Industry Analysis of RFM Corporation

Catindig, Maybelyn U. BSEM 4-1 Prof. Arcega “RFM Corporation” (Food and Beverages) The Microenvironment of the Business Competitors: Nestle, Magnolia, Alaska, Universal Robina, CDO, Pacific Meat Co. (Argentina brand) Factors affecting the competitive environment:       

Market share Product/ brand quality Extent of product line Price competition Cost of raw materials Consumer preferences Effectiveness of advertising and promotion

The Macroenvironment 1.

Socio-cultural factors  Filipino celebrations especially “kiddie parties” are not complete without spaghetti and ice-cream which are kids’ favorite meal.  The common and traditional breakfast meal of every Filipinos is hot pandesal made from the best and finest flours in the Philippines.  Philippines is a tropical country and frequently hit by calamities. In order to survive in times of strife and food shortage, stocking of canned goods are practiced by many Filipinos.  Nowadays, Filipinos are health conscious and practice daily exercise like jogging, sports, and gym so they need a more energizing type of drinks, and should drink plenty of juices for body maintenance.

2.

Technological factors  Online advertisement is the easiest way in reaching customers. Through social media, launching of new products is easily dispersed through the millions of people using social networking sites.  Online posting of company information and profile is the easiest way for the prospect clients to trace details about the company.

3.

Economic factors  Tariffs are being imposed on firms and corporations that import raw materials from other countries.  Electricity bill hike causes high cost in the business and will affect the prices of the products.  Poverty is being used as an opportunity to market products that the customer can afford.

4.

Political-legal factors  Subsidiaries are facing issues regarding brand names and patents. A lot of disclosures are being made but the general public are unaware and sometimes, leads to original brand confussion. 

Porter’s Five Forces of Competition

NEW ENTRANTS -Milk Magic -Minute maid -Tropicana -Green leaf -Highlands corned beef -Dairy Queen Competition: MODERATE

SUPPLIERS -Sunkist Growers (USA) -Agriculture, wheat farmlands -Poultry, meat products. Competition: MODERATE

RIVAL FIRMS

-Nestle -Magnolia -Alaska -Universal Robina -CDO -Pacific Meat Co. (Argentina brand) -Zest-O Corp. -Maya -Knorr (Royal) -Del Monte Competition: STRONG

SUBSTITUTES and COMPLIMENTS -Powdered milks and juices (by liter) -Canned tuna and sardines -Local brands of icecreams: Creamline, Dan Eric’s, ambulant ice-cream vendors Competition: STRONG

CUSTOMERS Direct Household Students (children,teenagers) Intermediary Convenience stores, supermarkets, grocery stores Competition: STRONG

RIVAL FIRMS Nestle The strongest among all the competitors. Nestle has a wide range of product lines in foods and beverages industry, and has an established image in the industry. Magnolia and Alaska These two companies are the closest rivals in dairy products such as fresh milks and ice-creams. Alaska milk is the most trusted company in milk production. Magnolia is also a well-known brand in milk production but offers other beverage products such as fruit juice, butter, ice-creams, and the like. CDO, Purefoods and Pacific Meat Co. (Argentina) These are competitors in meat processing and canned goods. Same product lines are offered such as corned beef, sausages, hotdogs, and the like. Universal Robina, Zest-O Corp., Maya, Knorr(Royal), Del Monte Competitors in other products such as bottled green tea, orange juice, pasta and flour-based products or mixes.

NEW ENTRANTS Milk Magic – fresh milk Minute maid, Tropicana – orange juice Highlands corned beef Green leaf – green tea Dairy Queen – ice-cream

SUBSTITUTES AND COMPLIMENTS Powdered milks and litro-pack juices- These are far less cheaper in price and more practical. Canned tuna and sardines- Fish products are less in price than meat products because they have less cost. Local brands of ice-cream such as Creamline, Dan Eric’s and ambulant ice-cream vendors- These could be found in small communities and villages also available for franchise. CUSTOMERS Direct: Household – food and beverages are the basic needs of a family. Mothers are usually the budget-makers and are also concern on the needs especially of the children for packed lunch for school, and also treats for the celebrations. Students (children,teenagers) – they are the target market of the company whom they dedicate their tagline “we love kids”. Children are the sources of ideas of the company on how to innovate their products, and also to satisfy their wants out of their limited allowance/ budget. Intermediary: Convenience stores, supermarkets and grocery stores – they are in need of the products with high returns on investment, fast moving and quality that suits the needs of their guests/ shoppers.

SUPPLIERS Sunkist Growers (USA) Inc.- RFM has a brand franchising agreement in Sunkist USA and receives steady supply of oranges. Since it is imported raw materials, the shipping cost itself might not be too high, but the tariff and risk that there might be a tendency of delayed delivery is high. Agriculture, wheat farmlands – changes in the climate may affect the supply or the harvest of wheat especially during rainy seasons. Poultry, meat and milk products- RFM must have surely picked their trusted suppliers of poultry products because double-dead meats are quite rampant in the market. As of the present time, there were no reports of swine flu epidemic.