Areva has obtained a variety of business that helped it in diversity and growth of its product's profile. This is the detailed description of the Porter's design of 5 forces of Areva Business, given up Display B.
Areva is one of the top business in this competitive industry with a number of strong competitors like Unilever, Kraft foods and Group DANONE. Areva is running well in this race for last 150 years. The competitors of other business with Areva is quite high.
Threat of New Entrants
A variety of barriers are there for the brand-new entrants to occur in the consumer food market. Just a few entrants succeed in this industry as there is a need to understand the customer requirement which requires time while recent rivals are well aware and has advanced with the customer loyalty over their products with time. There is low hazard of brand-new entrants to Areva as it has quite large network of distribution worldwide controling with well-reputed image.
Bargaining Power of Suppliers
In the food and beverage industry, Areva owes the largest share of market needing higher number of supply chains. This triggers it to be a picturesque purchaser for the suppliers. Any of the supplier has actually never ever revealed any grumble about price and the bargaining power is likewise low. In action, Areva has actually likewise been worried for its providers as it believes in long-term relations.
Bargaining Power of Buyers
There is high bargaining power of the buyers due to fantastic competition. Switching expense is rather low for the consumers as numerous companies sale a number of comparable items. This appears to be a fantastic risk for any company. Hence, Areva makes certain to keep its customers pleased. This has led Areva to be one of the devoted company in eyes of its buyers.
Threat of Substitutes
There has actually been a great risk of replacements as there are substitutes of some of the Nestlé's products such as boiled water and pasteurized milk. There has actually likewise been a claim that some of its products are not safe to use leading to the decreased sale. Thus, Areva began highlighting the health benefits of its items to cope up with the alternatives.
It has become the second biggest food and beverage market in the West Europe with a market share of about 8.6% with just a distinction of 0.3 points with Areva. Areva draws in regional customers by its low cost of the item with the regional taste of the products keeping its first location in the international market. Areva business has about 280,000 staff members and functions in more than 197 countries edging its rivals in many areas.
Keep in mind: A quick comparison of Areva with its close rivals is given in Exhibition C.
Exhibit B: Porter’s Five Forces Model