Mkg721 | Food Marketing | Assessment Answers

Analyse and interpret data to assess the challenges and opportunities facing an emerging sector of the food industry (e.g. plant-based foods, alternative proteins, "free-from" foods, functional foods, etc.).

Introduction

With the development of food industry, protein shakes market is also developing (Allied Market Research, 2017). There are many tools to analyse the external environment. In this report, Protein shake is taken into consideration to analysis the protein shakes sector whether it will achieve the goal or objectives or not. In the starting of the report, profitability and size of the Protein shakes are discussed. After that, the company external environment is analysis by using Porter's five forces framework.  The recommendation is given for which the industry can improve the market. In the end, the conclusion has been given based on the report.

Description of the industry

Protein shakes in Australia is developing at a CAGR rate of 9%. It is observed that the Australia women demand is increases for the protein shakes. Protein shakes market is set to grow to 45.27 billion. In 2016, 28.37 billion dollar is earned by the market.

(Source: Imarc, 2018)

Protein shakes market has a variety of flavours in the product. It is expected that the protein shake market growing at $3946 million in 2023. Protein shakes is popular just because of their benefits such as manage weight, health and give energy to remain active (Allied Market Research, 2017).

Protein supplement market, 2016-2023 ($Million)

(Source: Allied Market Research, 2017)

Porter’s five forces framework

The threat of new entrants

It has been seen that the protein shakes industry has a high threat of new entrant just because of the low investment in the market. New companies can enter the market with some new qualities. In the present days, people becoming more conscious for their health and they start believing in quality instead of cost which attracts the new companies to enter the market. Government regulation is the only barrier for the new companies to enter the protein market.  Existing protein shakes firms has the high risk of new entrant due to low-cost requirement (Mathooko, and Ogutu, 2015).

Bargaining power of buyer

It has been evaluated that the bargaining power of the buyer is high. It is observed that the nutrients sections of the departmental stores are extended day by day due to the increasing demand of the consumers for the protein shakes. Departmental stores give discount to the consumers which attract consumers more for the product. There are various manufacturing companies those provide the protein shakes on discount. These manufacturers create many options for the consumer to deal with the best choice. A large number of buyers are a reason for the high bargaining power of buyers (Obeng, Luchs, Inman, and Hulland, 2016).

Bargaining power of supplier

It has been analysed that the protein shakes market has the high bargaining power of the supplier because of many manufacturing firms. Protein shakes raw material has very common ingredients which can easily available in the market. There are very few suppliers of the raw material of Protein shakes which increase the bargaining power of suppliers. The firms cannot switch the suppliers of the market because of minimum suppliers in the market (Dobbs, 2014).

Substitutes of the market

It has been seen that the protein shakes industry has a high threat of substitute. Protein shakes market has a high risk from protein bars or Fresh juice. Some people avoid shakes because they believe that it is not healthy for the health thus they buy the fresh juice, green tea. Patients prefer the fresh juice instead of protein shakes. The industry has the risk of losing the customers because of the substitute product. There are many products which can easily replace the protein shakes thus; the protein shake industry has a high threat of substitute (Porter, and Heppelmann, 2014).

Competitor Rivalry

Nowadays, it is observed that the consumers becoming more conscious for their health. It has been evaluated that the competition level of the market is high. There are many competitors of the protein shakes market in the food industry such as protein bars company, or fresh juice suppliers. Competitors of the market use new recipes or adding new flavours to attract the consumers toward their product. Fresh juice and protein bars industry overtake the market of protein shakes the market. Competitors industry uses the new strategies to attract the customer for their product. Consumers demand is increase toward the healthy products thus the new companies enter into the market with the quality of the product. Protein shake market has the high threat of competitors (Sohel, Rahman, and Uddin, 2014).

Opportunity and Threat

Opportunity

It has been analysed that the protein shakes industry has an opportunity to expand the market or grab the energy drink market.  It is observed that the protein shakes market is a substitute for the energy drink market thus they can easily grab the market (Pandey, 2018).

Threat

It has been seen that the protein shakes industry has a high threat of the competitors or the substitute market. The new companies can enter the market with new features which are also a threat to the market. Increasing competitors are the threat for the protein shake market (Keune, 2018).

Recommendation

In the present scenario, the consumer prefers healthy food.  Protein shake market should sell the product at the higher prices to make the product precious or to make the good image of the product. The market should sell the healthy and fresh products to make a strong brand name in the market (Rothaermel, 2015).

Conclusion

From the above analysis, it has been concluded that protein shakes market is developing by increasing the demand of the consumers toward the healthy product. Consumers are the main element of the industry. Protein shakes market has the high threat of new entrants because of the low cost required. It is observed that the Protein shakes market can be replaced by the protein bar and fresh juice. With the increasing manufacturing firms, the bargaining power of supplier is increasing with the bargaining power of the buyer. By analysing the external environment of the market, it can be said that the company should add the new flavours and improve the quality of the shakes to satisfy the customer. The market also has to set the higher price of the product which makes the strong brand image in the market.

References

Allied Market Research.  (2017) Protein Supplement Market. [online] Available from: https://www.alliedmarketresearch.com/protein-supplement-market [Accessed 7/08/18].

Dobbs, E. M. (2014) Guidelines for applying Porter's five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp.32-45.

Imarc. (2018) Whey Protein (Powder and Concentrate) Market - Global Industry Trends, Share, Size, Growth, Opportunity and Forecast 2018-2023. [online] Available from: https://www.imarcgroup.com/whey-protein-powder-and-concentrate-market [Accessed 7/08/18].

Keune, M. (2018) Opportunity or threat? How trade union power and preferences shape occupational pensions. Social Policy & Administration, 52(2), pp.463-476.

Mathooko, F.  M., and Ogutu, M. (2015) Porter’s five competitive forces framework and other factors that influence the choice of response strategies adopted by public universities in Kenya. International Journal of Educational Management, 29(3), pp.334-354.

Obeng, E., Luchs, R., Inman, J. J. and Hulland, J. (2016) Survival of the fittest: How competitive service overlap and retail format impact incumbents’ vulnerability to new entrants. Journal of Retailing, 92(4), pp.383-396.

Pandey, M. (2018) The opportunity-threat theory of decision-making under risk. Judgment and Decision Making, 13(1), p.33.

Porter, M. E., and Heppelmann, J. E. (2014) How smart, connected products are transforming competition. Harvard business review, 92(11), pp.64-88.

Rothaermel, F. T. (2015) Strategic management. US: McGraw-Hill Education.

Sohel, S. M., Rahman, A. M. A. and Uddin, M. A. (2014) Competitive profile matrix (CPM) as a competitors’ analysis tool: A theoretical perspective. International Journal of Human Potential Development, 3(1), pp.40-47.