netrashetty
MP Guru
The Bemis Manufacturing Company is based in Sheboygan Falls, Wisconsin and is best known for its toilet seat products. Bemis also manufactures suction canisters, sharps containers, gas caps, gauges, fluid management systems, and various contracted plastic parts from extrusion and injection molding for companies such as John Deere and Whirlpool Corporation. The company is a pioneer of coinjection molding, a process in which virgin resin is injected with scrap plastic.[1] Bemis' plastic work has won a number of awards in the SPI Structural Plastics Div. design competition, particularly with the John Deere 7000 tractor, which is believed to represent the first instance of coinjection molding "to large parts where a recycled engineering material (ABS) is used in the core
Industry Competitors
Concentration, fixed or variable costs, differentiation, capacity, pricing, behaviour and market and company growth are some of the factors considered in this force. First, there is a need to identify Grace’s Cuisine competitors. In their kind of business, the concentration of rivals is very large. Rivalry tends to intensify as the number of competitors increases and as they become more equal in size and capacity. Therefore it can be said that the intensity of rivalry in the restaurant and food industry where Grace’s Cuisine belongs is very stiff. Also in this force, rivalry is usually stronger when demand for the product is growing slowly, as is the case of the restaurant and food industry. Rivalry is likewise more intense when competitors are tempted by industry conditions to use price cuts or other competitive weapons to boost unit volume and is also stronger when the products and services of competitors are so weakly differentiated that customers incur low costs in switching from one brand to another. Further, rivalry increases in proportion to the size of the payoff from a successful strategic move and becomes more volatile and unpredictable the more diverse the competitors are in terms of their strategies, personalities, corporate priorities, resources, and countries of origin. The above conditions all apply to the arena of restaurant and food industry where Grace’s Cuisine plays, thus the bigger need for the firm to focus on strategic management in order to gain competitive advantage over their competitors.
Potential Entrants
According to Davies & Lam (2001), barriers to entry are related to economies of scale, the existence of learning and experience curve effects, brand preferences and customer loyalty, capital requirements, cost disadvantages independent of size, access to distribution channels and government actions and policies. The economies of scale, for instance, implies that the more scale economies, the less threat of entry in that if entrant cannot quickly get large market share, it will have a major cost disadvantage. Incumbent can additionally threaten to increase output and cut price. Access to distribution channels will prove harder for those who want to enter the industry. As the incumbents have already cornered the more common distribution channels, it will be difficult to both compete with the already established chains in the distribution channels and look for new channels with which to dispense of the products.
Buyers
Davies & Lam claims that the leverage and bargaining power of customers tend to be relatively greater when customers are few in numbers and when they purchase in large quantities and when customers’ purchasers represent a sizable percentage of the selling industry’s total sales. In the restaurant and food industry, the number of customers is very large, and often, they prefer to go in supermarkets and cook their own food instead of going to restaurants. From this alone it can already be said that the bargaining power of consumers in weak.
Suppliers
A group of supplier firms has more bargaining power when the input is, in one way or another, important to the buyer and when the supplier industry is dominated by a few large producers who enjoy reasonably secure market positions and who are not beleaguered by intensely competitive conditions (Davies & Lam 2001). In Grace’s Cuisine kind of industry, they don’t have an advantage of being able to dictate the price that they are willing to pay the supplier. Additionally, when the suppliers’ respective products are differentiated to such an extent that it is difficult or costly for buyers to switch from one supplier to another and when the buying firms are not important customers of the suppliers, supplier power increases.
Substitutes
The price and availability of acceptable substitutes for a product places a ceiling on the prices which the producers of that product can charge, and unless the sellers of a product can upgrade quality, reduce prices via cost reduction, or otherwise differentiate their product from its substitutes, they risk a low growth rate in sales and profits because of the inroads substitutes may make. In the restaurant and food industry, as mentioned above, there is a large number of competitors. This amount of rivalry is the main force that drives the prices of all companies in the industry down. For example, other restaurants and these are mostly food chains can match the low prices that Grace’s Cuisine offers in the market and even equal the quality of the products that they offer, making the substitute force high in the restaurant and food industry where Grace’s Cuisine operates. Further, the competition from substitutes is affected by the ease with which buyers can change over to a substitute, a key consideration being that usually the buyers switching costs—the one-time costs facing the buyer in switching from use of a product over to a substitute for it, is low. Since switching from one chain to another will create a relatively low cost or fuss for the consumer, the substitute force in the industry is relatively high. This opens an avenue for Grace’s Cuisine to improve quality and differentiate from their competitors while driving down costs at the same time.
Industry Competitors
Concentration, fixed or variable costs, differentiation, capacity, pricing, behaviour and market and company growth are some of the factors considered in this force. First, there is a need to identify Grace’s Cuisine competitors. In their kind of business, the concentration of rivals is very large. Rivalry tends to intensify as the number of competitors increases and as they become more equal in size and capacity. Therefore it can be said that the intensity of rivalry in the restaurant and food industry where Grace’s Cuisine belongs is very stiff. Also in this force, rivalry is usually stronger when demand for the product is growing slowly, as is the case of the restaurant and food industry. Rivalry is likewise more intense when competitors are tempted by industry conditions to use price cuts or other competitive weapons to boost unit volume and is also stronger when the products and services of competitors are so weakly differentiated that customers incur low costs in switching from one brand to another. Further, rivalry increases in proportion to the size of the payoff from a successful strategic move and becomes more volatile and unpredictable the more diverse the competitors are in terms of their strategies, personalities, corporate priorities, resources, and countries of origin. The above conditions all apply to the arena of restaurant and food industry where Grace’s Cuisine plays, thus the bigger need for the firm to focus on strategic management in order to gain competitive advantage over their competitors.
Potential Entrants
According to Davies & Lam (2001), barriers to entry are related to economies of scale, the existence of learning and experience curve effects, brand preferences and customer loyalty, capital requirements, cost disadvantages independent of size, access to distribution channels and government actions and policies. The economies of scale, for instance, implies that the more scale economies, the less threat of entry in that if entrant cannot quickly get large market share, it will have a major cost disadvantage. Incumbent can additionally threaten to increase output and cut price. Access to distribution channels will prove harder for those who want to enter the industry. As the incumbents have already cornered the more common distribution channels, it will be difficult to both compete with the already established chains in the distribution channels and look for new channels with which to dispense of the products.
Buyers
Davies & Lam claims that the leverage and bargaining power of customers tend to be relatively greater when customers are few in numbers and when they purchase in large quantities and when customers’ purchasers represent a sizable percentage of the selling industry’s total sales. In the restaurant and food industry, the number of customers is very large, and often, they prefer to go in supermarkets and cook their own food instead of going to restaurants. From this alone it can already be said that the bargaining power of consumers in weak.
Suppliers
A group of supplier firms has more bargaining power when the input is, in one way or another, important to the buyer and when the supplier industry is dominated by a few large producers who enjoy reasonably secure market positions and who are not beleaguered by intensely competitive conditions (Davies & Lam 2001). In Grace’s Cuisine kind of industry, they don’t have an advantage of being able to dictate the price that they are willing to pay the supplier. Additionally, when the suppliers’ respective products are differentiated to such an extent that it is difficult or costly for buyers to switch from one supplier to another and when the buying firms are not important customers of the suppliers, supplier power increases.
Substitutes
The price and availability of acceptable substitutes for a product places a ceiling on the prices which the producers of that product can charge, and unless the sellers of a product can upgrade quality, reduce prices via cost reduction, or otherwise differentiate their product from its substitutes, they risk a low growth rate in sales and profits because of the inroads substitutes may make. In the restaurant and food industry, as mentioned above, there is a large number of competitors. This amount of rivalry is the main force that drives the prices of all companies in the industry down. For example, other restaurants and these are mostly food chains can match the low prices that Grace’s Cuisine offers in the market and even equal the quality of the products that they offer, making the substitute force high in the restaurant and food industry where Grace’s Cuisine operates. Further, the competition from substitutes is affected by the ease with which buyers can change over to a substitute, a key consideration being that usually the buyers switching costs—the one-time costs facing the buyer in switching from use of a product over to a substitute for it, is low. Since switching from one chain to another will create a relatively low cost or fuss for the consumer, the substitute force in the industry is relatively high. This opens an avenue for Grace’s Cuisine to improve quality and differentiate from their competitors while driving down costs at the same time.