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Q.3 The competetion is strong in this industry.With competitors such as Amercian Italian Pasta compnay and Hesrshy Pasta group making up a substantial share of the Pasta sector, Other companies must stay competitively alart.American Italian company formed in 1988 has attractive customers such as mullers Wat Mart and brands that include American Italian , AIPC and Past La Bella. AIPC has managed to stay on top competitively by keeping a strong category management of its brands. Hershy is another top competitors in the industry .They hold about 27 % of the branded segment of the retail pasta market In order to determind what competitive forces make the industry attarctive we need to analyse each competitive force of this industry Competitive Forces Rivalry amont competitors The rivalry among competitors is fierce due to the following reasons • Low cost competiton with the differenc between private and band labels. • Competitors are becoming equal in size • Cost more to get out of business than stay in and compete The fierce rivalry make the this industry unattractive for new entrants. Substitute As there are many substitutes available for customer to choose from substitutes are strong froce in this industry.Customer hav more option with a variety of healthy food with quich preparation to choose.Also retailer can choose to purchase dry pasta from many sources .There situation are strong because there is no significant cost to switch to other substitutes. Strong substitutes force make this industry unattarctive for new entrants. Buyers Buyers are strong in this industry in the sense that they can choose any supplier .Since they buy in large quantities , they can dictate the price as well. There is no significant cost to change supplier,since the price is similar acorss the industry due to intense competition.There are fewer retailer than supplier that ulimately put buyers on the driving seat. Strong force of buyers also makes this industry unattarctive. Supplier There are more supplier than buyers inthe industry .The suppliers have little or no control over the price so they are weak in this industry.They depend on commodity which is highly dependent on weather condition and contain risk of disease.The industry is producing excess capacity and suppliers cant charge high prices of durum wheat to buyer due to intense competition .
Approximate Word count = 1288
Approximate Pages = 5.2
(250 words per page double spaced)
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