. Although the organic food industry is growing and Whole Foods finds itself competing hard to maintain its elite presence. When Whole Foods started, they had little to no competition. Today, the organic industry is c...
Big rivals such as Tesco and Morrisons started to compete in price by shrinking packages, introducing cheaper equivalent products, or using cheaper ingredients. Although these strategies cause a sluggish revenue increase, it works on boosting sales and market shares. For example, Tesco’s sale grew by 2.2 percent during July to September. Apart from the traditional retailers, Aldi who applies a similar discounter model is also a strong competitor. In 16th July, the market share of Aldi was 6.2% while Lidl occupied 4.6% of the market (Gale,2016) Compared to Lidl, Aldi has a more dominant market position and better corporate with local farmers. To stand out from these rivals, Lidl still has a long way to go.
In today’s world even with the economy suffering and individual income declining, the food industry is still up and running. Chain restaurants, mom and pop establishments, and fast food restaurants that are learning to market their products cheaper and more reasonable to the consumer are still going strong in the United States. They are offering healthier meals due to the consumer wanting to become healthier. They have their ups and downs like any business but are learning to give the consumer what they need and desire. That is the way restaurants keep their customer happy, by buying products from company like Sysco, Gordon’s Food Service, (GFS), and other restaurant suppliers. However; Sysco is the number one supplier to restaurants and hospitals, making them the most profitable company in the world (Sysco.com, 2011).
Partch, Ken. "The Updike story, redux." Supermarket Business, Dec. 1987, p. 5. General OneFile, go.galegroup.com/ps/i.do. Accessed 3 Apr.
When selecting our case, we wanted to choose a company that a majority of our class wouldn’t have heard of before. We were researching possible topics and companies and came across Beech-Nut Nutrition Corporation. The company sold a wide variety of products ranging from vacuum-sealed jars of bacon to chewing gum from its inception in 1890. However, Beech-Nut’s most lucrative product was its baby food, which began around the 1930s. At this time, the company was the second largest producer of baby food products in the U.S. The company differentiated itself from competitors by packaging its product in glass jars rather than cans, which were used by most manufacturers. Their baby food line did well, but sales took off with the arrival of the postwar baby boom, where sales nearly doubled between 1948 and 1950. By 1950, Beech-Nut had 48 different types of jarred baby foods that provided more than a quarter of the company’s $70 million of revenue.