Sample Essay
The bargaining power of the suppliers in the industry is rather limited as the attention of the consumers is being diverted to the much cheaper store brands. Moreover as the major food makers have limited presence in supplying the food products to the stores to be sold as the store branded food, they have limited exposure to the store brand consumers in the market. This reduces their supplier power in the market.
The threat of substitute products in the market is very high as the increasingly developing and well marketed store brands provide an attractive appeal to the consumers in the market as opposed to the much expense private label brands produced and distributed by the major food makers. These products are exactly similar to the ones provided by the major food makers except for the premium value added attribute and the premium price that is added to the private label brands.
The information depicted in the article provides that the rivalry in the market is very competitive, where the private label brands are competing with each other to access the same consumers in a market which is shrinking in the face of recessionary pressures. Similarly the private label brands are also competing with the store brands which increasing competition and rivalry in the market.
The threat of new entrants in the market is limited as the market is already saturated with the presence of the store brands and the private label brands, which prevents new food makers to provide additional grocery and food brands in the market. However the general, super market , departmental and hypermarket stores like Wal-Mart, Carrefour, Marks and Spencer’s, Bloomingdales etc, can introduce their own lines of store brands which can act as substitute products for the private label brands.
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