STRATEGY 411 Chapter Notes - Chapter 3: Organic Milk, Switching Barriers, Bargaining Power
Document Summary
Analyzing industry structure: five forces + 1 model. To produ(cid:272)e: (cid:374)eed la(cid:374)d, (cid:272)ows, la(cid:271)or, et(cid:272) easy to o(cid:271)tai(cid:374)/repli(cid:272)ate. Price sensitive: no- can easily buy organic milk from other producers. Switching costs: no- can easily replace organic milk shelf space w/ other product. Retailer has limited shelf space so if price is high, will buy milk from somewhere else or replace it with other product (low switching costs) If there is a loss, the loss is to the producer. Price sensitivity: no- already spending more because it"s organic milk. Switching costs: no- doesn"t cost anything to switch to a different brand. Bargaining power: no- doesn"t have a say in how much product will cost. Supplier power: low- plenty of sources available. Dairy free milk (almond, cashew, coconut milk) When those complements are bought, higher chance of organic milk being bought (increase profits) Industry growth is slow- nothing new happening, no improvements. To produ(cid:272)e: (cid:373)a(cid:374)y suppliers/growers easy to o(cid:271)tai(cid:374)/sell.
