5 Porter Forces for the Kit Kat-Free-Samples-Myassignmenthelp.com

Question: Analysis the 5 Porter Forces for the kit kat Case Study. Answer: Background This report focuses on the five forces analysis of the famous Chocolate named KitKat. This is the famous product of well-known company Nestle. In UK, KitKat is the largest selling chocolate brand in the country. The chocolate is manufactured and marketed by Nestle and now it is leading product in the country. KitKat has very strong brand image which allows Nestle deal with high level of competition in the market which non-price competition strategy. Focusing on Nestle, it is the largest food company in all over the world. The company knows that the meaning of good food is different for every customer so it provides the products depends upon their culture and their purchasing habits (Nestl, 2014). So, Nestle decided to maintain the long term real price of KitKat bar. This report focuses on the industry analysis of KitKat bar based on the given case study. For this manner, five forces analysis of KitKat is described below. Porter Five Forces By the Five forces analysis of KitKat, the feasibility of the product can be determined effectively. In the Porters five forces model, there are basically five areas or forces that could analyze the profitability of the product i.e. threats of new entrants, rivalry among the companies, threats of substitutes, bargaining power of suppliers and bargaining power of buyers (Fifield, 2012) Figure 1: Porter's five forces (Source: Kotler Keller, 2016) Bargaining power of suppliers KitKat is the product manufactured by Nestle which is establishing and sustaining strong relationship with the suppliers across the world. Due to positive buying behavior of KitKat in UK market and the supply of the agricultural commodities, the company holds more bargaining power then the suppliers. For the long growth of KitKat, the company creates long term relationship with its suppliers as it is helpful to make sure the excellence of raw material for sustainable production of chocolate. Along with this, Nestle also provides helpful suggestion to the suppliers like how to perform more professionally to reduce the pointless costs (Dalman Min, 2014). Bargaining power of buyers Customers have high bargaining power related to the expenditure of KitKat as there are very close alternates of this product which permits for the choices of the customers to be very important. The brand KitKat understands the power of the customers and that is the reason it has taken important steps to meet the demands and requirements of the customers. Basically, the product is also incorporating the wellness and health of the customers as the society has also started caring about their health (Martnez, 2012). Threats of substitute products Because of the nature of food industry, KitKat is affected by the threats of substitute products. That is the reason, the company is finding new tactics to enhance its products and generate new resources of growth for the future development. There are various products provided by competitors at the affordable prices. In current time, the company has also focused on the wellness and health aspects of the products so that the competitive position can be maintained in the market (Kotler Keller, 2016). Threats of new entrants The vital factor of success is the number of competitors presented in the industry who participate for achieving the share of industry profit. The number of competitors depends upon the size of the industry. The entry barriers are technological and economic forces which impact on the new entrants. In case of KitKat, the food market of UK is very big and can hugely attract to the new entrants. The food processing industry is very large and competitive and there are many companies along with the products that are entering in the market every year to gain big portion of the profitable market. Kitkat luckily has been the leader of UK market and providing customer satisfaction to gain considerable share of the market. That is the reason, it has become challenging for new entrants to enter in the industry and compete with the brand product like KitKat. As the result, threat of new entrants is moderate in the industry (Turnbull Valla, 2013). Competitive rivalry It is mentioned above that the food and beverage industry is highly competitive industry. Nestle is the powerhouse in the food processing industry but there are so many companies producing chocolate bars. All of those companies are in the constant battle to outperform one another. In the food and beverage industry, there is intense rivalry among the companies but this is the good thing for the customers because they always enjoy new product lines (Nigel, 2012). As described above, there is strong competition in the food and beverage industry and this is the main threat for KitKat. Competitors are key providing similar product to the customers to achieve large market share. The largest international competitors of Nestle are Kraft Foods, PepsiCo, Mars and Unilever as well. Along with this, company also facing strong competition in the local market or specific product ranges from various companies of UK including Cadbury, Sara Lee etc (Srivastava Thomas, 2010). Conclusion The Porter five forces model provides a competitive but beneficial market analysis for the food and beverage industry. Along with this, the analysis provides KitKat a competitive position within the industry by recognizing threats of market share, threats of new entrants into the market and the threats of substitutes of products. Along with this, this model reveals that KitKat tend to have more bargaining power over its suppliers because the products supplied by the suppliers are easily available in the industry. Further, customers have high level of bargaining power as Kitkat must focus on the needs and wants of the customers as there are many close substitutes of the chocolate. In case of final force, there is strong rivalry among the companies available in the market. References Dalman, M., Min, J. (2014). Marketing Strategy for Unusual Brand Differentiation: Trivial Attribute Effect. 6(5) Fifield, P., (2012). Marketing strategy. (2nd). Berlin: Reed educational publishing Pvt Ltd https://businesscasestudies.co.uk/nestle/long-term-maintenance-of-a-classic-brandname/introduction.html#axzz35ZISr0oy Kotler P., Keller, (2016). Marketing Management. (15th). AUS: Pearson Education Martnez, P., (2012). The Consumer Mind: Brand Perception and the Implications for Marketers. USA: Kogan Page Ltd Nestl. (2014). Long term maintenance of a classic brand name. Retrieved on 26th November 2017 from Nigel,P., (2012). Market-Led Strategic Change. (3rd). Routledge publishers. Srivastava, R., Thomas, G. (2010). Managing brand performance: Aligning positioning, execution and experience. 17(7). 465-471 Turnbull, P. W., Valla, J. P., (2013).Strategies for international industrial marketing. USA: Croom Helm