ENBUS302 Study Guide - Quiz Guide: Frucor, Niche Market, Pasteurization
23 Mar 2016
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Evaluate the competitive threat in the industry and conclude on prospects for profitability within the industry (3 points). Bargaining power of suppliers: there are not many potential input suppliers because the products phoenix organic needs to purchase are unique. The organic ingredients they use have high demand but low supply so they could pay up to 100% more for their ingredients and they have to carry them from season to season. Phoenix organic makes up a large portion of their suppliers" business but there are not many suppliers. It would be difficult for their suppliers to enter the juice business because the margins are low. It is difficult to switch to substitute products because the company want specific and high quality ingredients and, again, there are not many suppliers. Phoenix organic is well informed about the suppliers" product and market. All of this means that the profitability is low for phoenix organic.
