What Is Porter's Five Forces In The Brewing Industry

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2. Assess the European brewing industry using Porter’s Five Forces analysis. Michael Porter is one of the outstanding (international) consultants to business farms and governments. His latest book The Competitive Advantage of Nations has been called "brilliant" by some and "nothing new" by others. While the implications for present policy will continue to be debated, Porter's work does provide the business historian with a powerful paradigm and set of tools for considering business in history. Why are some firms successful and other not? Why do some nations seem to specialize in certain industries with lots of competitors, while other nations do not seem to know that an industry exists? Porter provides ways of thinking about these types…show more content…
The power of suppliers. Suppliers are those who supply the organisations what they need in order to produce the products or provide specific services. Except for raw materials amd equipment, it includes labour and finance. The factors that may increase supplier power are, obviously, opposite to those that, generally, increase the power of buyers. Suppliers may have more power if: they are in concentrated numbers compared to buyers; there are high switching costs associated with a move to another supplier; they are able to integrate forward or begin producing the product themselves; they have specific expertise or technology needed to manufacture goods; their product is highly differentiated; there are many buyers and none make up significant portions of sales; there are no substitutes available; there are strong end users who can exert power over the organization in favour of a supplier (This can be the case in labour situations). [Marc. (2014). Bargaining Power Of Suppliers | Porter’s Five Forces Model. Available: http://www.entrepreneurial-insights.com/bargaining-power-of-suppliers-porters-five-forces/] Well-known examples of strong suppliers are: DeBeers – dominates the diamond market; Microsoft – practically dominates the market for personal computer operating systems; Intel & AMD – dominate the market for processor chips; Cargill & Monsanto – dominate the agricultural seed production market. Whilst some industries do have dominant suppliers this is not the case for all. In industries where the product is standardized you are likely to find a large number of competitive suppliers. The food processing industry is a good example of this because agricultural produce can be bought from a variety of suppliers, both large and small. This is the same for any market involving commodity products. [(2003). Bargaining Power of Suppliers. Available:
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