Porter's five forces models Essay Example | Topics and Well Written Essays - 750 words

Porters five forces models - Essay ExamplePorters five competitive forces embroil the bargaining power of buyers, the bargaining power of suppliers, threat of new entrants, potential substitute products and the aim or extent of rivalry among the competitors. The model of five forces can also be used to analyze the scrawl making labor of the UK (Daft, R. et al 1991). The slit making industry of UK is one of the largest merchandises of the entire food industry and is worth approximately ?3.4 billion. The UK baking industry is divided into three sectors, large plant bakers which control 78% of the market, the in-store bakeries produce around 17% of scratch and the master bakers or the craft bakers produce the remaining which is 7% of the pillage produces in UK. These three sectors of the industry are competitive and there is competition within distributively of these sectors as well which results in a high level of competition in the entire bread making industry of UK. The larg e plant bakers, for example, include three large plant manufactures and the largest of these is the Warburtons and in concert all of these control almost 3/4th of the large plant bakery sector. ... The three main manufactures of bread in UK are Premier foods (Hovis), Allied Bakeries (Kingsmill) and the largest producer, Warburtons. These companies produce 80% of the bread sold in UK and therefore, the level of competition between these industries is also high as they compete to cater to the larger portion of bread market in UK. Another force is threat of substitute products which is also high in this industry. consort to the Federation of Bakers, everyday almost 11 million loaves of bread are sold in UK with a total volume of fewer than 4 billion units with a variety of almost 200 opposite bread products available for the consumers. Therefore, there are a lot of substitute products available for the consumers of this market. As off the beaten track(predicate) as the bargaining p ower of suppliers is concerned, most of the bread sold in this market of UK is produced by topical anesthetic or domestic companies. As there are a number of dominant suppliers in the market (Premier foods, Allied Bakeries, Warburtons), they have a certain level of power over the market as together they control more than half of the market. They can exercise this power by collaborating and dividing the market amongst themselves. As a result, they could even stop new companies to enter the market and could even set prices to earn high profits. Therefore, it is sooner difficult for new companies to enter this industry as the market share of the industry has already controlled by the three dominant suppliers. As a result, new entrants would have a limited margin for expansion. in addition that they might not be able to compete with these dominant suppliers as they already have positioned themselves