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Rivalry among the competing sellers - Essay Example

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Rivalry among the competing sellers

In the food segment the Marks and Spencer's company employs the following competitive moves so that it cab have an advantage over its rivals. First and foremost it changes its prices to suit the consumer's purchasing power and this enables the company to have a temporary advantage over the other rivalry firms. Similarly the company makes further improvements in its food products differentiation and it also maintains good relationships with the suppliers. (Baryon 2006)
In the industry this is a very strong force since the Marks and Spencer's company's food industry has strong brand images and this makes it very hard for the new entrants. The initial capital expenditures are very huge and the exiting companies are achieving their economies of scale by being global. Another threatening factor to the potential new entrants is the trade tariffs as well as the international regulations whereby they have to prove themselves to the foreign companies, customers and also suppliers.
In the food industry the substitute food products belong to the other firms in the industry. The Marks and Spencer's foods segment is highly affected by the price changes in the substitute food products. Since the more the substitute food products become available to the consumers then the demand of the food products from the Marks and Spencer's company become more elastic.
This fur...
A close substitute food product in the industry further constraints the company's ability to raise its prices. On the other hand there is a lot of price competition in the industry especially in the food substitutes. Most of the consumers in Marks and Spencer's foods consider the suitability as well as the nutritive value and also the convenience of the food products which they are purchasing. (Claris, 1980)
4. The power of the suppliers
This is a very strong force especially since the suppliers serve the food industry. The Marks and Spencer's company requires the food supplies and other food raw materials. This has further led to the company creating very solid relationships with its suppliers and also the other firms which provide the company with the required food products. Since the company's suppliers are powerful they exert a lot of influence in the industry. On the other hand the company's suppliers are concentrated and they also have powerful customers.
5. The power of the buyers
On the other hand this is a very moderate force in this industry since the existing competition keeps the prices similar amongst all the other companies in the food industry. However the only difference is that companies such as the Marks and Spencer's foods segment have value added food products which allow a higher price. The customers have a very high impact in the Marks and Spencer's foods industry since their buying power is very strong.
The company also has a few buyers who have a significant market share and they purchase a very significant proportion of the company's food products. The porter's 5 forces model has some limitations that are very major limitations in the market ...Show more

Summary

In the industry there is a very strong force since the Marks and Spencer's company's competitors use the price cuts in their competition and there is also a low cost and an ease to the switching brand. Thus the companies in this industry diversify and also acquire other companies for their strategic growth as well as synergy…
Author : dock94
Rivalry among the competing sellers essay example
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