Competitive Pressures Facing The Fair Trade Food And Beverage Industry Case Study
2. Explain the competitive pressures facing the fair trade food and beverage products industry. What does a five-forces analysis reveal about the nature and strength of the competitive pressures facing Equal Exchange? Which of the five forces is the strongest? Which of the five forces is weakest?
Competitive Pressures Facing the Fair Trade Food and Beverage Products Industry
• Rivalry among Competing Sellers (the strongest)
More and more enterprises are getting involved in the business of fair trade coffee. In the year 2000, there were over 300 companies in the U.S. that provided the fair trade coffee.
The diversity of competitors increases in terms of long-term directions, objectives, and strategies. These companies can be grouped in …show more content…
These are not things Equal Exchange can control.
• Increasing rivalry from local cafes and other coffee enterprises: It is hard to take a position in a large and competitive market like the U.S, especially when other competitors can accept a lower price and more attractive menus.
• Supply disruptions: There are a lot of external factors affecting the supplication, such as political, economic, and environmental conditions.
Equal Exchange has excellently limited external threats and has prepared brilliantly for seizing market opportunities. The company are willing to pay farmers higher prices for flavorful fair trade coffee, and it always pays the minimum price even when the world’s commodities exchanges dropped below the fair trade minimum price. Furthermore, the enterprise help farmers receive pre-harvest loans with affordable short-term interest rates. Regarding worker co-operative model, the governance structure of the company is based on four core rights (to vote, to serve as leader, to information, and to speak one’s mind). That let the employees be more responsibility and have the ability to control their workplace. Also, its marking strategies are quite effective in increasing the public awareness of the fair trade
Competitive Pressures Facing the Fair Trade Food and Beverage Products Industry
• Rivalry among Competing Sellers (the strongest)
More and more enterprises are getting involved in the business of fair trade coffee. In the year 2000, there were over 300 companies in the U.S. that provided the fair trade coffee.
The diversity of competitors increases in terms of long-term directions, objectives, and strategies. These companies can be grouped in …show more content…
These are not things Equal Exchange can control.
• Increasing rivalry from local cafes and other coffee enterprises: It is hard to take a position in a large and competitive market like the U.S, especially when other competitors can accept a lower price and more attractive menus.
• Supply disruptions: There are a lot of external factors affecting the supplication, such as political, economic, and environmental conditions.
Equal Exchange has excellently limited external threats and has prepared brilliantly for seizing market opportunities. The company are willing to pay farmers higher prices for flavorful fair trade coffee, and it always pays the minimum price even when the world’s commodities exchanges dropped below the fair trade minimum price. Furthermore, the enterprise help farmers receive pre-harvest loans with affordable short-term interest rates. Regarding worker co-operative model, the governance structure of the company is based on four core rights (to vote, to serve as leader, to information, and to speak one’s mind). That let the employees be more responsibility and have the ability to control their workplace. Also, its marking strategies are quite effective in increasing the public awareness of the fair trade