AISHWARYA SHETTY

KIRLOSKAR INSTITUTE OF MANAGEMENT

PORTER’S FIVE FORCES OF MODEL
FOOD AND BEVERAGE SECTOR

Bargaining Power of Buyers:

There is high bargaining power of the buyers due to great competitors. Switching
expense is rather low for the consumers as lots of company’s sale a variety of
comparable items. This appears to be an excellent hazard for any company. Hence,
Food and Beverage Industry makes sure to keep its clients satisfied. This has
actually led Food and Beverage Industry to be one of the loyal companies in eyes of
its purchasers.

Bargaining Power of Suppliers:

In the food and drink market, Food and Beverage Industry owes the largest share
of market needing higher number of supply chains. In response, Food and Beverage
Industry has also been worried for its providers as it believes in long-lasting
relations.

Threat of Substitutes:

There has been an excellent hazard of replacements as there are substitutes of

some of the Nestlé's items such as boiled water and pasteurized milk. There has
actually likewise been a claim that some of its items are not safe to use leading to
the decreased sale. Thus, Food and Beverage Industry began highlighting the health
advantages of its products to cope up with the alternatives.

Rivalry among existing competitors:

There is extreme competitors in the industry of food and drinks. Food And Beverage
Industry is one of the leading companies in this competitive industry with a variety
of strong rivals like Unilever, Kraft foods and Group DANONE. Food And Beverage
Industry is running well in this race for last 150 years. Each business has a definite
share of market. This rivalry is not simply limited to the cost of the product
however likewise for quality, innovation and variation. Every industry is aiming hard
for the upkeep of their market share. Nevertheless, the competition of other
business with Food and Beverage Industry is quite high.

Threat of New Entrants: A number of barriers are there for the brand-new entrants
to occur in the consumer food market. Just a couple of entrants be successful in this
industry as there is a need to understand the consumer need which needs time
while recent competitors are aware and has advanced with the consumer
commitment over their products with time. There is low danger of new entrants to
Food and Beverage Industry as it has rather big network of distribution worldwide
dominating with well-reputed image.