Essay About Food Business

Question

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Essay About Food Business

The paper aims to outline the main factors influencing the snack foods industry. It discusses every force of the industry due to Porter’s five forces model. Also, it analyzes the main driving forces of the contemporary snack foods industry. Another point of this paper is to show the dependence of the industry on various factors of the current market. In general, the paper discusses the main tendencies of the snack foods industry. It analyzes the main directions of its development and outlines the importance of customers’ tastes in the manufacturing process of new products.

Introduction

Nowadays, every industry experiences many advantages and disadvantages in the contemporary world of business competition. It is important to outline a company’s benefits in the sphere of its activity. When it comes to building a company’s strategy, it is necessary to evaluate its strengths and weaknesses. Regardless of industry, companies have problems during the process of development. It is impossible to develop without facing issues and trying to solve them. One of the most popular industries is snack foods.

The snack foods industry is a branch of business, which will always be holding a big share of the market. It offers timesaving meals for people with a large variety of tastes. Nowadays, snacks have become an undeniable part of the everyday life of millions of people. However, similarly to any other industry, the snack foods industry has its advantages, disadvantages, and driving forces.

It is necessary to take into consideration all elements of the industry to understand its mechanism. The snack foods industry has many driving forces and its terms of development. It is a complex sphere of activity, which requires much knowledge to hold a leading position. To understand the environment of the snack foods industry, it is important to estimate all its elements.

Porter’s Competitive Forces Effecting on Snack Foods Industry

In 1980, economist Michael Porter introduced a model of five forces, which include rivalry, the threat of substitutes, the threat of new entrants, the power of customers, and the power of suppliers. According to Kasi (2012, n.p.), “Porter’s Five Forces Model is a very important tool to analyze the industrial parameters and to develop a business strategy.” The sphere of snack foods requires quality management and outstanding customer service.

It is a fact that customers will buy only those products, which satisfy their tastes and meet their requirements at all levels. According to Lewis (2013, n.p.), “Food professionals are both customer-centric and analytical.” Moreover, world snack food sales will top a third of a trillion dollars by 2015 (Cantor, 2013).

Rivalry

The snack foods industry has intense competition between companies performing in its main sectors including the sugar market, fruit and nuts market, honey market, as well as cocoa and confectionaries market. The snack foods industry has violent competition, which benefits customers. Consumers are free to choose the same product but from another company. That is why companies should make their products unique and of high quality. It is impossible to survive in the industry of snack foods without constant development. It means that companies do everything to adjust to the changeable tastes of the customers and satisfy their demands.

Threat of Substitutes

The threat of substitutes in the snack foods industry is considerably high due to violent competition. An industry already offers a wide range of products. Companies tend to produce the same products but with some distinctions. However, the success of the company in this industry depends on how fast it will evaluate the tastes of the customer. Companies do everything to make their products unique at some point. It is necessary to create a range of distinguishing features to attract customers.

Snack Food Industry Analysis

There is a threat of new entrants when an industry has many areas for improvement and development. The snack foods industry can hardly accept another company due to the high competition and a large diversity of goods. It means that in the market, there are many companies, which hold a big share of the market and can hardly let a new company grow in the same direction. It is the reason why a threat is low. For a long period, companies have created an appropriate atmosphere for performance. Companies take care of their activity and struggle to increase their profits without letting other companies enter the industry.

Power of Customers

The snack foods industry is a sector, where customers outline the main directions of development. Companies are dependent on the customer’s tastes and requirements. The manufacturing process adjusts to the demands of consumers to satisfy them. Once a customer is not satisfied with the product, he/she will refuse the products and services of the company. It is necessary to not only achieve the appropriate level of product quality but also maintain it at the same level. The success of the company depends on the speed of the prediction of a customer’s tastes. Companies that can quickly evaluate a customer’s needs get a wide range of competitive benefits.

Power of Suppliers

Resources of the company let it form a perfect basement for further developments. In the snack foods industry, companies that can offer a wide range of high-quality goods get to the top list of manufacturers. Companies are interested in building long-term relations with suppliers of high-quality resources. They eagerly seek new responsible suppliers able to help in the creation of competitive benefits. A company cannot exist without high-quality resources.

Driving Forces of the Snack Foods Industry

The snack foods industry has a range of driving forces. Consumers are trying to eat healthier with 71% surveyed claiming to be on a healthier diet (Celentano, n.d.). Customers are interested in buying healthy meals, which can be both tasty and full of vitamins on the go. According to Matthews (2012, n.p.), “Healthy eating is often a challenge.” Today, it is the first reason why companies tend to improve their manufacturing processes. Customers are interested in keeping themselves healthy. It is no longer in fashion to eat food with an enormous amount of fats and sugar. People strive to stick to a healthy lifestyle. It is the reason why companies start making healthy snacks for people involved in wellness.

Another driving force is a balance between development and stability. Companies seek new suppliers of high-quality resources to create innovative goods and attract new customers. It is important to develop and keep the same audience at the same time. Development means the expansion of familiar boundaries. It does not mean a constant change in the target audience.

The next driving force is a constant search for high-quality equipment, which will help to create new outstanding products with the help of new technologies. If a company wants to gain success and improve its performance, it should use innovations and new technologies. Technological progress makes it possible to create unique products with the help of new equipment.

Moreover, another driving force is the pricing policy. Customers can easily buy a similar product from another company due to the intense competition in the industry. It is the reason why products should not only meet the requirements of contemporary customers but also be available for people of different occupations.

According to Hottle (2014, n.p.), “The goal is to help the food industry to understand market segments that are untapped and how to split people into better-defined groups.” All the factors contribute to the development of the industry and create new products able to win the hearts of millions of new customers.

Conclusion

It is essential to mention that any company has its sphere of activity. The snack foods industry requires companies to develop and quickly adjust to the changeable environment. The snack foods industry never waits for companies, which tend to develop at a slow pace. Companies should do everything to satisfy the tastes of the most demanding customers.

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