Today’s case was about A2 Milk Company, we first identified the industry as the Dairy

industry then further into segments and into category finally. Porter’s five forces were used to
identify the different characteristics of how a buyer or a seller gets high bargaining power.

DAIRY INDUSTRY:

Bargaining Power of Buyer:

A small number of powerful purchasers control a sizable portion of the dairy market, giving
them a major competitive advantage. It is challenging to distinguish between dairy products,
which is an issue. The position of the buyer is once more strengthened by the fact that
purchasers, who are typically huge supermarket chains, have their own distribution networks,
which reduces the likelihood of dairy makers moving forward with their integration.

Dairy products are in high demand since they are a necessary part of diets, thus retailers are
encouraged to stock them, which lowers their power.

Bargaining Power of Supplier:

With the exception of milk produced organically, which commands a premium, dairy farmers
are the primary suppliers with few truly differentiating options.

Typically, these farmers provide joint efforts in the processing and packaging industries.
These large processing firms are even at risk from the effects of increased milk prices since
they must use futures markets to reduce their vulnerability to changes in milk prices. Due to
the high switching costs among suppliers, this increases their influence.

On a limited scale, forward integration among suppliers is doable. As an illustration, consider

Threat of substitutes:

People's diets should include milk and milk products on a regular basis. Directly or indirectly,
milk products are utilised as ingredients in homemade meals. However, consumers have the
option to switch to vegetable-based milk substitutes including soy milk, almond milk, rice
milk, oat milk, and coconut milk.

The vegetable substitutes are frequently offered as powdered milk beverages. Goat, sheep, or
buffalo milk can also be used in place of cow's milk. Cow's milk and milk products
substitutes only make up a small portion of the market. Additionally, milk substitutes are
rather pricey.

Threat of new entrants:

Businesses joining the food industry typically have higher asset turnover than other branches,
particularly in primary industries (agricultural, mining), and real estate operations. However,
there are also significant entry obstacles in the dairy industry. The most significant of these
are rules governing food safety, consumer loyalty to well-known brands of top market
participants, and contracts with grocery stores and milk suppliers. Dairy goods must also
have a high turnover, a dependable supply chain, and distribution channels because they are
typically perishable.

As an alternative, entrance hurdles for small dairy processors wishing to sell their goods at
the neighborhood market are relatively low. They must abide by food safety standards and
increase consumer confidence in the area.

Rivalry among competitors:

Businesses joining the food industry typically have higher asset turnover than other branches,
particularly in primary industries (agricultural, mining), and real estate operations. However,
there are also significant entry obstacles in the dairy industry. The most significant of these
are rules governing food safety, consumer loyalty to well-known brands of top market
participants, and contracts with grocery stores and milk suppliers. Dairy goods must also
have a high turnover, a dependable supply chain, and distribution channels because they are
typically perishable.

As an alternative, entrance hurdles for small dairy processors wishing to sell their goods at
the neighbourhood market are relatively low. They must abide by food safety standards and
increase consumer confidence in the area.

AUTOMOBILE INDUSTRY:

Threat of substitutes:

When vehicle manufacturing companies produce their goods, they run the risk of having their
products replaced by those of their rivals. The task for General Motors was to make sure that
their automobiles' quality and distinctiveness were more than enough to outperform those of
its rivals, regardless of price. Customer loyalty is gained when a business offers high-quality
resources at competitive prices. Competitors, however, benefit when the product may be
replaced and offers equivalent use for a lower cost. This happens when things aren't
distinctive and high-quality.

Bargaining Power of Buyer:

Customers have the power to impact how businesses compete for market share. They possess
what is referred to as negotiating dominance, allowing them to demand superior product
quality and drive down prices. Customers' dominance in the negotiating process frequently
leads to competitors playing each other off in the struggle for profit. It is typically done at the
price of industry profits. This influence is blatantly apparent in the auto business, where firms
like Honda sell cars with comparable levels of luxury to Lexus models for a much lower
price. All of their efforts are motivated by client expectations, which provides them the
advantage of being able to regulate both pricing and quality.

Bargaining Power of Supplier:

When suppliers are dominated by a small number of businesses, this is one of the elements
that give them negotiating strength. They now have more clout when haggling over prices
and costs as a result. When they have established switching costs, which are essentially fixed
prices that purchasers incur when switching suppliers, they also have an edge when
negotiating. This deters businesses from switching to a different supplier right away
following a straightforward disagreement in negotiations. To be competitive, suppliers rely
on strategy, and technology is today the key component of that plan.

Threat of new entrants:

With its cutting-edge marketing strategy, Tesla is a sensation in the automobile sector and has
figuratively transformed the future. The corporation entered the market as a fresh rival from
the technical sector, exploited its resources to its advantage, and created a significant
upheaval. Their introduction of a technologically advanced, electrically propelled car gave
the market a new powertrain for a product. Customers adopted it because of its many
benefits, including gas cost savings, a decrease in mechanical failures, and a decrease in
environmental pollutants. Battery manufacturers' ongoing efforts to lower the price per
kilowatt hour have made them accessible to even middle-class society.
Rivalry among competitors:

The concept of autonomous vehicles (AV) is now in development and is radically altering
how rivals in the sector think. The majority of clients today are drawn in by the idea of being
able to travel to vast places without the stress of driving. Many corporate executives in the
automotive industry are gradually following the idea of saving time traveling from place to
place in a much more efficient way. There is a continuous discussion about whether
autonomous vehicles (AV) have the ability to significantly alter the economics of the sector.
Because of the fixed expenses associated with autonomous vehicles (AV), there is also a
great deal of competition. It's only a matter of time, in my opinion.