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Essay / Fresh Connections - 1770
I am going to conduct a 5 forces analysis of the industry that “Fresh Connections” is involved in, i.e. the fresh food industry. These forces help us analyze everything from competition intensity to industry profitability and attractiveness. We will 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) Rivalry between competing sellers First and foremost, competitive rivalry describes the intensity of competition between existing businesses in an industry. In the fresh produce industry, the intensity of rivalry is influenced by different characteristics. The price is an important point. Companies in this industry may raise their prices over lower prices to gain a temporary advantage. Prices are heterogeneous because they depend on the volume of sales. Large companies can thus reduce their prices. Another factor is experience: buyers are reassured when a company has been involved in the business for many years. Brand identification tends to reduce rivalry. However, there are high levels of product differentiation that are associated with low levels of rivalry. Indeed, the fresh produce industry is characterized by great diversity. We can find many recipes available in different sizes and volumes, for all tastes and budgets, and Fresh Connections is in this case. There are also specialty products, for example low-fat meals and nutritional health products. Quality also plays an important role in this industry. People who like a product will easily buy it again. Additionally, the industry is quite innovative as old products are constantly improved and new products are regularly...... middle of paper ...... elastic since customers have more alternatives. Producers of fresh produce compete with companies that produce frozen foods and with large supermarket chains that sell food products in large quantities to restaurateurs. They are also in direct competition with fast food restaurants and grocery stores who sell ingredients to make the recipe at home and with farmers who sell directly. Considering that fresh food is just a way to feed people, any food product is a substitute. If the price of fresh food increases significantly, a customer is likely to switch to products like frozen food because they are similar or they will prefer to go to a fast food restaurant because they offer more services. These substitutes are available everywhere. They offer good quality, are nutritional and safe and are competitively priced. In addition, it is very easy to compare prices of products and services..