Forces Analysis: What Industry Definition? Why? Analyze Essay

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Forces Analysis: What industry definition? Why? Analyze 5 forces (list high low medium reasons bullets essay style. End a summary bottom's important analysis Snapple end case. 2. Draw recommended positioning diagrams Snapple end case.

Five Forces Analysis: What is your industry definition? Why?

Snapple is competing in an almost perfectly competitive market, with a high degree of competitive rivalry and few barriers to entry.

The threat of the entry of new competitors: The thereat of entry of new competitors is extremely high. Snapple sells a beverage that can be easily replicated using iced tea or fruit juice. Although it markets itself as a unique natural beverage, people have been making fruit drinks and other iced drinks for a long time, and could easily carry such drinks with them in their own containers. Local brands as well as national brands could compete with Snapple in almost every subset of the market.

The intensity of competitive rivalry: The food business is extremely competitive, given the low price margin at which it functions. To succeed, food purveyors and dependent are upon high-volume sales. The long-term rivalry between Pepsi and Coca-Cola is an example of how, despite (or because of) the similarity of many beverages in the market, there is intense rivalry between brands.

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The threat of substitute products or services: Extremely high, as is the case for all food and beverage products. If the price of apples goes up, people are more apt to buy cheaper oranges. However, the threat of substitutions is particularly high in the beverage market. People 'have' to eat, but can always drink water with food.

The bargaining power of customers (buyers): The bargaining power of customers is extremely high in the beverage market, given their power to refuse to consume the product.

The bargaining power of suppliers: In the case of some iconic brands, such as Coca-Cola, the company has sufficient levels of consumer loyalty to demand exclusive agreements between itself and franchisers. For many years, McDonald's only offered Coca-Cola brand products, because it had an exclusive agreement with Coke. However, overall, suppliers to consumers tend to have more bargaining power than manufactures, given that sellers like Snapple are reliant upon purveyors to act as middlepersons in marketplace: there are no 'Snapple stores.'

Summary: Although it may be….....

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