Strategic Process Management – Nabisco

Porter has identified five (5) competitive forces that shape every industry and every market. The forces determine the intensity of competition and hence the profitability and attractiveness of an industry. Based on the information derived from this analysis, management can decide how to influence or to exploit particular characteristics of this industry.

Competitive environments are defined by the identity, track record, financial strength and market share of key competitors. Harvard Professor Michael Porter 's Five Forces model can be used to evaluate a company 's competitive position. These five forces are barriers to entry (the ability of new players to enter the market), buyer power (the ability of customers to influence price),

This article has started revolutionary thinking about what are the different forces in addition to direct competitors that affect competitive strategy of an organization and how better understanding of industry structure and these forces, also known as " Porter 's Five Forces", derive organization 's strategy to achieve sustainability and higher profitability. Author has explained the other factors that contribute for industry structure like industry growth rate, technology and innovation, external factors, government & regulations and complementary products and services. Industry structure changes while responding to changes in competitive forces. Author also discussed the framework to perform industry analysis and avoid common pitfall while conducting analysis. In this review I will summarize five competitive forces explained by Micheal E. Porter and their implication on organization 's strategy. Further, I will discuss the relevancy of Porter 's five forces framework in current scenario.

The intensity of rivalry, which is the most obvious of the five forces in an industry, helps determine the extent to which the value created by an industry will be dissipated through head-to-head competition. The most valuable contribution of Porter's “five forces” framework in this issue may be its suggestion that rivalry, while important, is only one of several forces that determine industry attractiveness.

The five forces examines the dynamics within an industry. Understanding the competitive forces, and their underlying causes, reveals the roots of an industry’s current profitability while providing a framework for anticipating and influencing competition and profitability over time. Understanding the structure of its industry is also essential to effective strategic positioning.

The company's products, to me, appear to fall in the areo of Product Maturity. Basically because the products that are made and sold are not new; however, because the items are already baked and packaged, they offer convenience to customers who do not have the time to mix ingredients and bake it themselves. Also, for thos who have no cooking skills, it offers and easy way to acquire the snacks.

In 1898, through the merger of the midwestern American Biscuit Company, eastern New York Biscuit Company, and the United States Baking Company, Nabisco was established. In 1941 the company finally adopted the name Nabisco which was already a popular nickname for the company, before then it was called N.B.C. The chairman of the N.B.C. was Adolphus Green, who emphasized standardized products, all bakeries had the exact same recipes and standards of production. Through this N.B.C. developed products that could be nationally recognized. All the merchandise is marked with a distinct emblem, an oval with two bars across it. Which Green found in a medieval Italian printers’ mark catalog, which is said to represent the triumph of good over evil. In 1912 the first Oreo was invented, which looked very similar to the one we enjoy today. How did Oreo get its name? Some say it came from the french word for gold “or’ which was the main color of the packaging. Others say it was named from the Greek word for mountains, because of the hill-shaped test version. Others say it was a combination of cream (“re”) and chocolate (the two “o”s) creating o-re-o’s. In 1975 the company invented a new Oreo, the double stuff Oreo. Nabisco continued creating variations of the Oreo, in 1987 fudge covered Oreos, in 1991 halloween Oreos, and in 1995 Christmas Oreos were invented. Since then over 362 billion Oreo cookies have been sold in the United States. Oreo has become the

But Firstly, we will start this part by talking about the importance of a deep analysis of the industry’s structure. A deep knowledge of the industry the company is in, is extremely important. The industry structure is unique and varies from industry to industry of course. It will determine the level of competitiveness and attraction of the industry. With the Five Forces model (Porter) and PESTEL (Political, Economic, Social, Technological, Environmental, Legal) analysis, the organization will get a better understanding of the market will allow you to know the requirements for the possible creation of sustainable competitive advantages and take the right strategic decisions. According to Porter, to create an efficient competitive strategy, it is important to understand the rules of competition that determine market attractiveness.

Defining an industry can be described as drawing a line between the established competitor and the substitute products offered by competitors outside the industry (Porter 1998). “Porter’s five forces provide a framework for an industry and business strategy development to drive the five forces that determine the competitive intensity and attractiveness of a market. The Porter’s Five Forces model helps identify where improvement can be made regarding competitive forces, threat of potential entrants, bargaining power of buyers, and bargaining power of suppliers and threats of substitute products.

One thing that the company is doing to address the issue introducing a new line of products that will fit the wellness market. The new products will include electrolyte drops that will help consumers refill their electrolytes in their bodies, and there would also be new wellness supplements products. Mr. Silk, whom is the former president of National Foods had this to say about the new line “Our hope is to build a broader, more compelling, more relevant relationship with consumers”

Brand building, consumer health and wellness, and advertising and promotions were all critical to success in the industry. Kraft’s ability to compete with lower priced snacks showed its ability to differentiate itself from other lower priced competitors.

An external analysis looks at the general macro environment and industry attractiveness. A PESTEL analysis will be used to look at the macro environment and Porter’s Five Forces framework will follow to provide a clearer picture of industry attractiveness.

Porter’s five forces model is used to assess the Industry in which UFS operated in. With this analysis, overall attractiveness of the industry is addressed. To do so, Porter’s criteria of industry attractiveness should be assessed, namely, the threat of new entrants, threat of substitutes, bargaining power of buy and supplier and the competitive players. Based on these criteria, the attractiveness is mapped onto the radar chart. This way, a brief view of industry attractive can be surmised by a simple Likert scale.

Porter's Five Forces can be applied to particular companies, market segments and industries with the step-by-step analysis of market structure and competitive situation. First of all, when implementing this module in organizations, it is necessary to determine the scope of the market to be analyzed. Following, all relevant forces for this market analyzed and key forces are identified (Gerry and Kevan, P.117). Actually some organizational strategy and the longer-term goals are mainly based on or consistent with the key forces. Hence, it is not necessary to analyze all elements of all competitive forces with the same depth. Moreover, the key forces in the competitive environment will vary in different industry. Different forces take on prominence in shaping competition in each industry (Porter,

This article summarizes the key ideas and gives an overview of how this concepts works. Describes, how this five competitive forces shape every organization and every market. Summarizes how these forces will define the power of profitability, competitiveness, and attractiveness of the industry. Depending on the facts which is derived from the five forces analysis, the management of organizations will decide how to effect or abuse specific features of their industries.