Competition

Consumer buying behavior is a generic term explains about the consumer choice or preference that they have for a particular product. The juice marked had turned into a competitive market as there are similar competitors in the market serving same type of juice by different brand name. The brand name of fruit juices have changed the consumer preferences because of their easy availability, price, quality, packaging, quality etc. he consumer buying behavior shows a way to the competitors in what respect they can enhance themselves to exist in the market. some of main features were taken into consideration like flavor, availability, price, packaging and the most important “awareness”.

 

Real Fruit Juice vs Tropicana: 

 

Real fruit juice is a rather newer fruit juice and it intends to capture a larger market share slowly and steadily over time. Whereas on the other hand Tropicana is one of the World’s premier fruit juice company and it intends to gain a larger market share in the Indian economy and hence stamp its dominance on the non - carbonated drink industry.

Tropicana's strategic intent is to promote health and wellness and focus on product reformulation. Whereas real fruit juice's intent is to develop its niche business on its strongly laid "ayurvedic" foundation. In the Indian market the market share held by Tropicana is about 30% whereas the market share held by Real Fruit Juice is about 55%. This is largely because of the segmentation and the buying pattern of the Indian consumers. Tropicana is mostly bought by the bachelors and newly married consumers whereas the nutritional value of the Real Fruit Juice has an appeal of betterment of the immune system. This makes it a favorite among mothers lokin after their young ones, employees needing immediate energy and also patients and old age people needing a better health drink to cater to their immunization needs.


Porter's Five Forces:

Michael Porter provided a framework that models an industry as being influenced by five forces. The strategic business manager seeking to develop an edge over rival firms can use this model to better understand the industry context in which the firm operates.

  

Diagram of Porter's 5 Forces

	SUPPLIER POWER  Supplier concentration Importance of volume to supplier Differentiation of inputs Impact of inputs on cost or differentiation Switching costs of firms in the industry Presence of substitute inputs Threat of forward integration Cost relative to total purchases in industry
THREAT OF NEW ENTRANTS  Barriers to Entry Absolute cost advantages Proprietary learning curve Access to inputs Government policy Economies of scale Capital requirements Brand identity Switching costs Access to distribution Expected retaliation Proprietary products		THREAT OF SUBSTITUTES  -Switching costs -Buyer inclination to  substitute -Price-performance  trade-off of substitutes
	BUYER POWER  Bargaining leverage Buyer volume Buyer information Brand identity Price sensitivity Threat of backward integration Product differentiation Buyer concentration vs. industry Substitutes available Buyers' incentives	DEGREE OF RIVALRY  -Exit barriers -Industry concentration -Fixed costs/Value added -Industry growth -Intermittent overcapacity -Product differences -Switching costs -Brand identity -Diversity of rivals -Corporate stakes

  

1. Industry rivalry:

In the traditional economic model, competition among rival firms drives profits to zero. But competition is not perfect and firms are not unsophisticated passive price takers. Rather, firms strive for a competitive advantage over their rivals. The intensity of rivalry among firms varies across industries, and strategic analysts are interested in these differences.

Dabur is the leading brand in terms of the nutritional food companies in the Indian market. Other company;s like Kissan etc have a long way to go to pitch themselves on the lines of Dabur at least in India.


II. Threat Of Substitutes

In Porter's model, substitute products refer to products in other industries. To the economist, a threat of substitutes exists when a product's demand is affected by the price change of a substitute product. A product's price elasticity is affected by substitute products - as more substitutes become available, the demand becomes more elastic since customers have more alternatives. A close substitute product constrains the ability of firms in an industry to raise prices.

Although a threat of substitutes in medium in the case of Real Fruit Juice, those private label products that are being served as "generic" products can pose a serious threat as a substitute.




III. Threat of New Entrants and Entry Barriers

It is not only incumbent rivals that pose a threat to firms in an industry; the possibility that new firms may enter the industry also affects competition. In theory, any firm should be able to enter and exit a market, and if free entry and exit exists, then profits always should be nominal. In reality, however, industries possess characteristics that protect the high profit levels of firms in the market and inhibit additional rivals from entering the market.

However, this have to be understood in terms of a new-to-the-world product, which would change the trends within the industry altogether. There are already so many competitors present in the market that there are very less chances of a new-to-the-world product to enter the market. However, I am not denying of such a thing happening, but given the way this industry has evolved over time and given the current players are performing, it would become difficult for a new-to-the world product to entice consumers.

IV. Buyer Power

The power of buyers is the impact that customers have on a producing industry. In general, when buyer power is strong, the relationship to the producing industry is near to what an economist terms a monopoly - a market in which there are many suppliers and one buyer. Under such market conditions, the buyer sets the price. In reality few pure monopolies exist, but frequently there is some asymmetry between a producing industry and buyers.

Thinking from Real Fruit Juice's perspective, the buyer’s preferences change over time and they are likely to switch to a seller which offers good quality at less price.


V. Supplier Power
A producing industry requires raw materials - labor, components, and other supplies. This requirement leads to buyer-supplier relationships between the industry and the firms that provide it the raw materials used to create products. Suppliers, if powerful, can exert an influence on the producing industry, such as selling raw materials at a high price to capture some of the industry's profits.

The food and beverage industry is quite competitive in nature. The prices offered are usually competitive to remain in the market. The suppliers in the industry do not have much power to drive Real Fruit Juice as a hostage to extract its profits.

However, this model is objectionable because it does not feature customer anywhere in the picture. Therefore, competition as a phenomenon can be understood in terms of the 3C model by Kenichi Ohmae.

The 3C's Model is a business model, which offers a strategic look at the factors needed for success. It was developed by Kenichi Ohmae, a business and corporate strategist.

The 3C’s model points out that a strategist should focus on three key factors for success. In the construction of a business strategy, three main players must be taken into account:
The Corporation
The Customer
The Competitors

Only by integrating these three C’s (Corporation, Customer, Competitors) in a strategic triangle, a sustained competitive advantage can exist. Ohmae refers to these key factors as the three C’s or strategic triangle