Rivalry among competing firms:

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The rivalry between competitors appears when one of them feels threatened by the competition or sees the opportunity to improve their position. The companies are mutually dependent so that when one of the competitors in a certain market starts a competitive movement, a reaction of the other competitors takes place with the intention of counteracting the effects of the first one. This rivalry comes in the form of price competition, advertising, introduction of new products and increase of services offered to customers.

 

The main rivals of the company use social networks as Instagram as their channels of marketing and promotion, also competes directly with some establishments that sell similar concepts to our product. Competes indirectly with other markets like gyms market and coffee stores that have a concept very similar to ours.

 

Threat of new entrants:

 

With the new tendency of people to consume foods or drinks that are healthy and increase their physical performance, the threat of potential competitors in the sector is high since, if the business is doing well, it is very likely that new competitors will arise once it has been established. In order to determine how feasible the entry of a potential competitor to the industry, it is indispensable the analysis of the barriers of entry and exit that characterize it.

 

ENTRY BARRIERS: The main entry barrier for a potential competitor is the capital requirements to start the business.

In this case the access to the distribution channels does not act as a barrier since the channel to be used is direct, that is to say that the company sells directly to the consumer, without intermediaries. On the other hand, the necessary technology is not specialized, reason why its access also could not be considered a difficult barrier.

Finally, the restrictive laws and bureaucratic procedures that should be considered for the production and marketing of the product, new companies must pass all the quality criteria required by law, which could pose a great barrier to some of them.

 

OUTBOUND BARRIERS: There are no important exit barriers for this type of business. It should be considered in the future how high the costs are when you want to finish some established agreement.

 

Threat of substitutes:

 

Substitute products are those that the customer can consume as an alternative since they can perform the same function as those of the sector analyzed. These set the maximum prices that companies in the industry can charge. If the value offered by the substitutes is good, more should concern industry companies for offering a similar relationship and that is done by reducing prices or improving quality. In the case of our company, its main substitute product are nutritional packaged juices based on non-natural inputs that satisfy the same need at a lower price, but without providing the benefits of a 100% natural product.

 

Bargaining power of suppliers:

 

The supply available for the main raw material (fruits), the secondary inputs (proteins and vegetables) and the materials needed to offer the product (Containers, straws, etc.) is very broad and the price is similar, the power of these suppliers being relatively low.

 

As for the machinery to produce the product, the company needs juice extractors and blenders, which are easy to get as they are offered by several companies at relatively low prices.

 

Finally, there is less probability that suppliers will integrate forward because they also supply many more customers and specializing in juices would demand costs and machinery not related to what they are engaged.

 

Bargaining power of consumers:

 

The bargaining power of consumers in this industry is high and covers three aspects:

• On the one hand the Bogotá citizen is traditional and conservative, so it costs him to innovate in his buying behavior. While many companies today sell the idea of product to carry and consume along the way, consumers still prefer to buy an experience.

• On the other hand, although in Bogotá there are very few companies that are exclusively dedicated to being a juice juicer with protein, consumers are surrounded by other alternatives such as ice cream shops, coffee shops or packaged juices. In addition, the product is not of primary necessity and in time of crisis can diminish its demand.

• Finally, buyers pose a real threat of backward integration, since once the product is positioned and successful, other individuals are likely to want to replicate this success. As it is not a business that has many difficulties of income, it is very easy for any individual to enter to compete in the market, thus taking away market share from the company.

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