Situational Analysis of International or Global Marketing Environment Essay - 1

Situational Analysis of International or Global Marketing Environment - Essay Example Evergreen Natural Grocers deal with natural and inorganic products, and offers competitive prices while ensuring high quality services to customers. Evergreen Natural Markets is characterised by rapid growth, which can be confirmed by its twenty-three stores in nineteen locations in Colorado, Wyoming, and New Mexico. Evergreen Natural Grocers achieved total annual revenues amounting to $175 million and net income from investment of $4.3 million during the financial ending December 2012 (Doyle, 2012). Evergreen Natural Grocers has adopted an expansive strategy for growth. The company has identified a potential market in Canada for selling its products. Five Porter’s Analysis of the Canadian Market Threat of New Entrants The supernormal profits earned by the Evergreen Natural Grocers will attract the entry of new firms. Retail outlets such as Wal-Mart and Humana Inc. have began supplying natural foods and supplements in the Canadian market parallel to Evergreen Grocers. The prof its earned by Evergreen Grocers will trend towards normal and finally fall to break-even in the long-run (Hemmings, 2011). Sources of threat of new entrants include economies of scale, product differentiation, easy access to distribution channels and lenient government policy. Threat of Substitute commodities Most of the Canadians prefer consuming fresh-from-the farm products to the processed natural products. Businesses have engaged in extensive supply of substitutes for natural products supplied by Evergreen Grocers. The Canadian buyers have high propensity to substitute because of low switching costs for consumer foods. The markets, therefore, are characterised by cutthroat competition where new substitutes are brought to market every day. Substitutes are also supplied in forms of direct medications meant to heal illnesses associated with the defects of malnutrition (Fisanick, 2010). Bargaining Power of Buyers The Canadian market comprises of enlightened buyers who are sensitive to price and quality changes. The buyers have the ability to put Evergreen Groceries under pressure, which has an effect in the buyers’ sensitivity to price changes (Raff & Schmitt, 2009). The Canadians have access to all market information and can force the reduction of prices in the event of failing to reflect the true value of the commodity. Bargaining Power of Suppliers Suppliers comprise the market for inputs such as raw materials, components, expertise, labour and energy. Manual labour exhibits features of scarcity in Canada due to low population growth rates, hence, labour is expensive to afford. The Canadian believe in the principles of total quality management; their supplies in terms of raw materials and components are costly because they are prepared based on excellent quality standards. Employee solidarity through labour unions is very strong in Canada, implying the bargaining power of suppliers is effective and all regulations related to labour supply must be adh ered to all costs. Intensity of Competitive Rivalry Natural foods manufacturing units in Canada have embraced sustainable competitive advantage through intensive innovations. Most companies have gone online, and have online supply units to aid in marketing and supplying of their merchandise. The level of advertising expenses is high because of increased competition for advertisement airtime and strategic