Fmcg - Five Forces Analysis

Fmcg - Five Forces Analysis

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Short description of Porter's Five Forces analysis for…

Intensity of Existing Rivalry

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Government limits competition (Fmcg) Government policies and regulations can dictate the level of competition within the industry. When...
Low storage costs (Fmcg) When storage costs are low, competitors have a lower risk of having to unload their inventory all at...
Large industry size (Fmcg) Large industries allow multiple firms and produces to prosper without having to steal market share...
Relatively few competitors (Fmcg) Few competitors mean fewer firms are competing for the same customers and resources, which is a...
Exit barriers are low (Fmcg) When exit barriers are low, weak firms are more likely to leave the market, which will increase the...

Bargaining Power of Suppliers

Diverse distribution channel (Fmcg) The more diverse distribution channels become the less bargaining power a single distributor will...
Large number of substitute inputs (Fmcg) When there are a large number of substitute inputs, suppliers have less bargaining leverage over...
Low cost of switching suppliers (Fmcg) The easier it is to switch suppliers, the less bargaining power they have. Low supplier switching...
Inputs have little impact on costs (Fmcg) When inputs are not a big component of costs, suppliers of those inputs have less bargaining power....
Volume is critical to suppliers (Fmcg) When suppliers are reliant on high volumes, they have less bargaining power, because a producer can...

Threat of Substitutes

Limited number of substitutes (Fmcg) A limited number of substitutes mean that customers cannot easily find other products or services...
Substantial product differentiation (Fmcg) When products and services are very different, customers are less likely to find comparable product...

Bargaining Power of Customers

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High price sensitivity Products with a slight increase in price will lose its market share as a non brand loyal customer...
Low buyer price sensitivity (Fmcg) When buyers are less sensitive to prices, prices can increase and buyers will still buy the product....
Product is important to customer (Fmcg) When customers cherish particular products they end up paying more for that one product. This...
Large number of customers (Fmcg) When there are large numbers of customers, no one customer tends to have bargaining leverage....
Limited buyer choice (Fmcg) When customers have limited choices they end up paying more for the choices that are available....

Threat of New Competitors

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Strong distribution network required (Fmcg) Weak distribution networks mean goods are more expensive to move around and some goods don’t get to...
Geographic factors limit competition (Fmcg) If existing competitors have the best geographical locations, new competitors will have a...
High capital requirements (Fmcg) High capital requirements mean a company must spend a lot of money in order to compete in the...
Strong brand names are important (Fmcg) If strong brands are critical to compete, then new competitors will have to improve their brand...
Patents limit new competition (Fmcg) Patents that cover vital technologies make it difficult for new competitors, because the best...
High learning curve (Fmcg) When the learning curve is high, new competitors must spend time and money studying the market...
Customers are loyal to existing brands (Fmcg) It takes time and money to build a brand. When companies need to spend resources building a brand,...

What is Porter's Five Forces Analysis?

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