Competitive rivalry Essay
The increase in the number of small players in the market and the fact that Finsbury is ever seeking to swallow the performing ones is constantly viewed as unfair competition though the company view it otherwise. Increased competition in the market is fuelling product innovation and better marketing efforts that consolidate the company’s position in the market. The increase in the number of players in the market has in one way or another resulted into product brand extension. Competition in the market has contributed significantly in forming one of the basic strategies of the company of making acquisitions.
The size and growth projections of the market have kept many small players in the market despite poor performance hoping for revival and thereby keep the market relatively crowded. Large chain stores and supermarkets own and operate their own bakeries thus denying Finsbury a share of the market as they have strong brand names. 6. 3 SWOT analysis a. Strength • The growth of UK as a 24 market in major towns favours all marketers and in this case Finsbury where many of its products have relatively shorter shelve life that other major food products
• Intense market research and high product innovation rates
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• Employing of the local community and other considerations of the same has earned the company a lot of corporate appeal. • Running subsidiaries as independent entities allows market segmentation and targeting • Its positioning as a premium products marketer denies customers bargaining power. b. Weaknesses • Lack of a proper environmental policy in the era of “going green” • Producing a wide range of products denies the company specialization benefits • Operation of subsidiaries as different entities results into inefficiency in marketing its products due to duplication in marketing expenditure
• Running many subsidiaries presents management hurdles to the management team in terms of logistics and harmonization of operations • Operating subsidiaries denies the company a stronger corporate brand name • Subsidiaries and the corporate brand name may confuse consumers. • Strong product brand name makes the company a victim of imitation and thus loses its market share. • Some subsidiaries have a weak brand identity in the market c. Opportunities • Increased awareness in health and eating habits provides opportunities for development of new products
• Domestic market is not fully exploited and still lays room for expansion into the rest of Europe. • Running of subsidiaries as independent entities offers better opportunities for growth to the units • The company’s strong corporate brand name can be turned into full market domination • Acquisition of competitors offers the company the chance to monopolize the market and be the price setter d. Threats • Lack of compliance with strict of environmental policy threatens our profitability • The market is overcrowded with low cost product competitors
• Low chances of product differentiation • Increased awareness in eating habits and health • Inflation and the general increase in prices • High levels of marketing and competition • Harsh government polices and regulations • Increased prices of energy and raw materials 7. 0 Resource allocation and value chain analysis Resource allocation seeks to achieve 100% full utilization of available resources. Value chain on the other hand seeks to develop a competitive advantage by identifying activities and processes that add value to the company.
Both of these processes work together in that resource allocation will strive to allocate resources to activities and projects that add value to the company in achieving a sustainable competitive advantage, which is simply a long term competitive advantage. Finsbury dedicates much of her resources into acquiring profitable business ventures in the baking industry to fight competition which adds value to the company and in the long run gives sustainable competitive advantage. 8.
0 Conclusion Finsbury Foods Group has successfully managed to assert itself in the market as the trend setter in the cakes and biscuits industry more so in the cakes market. Many of the products sold in the market are recognised by the individual brand names held by the subsidiaries instead of the corporate brand name of the group. Again, it is notable that the strategic alliance between Lightbody and Thorntons and Disney has played a vital role in the success of the company.
The ultimate success of the group thus stops in forming such strategic alliances and acquiring performing business. This therefore is a worthwhile investment for United Biscuits. Works cited list http://www. finsburyfoods. co. uk, (Accessed on January 4, 2009) http://www. bakersfederation. org. uk/market_snapshot. aspx, (Accessed on January 2, 2009) http://www. just-food. com/store/product. aspx? id=61965, (Accessed on January 4, 2009) http://www. reuters. com/article/pressRelease/idUS122292+15-Apr-2008+BW20080415, (Accessed on January 2, 2009)