Order custom Harvard Business Case Study Analysis & Solution. Starting just $19
Landec Corporation Porter Five Forces Analysis
Strategic Management Essays, Term Papers & Presentations
Porter Five Forces Analysis is a strategic management tool to analyze industry and understand underlying levers of profitability in a given industry. Landec Corporation managers can use Porter Five Forces to understand how the five competitive forces influence profitability and develop a strategy for enhancing Landec Corporation competitive advantage and long term profitability in Farm Products industry.
Brief overview of Landec Corporation
Landec Corporation is one of the leading firms in the Farm Products. Over the years Landec Corporation has redefined the ways of doing business in Consumer Goods. Landec Corporation is listed at New York Stock Exchange (NYSE) and have a market cap 391.82M USD.
What are Porter Five (5) Forces
- Threat of New Entrants
- Bargaining Power of Suppliers
- Bargaining Power of Buyers
- Threat from Substitute Products
- Rivalry among the existing players.
Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition. Porter Five Forces focuses on - how Landec Corporation can build a sustainable competitive advantage in Farm Products industry. Managers at Landec Corporation can not only use Porter Five Forces to develop a strategic position with in Farm Products industry but also can explore profitable opportunities in whole Consumer Goods sector.
Landec Corporation Porter Five (5) Forces Analysis for Consumer Goods Industry
Threats of New Entrants
New entrants in Farm Products brings innovation, new ways of doing things and put pressure on Landec Corporation through lower pricing strategy, reducing costs, and providing new value propositions to the customers. Landec Corporation has to manage all these challenges and build effective barriers to safeguard its competitive edge.
How Landec Corporation can tackle the Threats of New Entrants
- By innovating new products and services. New products not only brings new customers to the fold but also give old customer a reason to buy Landec Corporation ‘s products.
- By building economies of scale so that it can lower the fixed cost per unit.
- Building capacities and spending money on research and development. New entrants are less likely to enter a dynamic industry where the established players such as Landec Corporation keep defining the standards regularly. It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry.
Bargaining Power of Suppliers
All most all the companies in the Farm Products industry buy their raw material from numerous suppliers. Suppliers in dominant position can decrease the margins Landec Corporation can earn in the market. Powerful suppliers in Consumer Goods sector use their negotiating power to extract higher prices from the firms in Farm Products field. The overall impact of higher supplier bargaining power is that it lowers the overall profitability of Farm Products.
How Landec Corporation can tackle Bargaining Power of the Suppliers
- By building efficient supply chain with multiple suppliers.
- Developing dedicated suppliers whose business depends upon the firm. One of the lessons Landec Corporation can learn from Wal-Mart and Nike is how these companies developed third party manufacturers whose business solely depends on them thus creating a scenario where these third party manufacturers have significantly less bargaining power compare to Wal-Mart and Nike.
Bargaining Power of Buyers
Buyers are often a demanding lot. They want to buy the best offerings available by paying the minimum price as possible. This put pressure on Landec Corporation profitability in the long run. The smaller and more powerful the customer base is of Landec Corporation the higher the bargaining power of the customers and higher their ability to seek increasing discounts and offers.
How Landec Corporation can tackle the Bargaining Power of Buyers
- By rapidly innovating new products. Customers often seek discounts and offerings on established products so if Landec Corporation keep on coming up with new products then it can limit the bargaining power of buyers.
- New products will also reduce the defection of existing customers of Landec Corporation to its competitors.
Threats of Substitute Products or Services
How Landec Corporation can tackle the Treat of Substitute Products / Services
- By being service oriented rather than just product oriented.
- By understanding the core need of the customer rather than what the customer is buying.
- By increasing the switching cost for the customers.
Rivalry among the Existing Competitors
If the rivalry among the existing players in an industry is intense then it will drive down prices and decrease the overall profitability of the industry. Landec Corporation operates in a very competitive Farm Products industry. This competition does take toll on the overall long term profitability of the organization.
How Landec Corporation can tackle Intense Rivalry among the Existing Competitors in Farm Products industry
- By building a sustainable differentiation
- By building scale so that it can compete better
Implications of Porter Five Forces on Landec Corporation
By analyzing all the five competitive forces Landec Corporation strategists can gain a complete picture of what impacts the profitability of the organization in Farm Products industry. They can identify game changing trends early on and can swiftly respond to exploit the emerging opportunity. By understanding the Porter Five Forces in great detail Landec Corporation 's managers can shape those forces in their favor.
You can order Landec Corporation Porter Five Forces & Industry Analysis with us at Fern Fort University.
HBR Case Studies Solutions
- Wyeth Pharmaceuticals: Spurring Scientific Creativity with Metrics case study solution
- Organizational Alignment Exercise case study solution
- Jeri Caldwell at MOEX, Inc.: CEO Dilemma case study solution
- Coordination: An Overview case study solution
- Ludhiana City Bus Services Limited: Pricing for Profits case study solution
Previous 5 Porter Five Forces Analysis
- Snyder's-Lance, Inc. Porter Five Forces Analysis
- Limoneira Company Porter Five Forces Analysis
- LKQ Corporation Porter Five Forces Analysis
- Lindblad Expeditions Holdings, Inc. Porter Five Forces Analysis
- Lifevantage Corporation Porter Five Forces Analysis