Ocean Spray Cranberries

Ocean Spray Cranberries

Porters five force model.

1. Buyers: Competitively Strong

In this company the distributors can play a major role in making all the products available to the retailers but the retailers are the main buyer for cranberry based products. Both of them are eligible to gain considerable power because the retailers have controls of the amount of space required and placement of the products. The distributors are important as well because there responsible for getting the product out to the market.

Suppliers- Competitively weak

The growers of the cranberries are in no position to be able to negotiate for higher prices since processors are the ones paying market prices for commodities like cranberries and other crops. At that point in time, the cranberry growers were very weak in their negotiations with there supporters and other buyers. Every since 1996 the growers have contributed to the large price decreases by producing way to much cranberries that of what was demanded for.

Substitutes - Competitively strong

Their many different products that are eligible to be a substitute for cranberries such as other fruit based juices, beverages that do not contain fruit and water can also be a very strong substitute for cranberry juice. The use of cranberry products are subjected to be sold less in different seasons.

Threat of new entry - Competitively weak

The threat of new entry is weak because of too much production capacity is being used already and having it be way to competitive for shelf space at retail markets. Northland Cranberries Incorporated did not gain any reputational success due to just entering the fruit juice industry and only contributing to a war with producers among different kinds of prices. In the fruit juice industry it is very hard in order to gain far success and only Coca-Cola and Pepsi have done it by using very good judgment. Both of these successful industries were eligible to leverage the large distribution capacity and bargaining power with retailers to become very successful. Both of the companies have unbelievable advantages in sale production and bottling cost.

Threat of Rivalry – Competitively Strong

The accessibility of contribution for distribution and retail shelf space can