Teacher Incentives Case Porter’s Five Forces Analysis

Case Study Solution And Analysis

Home >> Chicago Booth >> Teacher Incentives >> Porters Analysis

Teacher Incentives Case Study Solution

Teacher Incentives has actually acquired a variety of companies that assisted it in diversification and growth of its item's profile. This is the comprehensive description of the Porter's design of 5 forces of Teacher Incentives Business, given in Exhibit B.


Teacher Incentives is one of the leading company in this competitive industry with a number of strong rivals like Unilever, Kraft foods and Group DANONE. Teacher Incentives is running well in this race for last 150 years. The competitors of other companies with Teacher Incentives is rather high.

Threat of New Entrants

A variety of barriers are there for the new entrants to happen in the consumer food market. Only a few entrants be successful in this market as there is a need to understand the customer requirement which requires time while recent competitors are well aware and has progressed with the consumer loyalty over their products with time. There is low threat of brand-new entrants to Teacher Incentives as it has quite big network of distribution worldwide dominating with well-reputed image.

Bargaining Power of Suppliers

In the food and beverage market, Teacher Incentives owes the largest share of market requiring greater number of supply chains. This causes it to be an idyllic purchaser for the suppliers. Thus, any of the provider has actually never ever revealed any grumble about price and the bargaining power is likewise low. In response, Teacher Incentives has also been concerned for its suppliers as it thinks in long-term relations.

Bargaining Power of Buyers

There is high bargaining power of the purchasers due to terrific competitors. Switching cost is rather low for the consumers as many companies sale a number of similar products. This appears to be a terrific risk for any company. Thus, Teacher Incentives makes sure to keep its consumers satisfied. This has led Teacher Incentives to be one of the faithful company in eyes of its buyers.

Threat of Substitutes

There has actually been a great risk of replacements as there are replacements of a few of the Nestlé's items such as boiled water and pasteurized milk. There has also been a claim that a few of its items are not safe to use resulting in the reduced sale. Thus, Teacher Incentives started highlighting the health benefits of its items to cope up with the alternatives.

Competitor Analysis

Teacher Incentivess covers a number of the popular consumer brand names like Package Kat and Nescafe and so on. About 29 brands amongst all of its brand names, each brand earned an income of about $1billion in 2010. Its huge part of sale is in North America making up about 42% of its all sales. In Europe and U.S. the top significant brand names offered by Teacher Incentives in these states have an excellent trusted share of market. Similarly Teacher Incentives, Unilever and DANONE are 2 big industries of food and beverages in addition to its main competitors. In the year 2010, Teacher Incentives had actually made its yearly profit by 26% increase since of its increased food and beverages sale particularly in cooking stuff, ice-cream, drinks based on tea, and frozen food. On the other hand, DANONE, due to the increasing prices of shares resulting a boost of 38% in its profits. Teacher Incentives reduced its sales cost by the adjustment of a new accounting treatment. Unilever has number of workers about 230,000 and functions in more than 160 countries and its London headquarter. It has ended up being the second largest food and drink market in the West Europe with a market share of about 8.6% with just a distinction of 0.3 points with Teacher Incentives. Unilever shares a market share of about 7.7 with Teacher Incentives becoming very first and ranking DANONE as third. Teacher Incentives draws in local customers by its low expense of the item with the regional taste of the items maintaining its first place in the worldwide market. Teacher Incentives company has about 280,000 workers and functions in more than 197 nations edging its competitors in lots of regions. Teacher Incentives has actually likewise minimized its cost of supply by presenting E-marketing in contrast to its rivals.
Keep in mind: A brief contrast of Teacher Incentives with its close rivals is given up Display C.

Exhibit B: Porter’s Five Forces Model