COMPETITION AND COMPETITORS

For any product, one of the most important things to be thought about is its market competition. What are the closest substitutes to their products, who can be a threat to the market share of the product etc. There is however a noticeable difference between the words – competition and competitor.

Competition is a state in which a player enters while fighting or rivaling with another player in the same segment of products for the same area and same share of the market , whereas,

Competitor is an entity who is competing against another entity in the same marketing space, with a similar product and for the same market share as the other entity.

The competitive scenario in a market can be properly analyzed using Porter’s model of 5 forces analysis which is represented as follows:

The key competitors are:

Amul

Mother dairy

Baskin and Robbins

Local competitors

1. Industry (Segment) Rivalry:

The market in an industry can sometimes be unattractive if the product already has strong substitutes and competitors. This might lead to a large amount of strife between competitors. Such a market experiences a lot of price fluctuations.

Industry Rivalry for Magnum is High owing to the following:

There are powerful local players in the market like Amul, Creambells, Mother dairy, Top n Town, etc.

2. Potential Entrants:

A potential entrant refers to local entrants into the business which bring in competition to the product. On one hand, a local brand might find it difficult to establish itself in the market, however being locals; they have a greater understanding of the customer.

 Liberalization and globalization has made it easier for the foreign players to enter  the Indian market.(eg. Baskin and Robbins).

3. Substitutes:

Substitutes refers to products which might pose a threat to the product because they are almost identical or might even prove to be a better selling product if the company selling it goes for aggressive pricing.

There is a high threat from substitutes. There are a lot of cultural and traditional substitutes for ice creams like sweets, desserts, kulfi, etc.

4. Bargaining Power of Buyers

 Ice cream industry is a huge market. But Magnum is a luxury product so customers have a low bargaining power. However it depends on factors like pricing and availability of substitutes.

5. Bargaining Power of Suppliers

Magnum has a low bargaining power of suppliers as manufacturer can easily switch to a   different supplier at low cost.