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Product
Analysis
Category Competitor Customer Demand
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1. Aggregate Category Factors
2. Category Factors3. Environmental Factors
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a) Category Sizeb) Category Growth
c) Stage in the PLCd) Sales Cyclicitye) Seasonalityf)
Profits
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Stage ofproductlife cycle
Categorysize
Categorygrowth
Category
attractiveness
Introduction
Small
Low
Low
Growth
Moderate
High
High
Maturity
Large
Low
Low/high
Decline
Moderate
Negative
Low
Sales
Time
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High Low
Size
Large Small
Growth High Slow
Stage in life cycle Early Late
Cyclicity Low High
Seasonality Low High
Marketing spending Low High
Profits High Low
AttractivenessMarket Factors
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Threat of New Entrants Bargaining Power of Buyers
Bargaining Power of Suppliers Amount of Intra-category Rivalry
Threat of Substitute Products or Services Category Capacity
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Amountof Intra Category
Rivalry
Bargainingpower ofsuppliers
Threat ofsubstituteproduct /services
Bargainingpower of
buyers
Threat ofnew entrants barriers to
entry
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High Low
Power of buyers Low High
Power of suppliers Low High
Rivalry Low High
Pressure from substitutes Low High
Capacity utilization High Low
Threat of entry Low High
AttractivenessCompetitive Factors
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Technological Political
Economic Regulatory Social
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Category Size- More than US $ 1.4 bn snack food market.
Major Players-
Frito Lays ITC (Bingo)
Haldiram
Parle (Hippo)
SM Foods
Garden Hygienic Fun Flips
Regional Players like Balaji, Bikano..
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Category Growth The industry has been growing10% for the last 3
years.
Branded segment is growing around 25% per annum.
Due to Multiplex culture, changing food habits, snacking at home
while watching TV, pubs andbars (where they are served free).
Market Attractiveness: (+)
Sales Cyclicity Prices are such that they do not get impacted
directly with the variations in income.
No direct affect due to changes in income so it has more
attractiveness.
Seasonality Year round Sales.
Sales increase in the Holy festival seasons specially near
Diwali, as people tend to purchasesnacks as gifts.
Market Attractiveness: (+)
Profits Less production cost.
High advertisement cost and packaging cost.
Market Attractiveness: (-)
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Threats of New Entrants- High Capital required.
- Strong distribution network.
- Large number of intermediaries.
- Low availability of adequate infrastructural facilities.- High
inventory carrying cost, High packaging cost.
- High competition.
- Huge Market & Lack of Differentiation, differentiation is
largely through
the brand, flavour, style, shape.
Market Attractiveness: [-]
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Supplier Power- Large number of suppliers but supply is
limited.
- High demand.
- High competition.
Market Attractiveness: [-]
Threat of Substitutes- Close substitutes from big players.
- Same products from same sector.
- Also other substitutes like biscuits, toffees etc.Market
Attractiveness: [ - ]
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Buying Power- No bulk purchase.- Buyers are fragmented.- Liking
for special flavour.
- Prices are fixed.Market Attractiveness: [+]
Degree of Rivalry- large no. of firms.
- low switching cost.- High storage cost and highly perishable
product.- Low level of product differentiation.- Personal
rivalries.Market Attractiveness: [-]
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Economical- All income groups are favorable for the
Industry.
Market Attractiveness: [+]
Political Factors / Regulatory- The Ministry acts for bringing
in greater investment into this sector,
guiding and helping the industry in a proper direction and
creating a
conducive environment for the healthy growth of the food
processing
industry.Market Attractiveness: [+]
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Technological factors- Need of modern technology to enhance the
production and the quality.
- So many quality restrictions.
Market Attractiveness: [-]
Social/ cultural factors- Change in lifestyle.
- Change in eating habits.Market Attractiveness: [+]
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To analyze competitors, a commitment todeveloping a competitive
strategy that
includes a willingness to expend resources oncollecting data is
necessary
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COMPETITORS
Direct
Close
Substitute
Indirect
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Differential Competitoradvantage analysis
PRIMARYDATA
SECONDARYDATA
Who are they?What are the competing
product features?What do they want?
What is their current strategy?
What are they going to do
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SECONDARYDATA
CustomerCommunications
InternalSources Local NewsPapers
Patent Filings
Annualreports
BusinessPress
Government
News Release
Trade
Associations
PromotionalLiterature
Internet
Consultants
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PRIMARYDATA
CustomerCommunications
InvestmentBankers
Sales Force
Suppliers
Customers
Employees
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OtherSources
Monitoring testsMarkets
Help wantedads
Trade Shows
Plant tours
Reverse
engineering
Hiring KeyEmployees -
Poaching
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Marketing strategy
Comparing value chains
Marketing mix
Pricing
Promotion Distribution
Product/Service capabilities
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