Porter Five Forces Model

Overall industry rating:

High Moderate Low

Threat of new entrants.

X

Bargaining power of buyers.

X

Threat of substitutes.

X

Bargaining power of suppliers.

X

Intensity of rivalry among competitors.

X

Threat of new entrants

• Threats of new entrants are towards lower side.• The capital needed to build beer manufacturing

facilities and the costs associated with operating business on a national scale are expensive.

• The cost associated with this highly controversial industry seek high levels of sales, thus making the industry more and more prohibitive for newcomers.

• Government regulations are largest factor in this force.

Bargaining power of buyers

• Barraging power of buyers is high.• The quantity of alcoholic beverages that a nation

consumes tends to be unaffected through recession and prosperity while the quality of the products purchased is directly related to the disposable income.

• A decline in disposable income shifts consumers preferences away from premium-priced brand-name products in favour of lower-priced brands i.e. switching cost is low.

Threat of substitutes

• Threat of substitutes is low.• Customer loyalty through brand awareness.• The advertising restrictions placed on

alcoholic beverage industry in recent years make it harder to achieve brand loyalty.

Bargaining power of suppliers

• Suppliers’ power is low.• Products used to brew beer are inexpensive

and suppliers are numerous.• Intensity of rivalry among competitors• Through the competition is tough, the

kingfisher brand is the one of the largest supplier of beer, & the third largest procedures of distilled spirits.