case Ready to Eat
1 Why Industry Ready-to-Eat cereal been such a profitable business? What changes have led the industry to a "crisis"?
Through an analysis of Porter's 5 Forces focused on competitors, we highlight the elements that determine profitability:
The suppliers of this industry would be cereal farmers who do not have much power as this product is a commodity. So any provider is easily replaceable.
Customers must breakfast and this is a very good option, are hamstrung against price changes
The barriers are high for market concentration and cost and commitment that involves the installation of a processing plant with capacity required.
Surrogates have, despite the redundancy, have a low degree of substitution, but for the desmerecidos private label cereal started to gain significant market share and compete significantly.
Competition is tough in almost 100 years have not significantly changed market shares among the big three, as shown in Annex 1 While the market volume grew by 3% per year led by the incorporation of multivitamins contributions, the appearance the pre-sweetened and the tendency of 80 opt for natural cereals. Profit margins are between 15% and 30%. This was explained by the high market concentration and almost no entry of new brands, led by the big three. Some assumptions of collusion and undue argued cooperation in order to maximize profitability and protect the sector, such as an agreement to bring toys and awards a mark at a time, not vitaminación to incorporate new product lines and limit business dealings with wholesalers to favor anyone. If anyone violated this agreement the other companies would imitate the behaviors escalate initiating large investments and high costs that would annihilate the utilities sector, so they tried to stay away from this scenario.
All these aspects make this industry is a highly profitable business within that scenario.
The changes that have taken this industry to a crisis situation, is the
Through an analysis of Porter's 5 Forces focused on competitors, we highlight the elements that determine profitability:
The suppliers of this industry would be cereal farmers who do not have much power as this product is a commodity. So any provider is easily replaceable.
Customers must breakfast and this is a very good option, are hamstrung against price changes
The barriers are high for market concentration and cost and commitment that involves the installation of a processing plant with capacity required.
Surrogates have, despite the redundancy, have a low degree of substitution, but for the desmerecidos private label cereal started to gain significant market share and compete significantly.
Competition is tough in almost 100 years have not significantly changed market shares among the big three, as shown in Annex 1 While the market volume grew by 3% per year led by the incorporation of multivitamins contributions, the appearance the pre-sweetened and the tendency of 80 opt for natural cereals. Profit margins are between 15% and 30%. This was explained by the high market concentration and almost no entry of new brands, led by the big three. Some assumptions of collusion and undue argued cooperation in order to maximize profitability and protect the sector, such as an agreement to bring toys and awards a mark at a time, not vitaminación to incorporate new product lines and limit business dealings with wholesalers to favor anyone. If anyone violated this agreement the other companies would imitate the behaviors escalate initiating large investments and high costs that would annihilate the utilities sector, so they tried to stay away from this scenario.
All these aspects make this industry is a highly profitable business within that scenario.
The changes that have taken this industry to a crisis situation, is the