Porter Five Forces Food Industry

Porter Five Forces Food Industry
 Competition among Competitors:
In food industry competition is likely high, thus firms in this category prioritize on
gaining a competitive advantage by using one of the ways that could be the change
in prices, to focus of differentiating the product and bring its improvements, to
make use of creative channels of distribution and also to exploit the relationship
with suppliers. Rivalry is automatically increased when the firms are competing
with the same customers. E.g. Nestle Pakistan, Dalda Foods, Mair Foods,
Murree Brewery, National Foods, Shan Foods, Omore, Haleeb Foods, collegg,
engro foods etc,
 Bargaining power of Buyers:

Nestle provide the best and most reliable food and beverage products to meet
theirneeds throughout the day, throughout the life. They are often reassured that
they willfind well-known brands out of home. This statement also reflects the
image of highquality products that Nestle offers. Nestle has the advantage that
it offers completerange of high quality ingredients, base products and meal
components, as well asleading consumer brands such as Nescafe, MilkPak and
pure life. Quality is thecornerstone of the success of the Nestle Company.
Every day, millions of people allover the world show their trust in the company
by choosing Nestle products. This trustcomes from a quality image that has been
built up for over a century. Therefore, the quality of the products ultimately
enhances the quality of the consumer’s life. Nestle has proven this ability a
number of times by introducing new products that wererequired by consumers.
Especially, the launch of Nestle Pure Life in Pakistan proves theaccuracy of this
fact. In Pakistan, there was a need for safe and healthy drinking waterand Nestle
responded to this consumer need by introducing Nestle Pure Life.Building
customer relationship based on customer value and satisfaction is at the veryheart
of modern marketing. The two fold goals of Nestle marketing are to attract
newcustomer by promising to provide high quality product and they maintain
oldcustomers by providing then superior quality products.
 The Bargaining Power of Supliers:
The fruits uses for Nestle products are high in quality and purchase at good rate. Fruits
forNestle are collected from different farms of Pakistan and they are checked by Nestlé’s
best authority officers at International Standards. One of the great suppliers of nestle are
PackagesLimited. Packages Limited is the biggest dealers in Pakistan too many recognize
Companies of Pakistan such as Tetra Pak Pakistan Ltd. They are one of the good
suppliers of the Nestle. As they provide huge product to Nestle that’s why they are
offering good price to the Nestle. Tosum up, we can say that Nestle suppliers are offering
great prices to Nestle as Nestle is well-known company of Pakistan and collect raw
material at high level.
Threat of new competition
The threat towards the entry of a new entrant is very high in case of the food industry.
These are the few companies which are entering in Pakistan to sell their products and
makingprofit. It is quite possible that these companies can shuffle the sale of nestle
or made itcompetitor.
 Minute Maid
 Fresher
 Fruiticana
 Qaswa
 Nutrivita
Threat of substitute products or services:

Nestle product substitute are given by following companies.
Dairy product substitutes
Nestle liquid milk products are MilkPak, Nesvita. There are some companies which
providingits substitute like Haleeb food giving Haleeb milk and Skims. Engro food
private Ltd producesOlper's. In condensed milk nestle giving Everyday for tea milk
and Nido as tea milk. Engro provides “Tarang” as substitute.
Juices Substitute
Nestle produce nectar juices under the brand name. Shezan all pure can be said as
itsubstitute.
Boiled Water
Nestle provide mineral water as brand name pure life. PepsiCo Inc. provides Aquafina
toconsumer as substitute of pure life.
Cereal
Nestle provide Koco Krunch and Cornflakes as their cereal. Kellogs and fauji
provideslarge variety of cereal according to the taste and age group of buyer.

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Porter Five Forces Food Industry

 Competition among Competitors:

 Bargaining power of Buyers:

Threat of new competition

Threat of substitute products or services:

Dairy product substitutes

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