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Essay / Research Paper Abstract
This 6 page paper considers the position of the suppliers to UK supermarkets including Tesco, Asda and Sainsbury’s and uses Porters Five Forces model to identify strategies that may be used in this awkward situation and sites real examples of strategic reactions. The bibliography cites 5 sources.
Page Count:
6 pages (~225 words per page)
File: TS14_TEsuper1.rtf
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Unformatted sample text from the term paper:
use of this power is being used to reduce the process paid to the food supplies or to increase the demands that are made regarding the products. For larger food
retailers, such as Heinz, each supermarket is a purchaser and forms a lower percentage of their sales that for a smaller supplier that may deal only with one or two
supermarkets. A tool that can be used to assess this is Porters Five Forces model, which shows the way that food companies are seeking to adapt to the changing marketplace
and counter the balance of the supermarket power. The five forces Porter identifies are the existing competitors, the threat of new entrants,
substitute products (or services), and the power of purchasers and suppliers. Porter does not see these external factors as working alone, they act in relationship to each other, and can
also be influenced by the organisation which the effect, in understanding them the organisation is in the best position to influence them (Thompson, 1998).
The traditional order is to consider the competitive environment first. However, in this we will analysis the factors in a different order. The main issue is that owner
if the buyers. The food suppliers sell to the supermarkets. As they sell a large proportion of their goods to a single buyer this places a large amount of power
in the buyers hands. In a recent survey in the UK 72% thought that the power was so disproportionate and asymmetric that government intervention was required in order to restore
some fairness to the relationship (Grocer, 2000). This had increased from 49% (Brown and Hunt, 2000). One recent example may be seen in
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