Environment Analysis of Baking Industry: Featuring Sara Lee and Porter's Five Forces
The use Porter Five Forces model in understanding the baking industry to gather conclusions about the industry's standing is warranted. A market place can be an unstable environment. An organization's ability to turn a profit is determined by Porter's Five Forces of competition. These forces include: (1) the intensity of rivalry among existing competitors, (2) the barriers to entry for new competitors, (3) the threat of substitute products or services, (4) the bargaining power of suppliers and (5) the bargaining power of buyers. To compare and contrast side by side, these forces establish value for the product or service. It represents customers, suppliers, distributors, substitutes, and potential new entrants. By looking at the forces in detail, allows one to have insight into the factors that motivate an industry, its current profit levels and future successes. Porter's five forces allow for probable changes in future such as different suppliers, channels, substitutes, or competitors. Today's savvy consumer is educated when it comes to their food choices and how to actively choose food products including baked goods. This gives the consumer power over retaile
New entries into the market, one would think should be low because of the government guidelines food companies must follow. Times are changing as expressed earlier. With the advent of e-business the explosion of Internet or direct to customer sales via telephone are rapidly impinging upon the traditional retail storefront. Many customers enjoy the convenience of shopping even for food online because of the delivery factor. It is up to the company to have an ongoing static presence on such search engines to maintain a competitive edge in multiple languages. Still the popularity of such options remains a viable threat especially among the younger generations growing older. Too much web presence also does not bring in older, Baby Boomer customers as they may not be online. The Overall Level of Rivalry - Moderate The baking industry in America is facing many changes due to a changing market and changing consumer needs. Obesity is a real issue facing Americans but this does stop companies like Sara Lee from selling baked goods. It just means changing the product to meet customer demand. These changes could be seen as threats. Only diversification product will lead to success at this point. The future of these companies depends on presentation of different formats and product specialty to keep the customer's attention. These niche stores will meet consumer demand of specific needs. This paper explored the strengths and weaknesses found within the American food industry, specifically the baking industry by using Porter's Five Forces model. There is a perception that the more densely populated an area becomes the higher the competition with the c
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Approximate Word count = 1127
Approximate Pages = 5 (250 words per page double spaced)
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