Market Structure and Competition

                             

Porter’s Five Forces Model is one of the most popular frameworks in management. Porter’s Five Forces Model helps analyze competitive scenario in an industry. The following framework determines the competitive scenario for Maggi:

1.       Competitor Rivalry -  Competitor rivalry is the intensity of competition among existing competitors in the market. Intensity of rivalry depends on the number of competitors and their capabilities. In this case the strong competitors of Maggi are ‘Top Ramen’ and ‘Wai Wai’.

                                        

   2.      New or Potential Entrants- A new entry of a competitor into the market also weakens the power.             Threat of new entry depends upon entry and exit barriers. The potential entrants in the instant noodles           market are Sunfeast Yippee Noodles and Aditya Birla Group’s ‘Tasty Treat’.

                                           

   3.   Threat of Substitute Products-Threat of substitute product means threat of a new product                          susbstituting the company’s product. In case of Maggi noodles a substitute could be pasta,chowmein              and fast food.

      4.     Bargaining Power of Buyers- Bargaining power of buyer is the power exercised by buyers to drive         down the product’s price. In this case Maggi is the only major player in the market,therefore the buyers         do not have bargaining power.

        5.  Bargaining Power of Suppliers- Bargaining power of suppliers determines the strength of the seller. In        this case too Maggi holds a very strong position and is thus very popular.

          Analysing Competitors- Maggi’s market share is about 86% and it has no market challengers as other       companies together own the remaining 14% market share. Thus Maggi has no market challengers.