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Fresh Connections

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I am going to conduct a 5-forces analysis of the industry "Fresh Connections" is involved in, that is to say the fresh food industry. These forces help us to analyse everything from the intensity of competition to the profitability and attractiveness of the industry. We are going to use this model to better understand the industry in which "Fresh Connections" operates. So, the five forces are rivalry, buyer power, supplier power, barriers to entry and threat of substitutes.

1) The rivalry among competing sellers

First and foremost, competitive rivalry describes the intensity of competition between existing firms in an industry. In the fresh food industry, the intensity of rivalry is influenced by different characteristics. Price constitutes an important point. Firms in this industry can raise on lower prices to gain a temporary advantage. Prices are heterogeneous because they depend on sales volume. Big companies can reduce their prices by this way. An other factor is experience: buyers are reassured when a firm is involved in the business for many years. Brand identification tends to reduce rivalry. However, there are high levels of product differentiation which is associated with low levels of rivalry. Indeed, fresh food industry is characterized by a lot of diversity. We can find many recipes available in different sizes and volumes, for every taste and budget, and Fresh Connections is in this case. There are also specialized products, for example low-fat meals and nutritional health products. Quality plays an important role in this industry too. People who appreciate a product will buy it again easily.

Moreover, the industry is quite innovative because old products are constantly improved and new products are regularly a...

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...elastic since customers have more alternatives. The producers of fresh foods compete with companies that produce frozen foods and with large supermarket chains which sell food in big volumes for restaurateurs. They are also in head-on competition with fast-foods and groceries which sell ingredients to make the recipe at home and with farmers who do direct sale. If we consider that fresh food is just a mean to feed people, every food product is a substitute. If the price of fresh foods rises substantially, a customer is likely to switch over to products like frozen foods because they are similar or he will prefer to go to a fast-food because they provide more services. These substitutes are available everywhere. They provide good quality, are nutritional and safety and their prices are competitive. Besides, it is very easy to compare prices among products and services.
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