It significantly reduces the window of extraordinary profits for the new firms thus discourage new players in the industry.Īll most all the companies in the Processed & Packaged Goods industry buy their raw material from numerous suppliers. New entrants are less likely to enter a dynamic industry where the established players such as Kellogg Company keep defining the standards regularly.
Porter Five Forces focuses on - how Kellogg Company can build a sustainable competitive advantage in Processed & Packaged Goods industry. Porter Five Forces is a holistic strategy framework that took strategic decision away from just analyzing the present competition. These five forces analysis today in business world is also known as -Porter Five Forces Analysis. In his revolutionary article - "Five Forces that Shape Strategy", Michael Porter observed five forces that have significant impact on a firm's profitability in its industry. Kellogg Company is listed at New York Stock Exchange (NYSE) and have a market cap 25.61B USD. Over the years Kellogg Company has redefined the ways of doing business in Consumer Goods. Kellogg Company is one of the leading firms in the Processed & Packaged Goods. Kellogg Company managers can use Porter Five Forces to understand how the five competitive forces influence profitability and develop a strategy for enhancing Kellogg Company competitive advantage and long term profitability in Processed & Packaged Goods industry. Porter Five Forces Analysis is a strategic management tool to analyze industry and understand underlying levers of profitability in a given industry.
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