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Rivalry among the competing sellers - Essay Example
Pages 10 (2510 words)
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…
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.
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