Environment Analysis of Baking Industry

             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.

             Customer Bargaining Power - High.

             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 retailers to match their need for a products that will understand their intelligence. They know what they want and at what price they want it. It is that simple. Today's consumer is constantly bombarded with options due to different types of media. Retail design as a concept for enticing new consumers is a constant in the market. This aids in driving the competition to find an advantage. The consumer knows it has a wide range of choices. They understand food products better and use this to shop around for the best product. As a result, the ability for a retailer to switch cost is very low. Everything depends on the quality of product. There is a sense that today's consumer is undecided when it comes to loyalty.

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