Against School How Public Education Educates Our Kids,...

In the attempt to persuade his readers in â€Å"Against School: How public education cripples our kids, and why†, John Gatto relied on his passion for education to express his thoughts. Having a bad experience as a teacher in our current school system, he believes that our system isn’t what it should be. He believes that our kids aren’t being educated. With the use of frequent rhetorical questions, personal experiences, and an appeal to ethos using other respectable men’s work, Gatto clarified his points about our schools in the America. Gatto informs us that he himself was a teacher for about 30 years. In those 3 decades, he â€Å"became an expert in boredom.† He believes boredom is everywhere in the classroom. When asking his students, â€Å"Why they†¦show more content†¦We could encourage the best qualities of youthfulness - curiosity, adventure, resilience, the capacity for surprising insight - simply by being more flexible about time, texts, and tests, by introducing kids to truly competent adults, and by giving each student what autonomy he or she needs in order to take a risk every now and then† (Gatto 4). To furthermore explain his reasoning, he rhetorically questioned his own hypothesis of there being a problem in our system. â€Å"What if there is no problem with our schools? What if they are the way they are, so expensively flying in the face of common sense and long experience in how children learn things, not because they are doing something wrong but because they are doing something right? Is it possible that George W. Bush accidentally spoke the truth when he said we would leave no child behind? Could it be that our schools are designed to make sure not one of them ever really grows up† (Gatto 5). â€Å"Do we really need school† is the question he asks the reader. By doing this he made the reader rethink about the compulsory schooling students have to go through to be â€Å"success ful† in life. Gatto questions why we have to go to school, â€Å"six classes a day, five days a week, nine months a year, for twelveShow MoreRelatedAgainst School By John Taylor Gatto1317 Words   |  6 Pages Some people believe education enslaves us and other people believe education liberates us. The education that students receive is both boring and incorrect; in the Oxford dictionary it defined education, â€Å"a process of receiving or giving systematic instruction, especially at a school or university†. I strongly believe education enslaves us. Schools don’t educate, they only teach people to follow orders. Sherman Alexie tackles his own process of education, one that includes a voracious hungerRead MoreJoseph Gatto, Former New York City Teacher Of The Year And By John Taylor Gatto889 Words   |  4 PagesJohn Taylor Gatto, former New York City Teacher of the Year and author of â€Å"Against School: How public education cripples our kids, and wh y,† believes that forced schooling essentially molds young minds into society’s servants. Gatto begins his argument by drawing on his own experience as a teacher and the history of schooling. He then demonstrates how schools turn children into consumers. Despite the fact that he believes that public education cripples young minds, he concludes by offering a solutionRead MoreEssay on Problems with Public Schooling995 Words   |  4 PagesJohn Taylor Gatto is well known in the homeschooling world. He has written articles and books that give an inside look into the compulsory schooling system. 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He also educates us on the fact that all the great discoverers never attendedRead MoreEssay about Worth of the Public Education1893 Words   |  8 PagesWorth of The Public Education Education has a tremendous impact on the human society. It begins at birth and continues until a person’s last day on earth. Human beings gain knowledge and information through education, and use them constantly throughout their lives. Leaders of nations have been thinking constantly how to educate their citizens, because of education’s role as a vital instrument in the development of an individual and society. There are different forms of education exist in the humanRead MoreAgainst School John Gatto Analysis1753 Words   |  8 PagesAmerican public education system does more harm than good. In â€Å"Against School† by John Taylor Gatto and â€Å"Social Class and the Hidden Curriculum of Work† by Jean Anyon, explains how school education destructively impacts us. Gatto states his experience as a public school teacher and why he â€Å"just cant-do it anymore†. He was tired how the schooling was programmed. He argues how school system are affecting students to be more like â€Å"childlike† citizens. Also, Anyon demonstrates her research on how thereRead MoreThe Myth of Gyges and The Allegory of the Cave, Several Paragraphs on Philosophy and Education2708 Words   |  11 PagesEducation 1) The Myth of Gyges and The Allegory of the Cave was made up by Plato. According to Saunders (2006), the myth of Gyges talks about how a man named Gyges who got a hold of a ring that made him invisible. Since no one could see him he was able to do whatever he wanted without getting caught. The message in this myth is that if everyone had a ring to make them invisible we would most likely do unjust things no matter if we were just or unjust before putting on the ring. According to Cohen

Increasing Cross Functional Planning For Success - 963 Words

Increasing Cross-Functional Planning for Success The education industry is ripe for disruption. Private equity funding is surging into the education market (Bryant Sarakatsannis, 2015). In order for a large multinational education company to both disrupt itself, and fend off disruptive technologies within the education market, the company must increase the leadership teams abilities to collaboratively plan and adjust to market changes. The company has used agile development practices for many years, and began strategic planning in an agile fashion for the technology divisions. To be able to respond to disruptive market forces, the company should embrace strategic agile planning across their traditional publishing arm as it merges with technology development (Parker, 2012). This proposal for senior leadership includes an overview of the organization with a discussion on current challenges in cross-functional strategic planning, and operational execution, given the current business and internal climate, an overview of four leade rship theories which provide specific perspectives in helping senior leadership in solving cross-functional planning challenges, with a recommended action plan aligned with the organization mission, vision, ethics and globally diverse workforce. The large education company is similar to other large multinationals in serving markets in both the developed and developing world. Global demographic shifts point to increased K – 20 aged people inShow MoreRelatedWhat Is Strategic Management1189 Words   |  5 PagesManagement can be defined as the art and science of formulating, implementing, and evaluating cross-functional decision that enables an organization to achieve its objectives. 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Cybernetic Communication Model Advertising - Myassignmenthelp.Com

Question: Discuss About The Cybernetic Communication Model Advertising? Answer: Introduction Coca-Cola Company has been facing a challenge in the reduction of its sales volumes due to decline in the demand for its products. The slowing down in demand of Coca-Cola products has been due to health concerns about its products. The habits of consumers are changing and they are becoming more and more concerned about their health which means that the future of the company and majority of its products is now at stake. The company, therefore, aims at developing a new brand of drink called Fruity Cola. The drink will be manufactured using natural organically grown fruits of different varieties. The brand will be premium and it is expected to become a sensation in the market. This is because the products will not only a health concern but also it offers consumers very many health benefits. This report analyzes the marketing plan the company is planning to use to market its products globally. The marketing strategy explains the strategies to be undertaken by the company to help introduc e the new product to the market and achieve the desired sales volumes (Lamb, Hair McDaniel,2012). The first section of the report evaluates the background of the soft drinks industry to help get an understanding of the level of competition and the factors that underline success in this industry. The report also contains a SWOT analysis of the company in order to identify the strengths and weaknesses of the company. This is followed by an analysis of the external marketing environment with factors such as culture and demographics being discussed. The possible market segmentation for the new product is done to help market the product better. Marketing mix for the company helps to identify the prices of the products and the distribution channels that will be used to distribute the product. Industry background The players in this industry mostly produce canned or bottled soft drinks. Some of them are carbonated soft drinks and others are still like bottled water. The soft drinks processing industry in Australia is very competitive and there are very many players in this industry. The soft drinks industry has experienced modest growth since the year 2012. There are also many factors that have constrained the growth of this sector such as changing consumer behavior and increasing health concerns related to the products in this industry. There has also been stiff competition between players in this industry. This has brought a price war whereby the industry players try to outdo one another based on pricing and therefore the prices for the products end up being too low. This has reduced the profit margins for this industry to very low levels. The soft drinks industry is focusing its attention to energy drinks and sports drinks that are becoming popular in the product. Real fruit juices which a re manufactured from farm inputs are also in high demand. The growth in the demand for these products has supported the growth in the soft drinks industry. Thus, therefore, means that the companies that are able to develop new products which may be either sports drinks or fruit juices will be able to conquer this industry. Over the next five years, the revenues in this industry are expected to grow by 0.7%.The expected revenues for the soft drinks industry in the 2016-2017 year are expected to reach $4.2 billion(Ellis, 2010). This is an expected decline of 0.3% due to price competition which is resulting in much lower prices. The changing social trends have also affected the demand for soft drinks with most health-conscious consumers moving away from sugary drinks to zero sugar products. The future for this industry, therefore, lies in energy drinks and sports drinks as well as fresh fruit drinks which are considered healthier. Some of the external drivers that are key to this indus try include demand from supermarkets and groceries. Most of the output from this industry is sold in supermarkets. Increased demand from grocery stores and supermarkets will lead to increased revenues for this industry. The other key driver for this industry Is demand from fast food services which accounting for a significant portion of the industries total sales volumes. The disposable income of households also drives demand in this industry. Higher disposable incomes enable more spending for products such as soft drinks and therefore affecting the industry revenues positively. SWOT analysis of Coca-Cola A SWOT analysis of Coca-cola shows the strengths weaknesses, opportunities and threats that the company is exposed to. The main strength of coca cola is its promotion strategies. Coca-cola undertakes aggressive promotion of all its products. Coca-cola marketing mainly targets people of all ages while its competitors like Pepsi mainly focuses its marketing on children. The company designs a message that resonates well with the targeted customer. The other strength of the company is its distribution system. The franchised distribution system is very strategic for coca cola since it enables the company to focus on production and marketing (Sahaf, 2008). The bottlers and other partners concentrate on distribution, bottling and merchandising. Coca colas new product development is also another major strength. The company is able to respond to consumer needs, tastes and preferences and is able to develop a new product for each market segment (Yuece,2012). The administrative control of the company also helps in proper coordination of its activities globally. The main weakness of coca cola is its low product diversification. This is very noticeable when compared to its competitor Pepsi. Pepsi has diversified into snacks market segment with the launch of its Lays and Kurkure products (Mennen,2010). Coca-cola has remained focused on soft drinks industry and does not venture into other unrelated businesses. Healthy concerns by consumers are given the sugar levels in the products of the company is a major weakness for coca cola. This, therefore, means that the company needs to keep on innovating products that are healthy and that are able to meet consumer needs. Since the company mostly depends on carbonated drinks business, it has to keep on innovating since sales of carbonated drinks are falling drastically (Rajagopal,2012). There are various opportunities available for coca cola exploit. One of these opportunities is diversification which will enable the company to raise more revenue and spread risk further. The company can also invest in manufacturing of fruit juice which is gaining favor among consumers due to their health benefits (Bidgoli, 2010). Coca-cola also has an opportunity to invest further in developing countries such as in Africa where there is unexploited market potential. The threats for Coca Cola Company include the intense competition from Pepsi and other manufacturers of soft drinks and bottled water. The stiff competition means that the market share of the company is under threat and this may lead to decrease in revenues for the company. Threat from substitute products such as tea and coffee due to the increasing health concerns among consumers. Marketing environment analysis The macro-environment factors that affect Coca-Cola Company are the factors that affect the companys activities and operations and the company is not in control of them. Some of these factors include the culture of the people who the company sells its products to. Cultural and social has had a significant impact on coca cola. Culture plays a very important role in determining the consumer behavior. The consumption patterns of customers in Australia is changing since most of the people are becoming so conscious about the health implications of what they consume (Finne Grnroos, 2009). The changes in cultural and social beliefs have affected the demand for the companies` products since the company sells in a society where there are cultural beliefs about the products being consumed (Blakeman, 2014). The culture of Australian consumers mainly didnt emphasize on the health benefits of products being consumed. Australia is one of the countries where the weather is mostly hot therefore mea nt the demand for its carbonated products remained very high. In the recent past, there have been allegations of some of the products produced by the company have negative effects on human health such as causing cancer. The high levels of sugar in most of Coca-Colas products have also been blamed to cause problems such as diabetes and issue of weight. These factors have therefore contributed to changes in the culture of consumers. More and more consumers are wary of what they consume and therefore some of them are shunning sugary products and prefer to consume energy drinks or bottled water. Since the company cannot control the culture of the people, it has adopted its products to fulfill the needs of consumers (BALAKRISHNA, 2011). The company has produced bottled water and energy drinks such as Monster energy drink to help fill the gap that exists in the market. Coca-cola is still focusing on developing more products to help meet the needs of various consumers in terms of tastes an d preferences. Demographics Consumer demographics are factors such as age, gender, race, income levels, education levels, lifestyle and employment that are relevant in marketing the companys products(Pride, Ferrell, Lukas, Niininen Schembri, 2015). Age is an important factor in marketing for coca cola. The company identifies the age group that represents the majority of its consumers and targets most of its advertising to that target group. Coca-cola mostly targets young adults in its marketing efforts. The company has come up with a policy not to market its products to young children due to the high levels of sugar in its products. The lifestyle of people also helps in market segmentation and target marketing. People with a lifestyle of having fun and relaxing are more likely to consume coca cola's products. The economic environment is also important when marketing the new fresh fruit juice. The issues of inflation and the economic stability of the country is important in marketing a new product. The current economic environment of Australia is stable and will provide a good environment for the product to break through. The political environment of Australia is stable. There are also currently no political issues surrounding the Coca Cola company and therefore the new Fruity juice cola is expected to perform well in the market. The demographic environment which includes factors such as age,gender,marital status are important when marketing Fruity Cola,the new product under the coca cola brand. It helps in market segmentation to help in targeting customers such as young children who are discouraged from consuming the other products seen as unhealthy. Micro-environment analysis Coca-cola Company is a soft drinks manufacturing company that was started in the year 1886(In Banks, In Pelsmacker In Okazaki, 2015).The company has dominated the soft drinks industry globally for the entire 20th century and continues to be a major global force in this industry. The companys business model is the franchising model. It produces concentrates which it then sells to licensed Coca-cola bottlers worldwide. The bottlers mix the concentrates and bottle the products. They are also in charge of distribution. Coca-Cola has more than 400 brands under its portfolio. These brands range from carbonated drinks such as coke sodas, zero sugar brands such as Diet zero, C2 Cola, Minute Maid juices, Powerade sports beverage, energy drinks such as Monster energy drink and much more. The company seeks to increase its products in the healthy non-carbonated soft drinks brand category. This will help the company to fulfill the consumer needs better and to expand its revenue streams. Product overview Fruity cola is a new brand of coca cola. The product will be made from real fruits that will be processed to produce the juice that will be packaged and distributed to the market. The product will be the most healthy product under the coca cola products since it has a nutritional value such as vitamin C and A. It is to be sold in 300ml and 500 ml bottles plastic bottles and cans. Core competencies The main outstanding core competence of Coca-Cola company is the companies strong brand. The company has cultivated a reputation over the years as the best carbonated soft drinks company in the world. The company has been able to maintain quality standards over the years and has been able to respond to the needs of consumers appropriately. Another core competency of Coca Cola Company is its distribution system. The company makes concentrates which it sells to bottlers who are distributed strategically globally. The bottlers liaise with supermarkets, grocery outlets and shops to distribute the products to the final customer. Coca-cola products are available in most of the retail outlets and customers can obtain them easily at low prices. Administrative controls are another core competence of coca cola. The company is well organized at the top and regional levels and hence making the running of operations much easier (Casillas Marti?nez-Lo?pez, 2010). The marketing of the company is also made easier by the administrative controls. Corporate partners The partners of coca-cola company include suppliers,customers and corporate partners who are engaged by the company to help complete its distribution cycle.The company has diverse suppliers and it ensures that its supplier base represents the diverse customer and consumer base. The companies` bottlers and distribution partners are the other corporate partners of coca cola limited. Competitors The soft drinks industry has very many players and they cant be all analyzed. The main competitor of Coca Cola Company is PepsiCo (PEP), Dr Pepper Snapple, Coca-Cola FEMSA and S.A.B.Monster Beverage Corp. These companies engage in production of carbonated drinks and bottled water.The companies operate globally and their distribution system is very close to that of Coca Cola. Market Segmentation, Targeting and positioning Coca-cola segments its market to help it reach all its target customers. The company segments its market based on various considerations. Geographical segmentation of is based on regions such as Europe, Middle East and Africa segment, Asia, and North America as well as the South American region. This helps the company to serve the geographical markets based on the tastes and preferences of consumers in this region. Targeting The segmentation of the market by Coca-Cola enables brands and preferences of consumers to develop the products for different types of customers. Coca-cola adapts its marketing by developing new products depending on the market. Some of the factors it considers in targeting are age, Lifestyle, Occupation, Nature and customers consumption behavior depending on culture and social aspects. The company does not target consumers of young age in its current targeting and marketing strategies. This is because of the high sugar levels for most of Coca-colas products. Coca-cola also targets customers in various market segments depending on other demographic factors like income levels. Positioning Coca-cola has positioned itself very strategically in the soft drinks industry in the world. The Coca-Cola brand sells in over 200 countries worldwide. Coca colas marketing slogan is think global, act locally. The company has therefore been able to maintain its core products and develop other products depending on the consumer needs, tastes and preferences in that particular market. Coca-Cola uses strategic positioning so as to maintain its global reputation and to keep its brand growing. Its positions itself as offering products that bring joy and happiness to consumers. The coca cola company manufactures concentrates and sells them to bottlers who bottle and distribute the products. The companies` main product is the Coke soda which is the initial and historical product of the company. The new fresh fruit juice called Fruity cola is a new product under a new brand of coca cola. This brand aims at developing new products for customers that have health benefits to the consumer. Fruity cola will be manufactured by sourcing different varieties of fruits from various contracted suppliers. The company manufactures concentrates which will be sold to bottlers to process the final product. The product is very healthy and is focused on different market segments with that of children being the main target to compensate for decrease in sales of other products. The carbonated drinks under the portfolio of the company include Sprite, Fanta, Coke diet; coke zero. The company also manufactures bottled drinking water. Sports drinks such as Powerade.The company has over 400 brands which are different in varying market segments (Baines Fill, 2010). The product lifecycle for the coke products does not follow the normal stages of growth, maturity and decline. The companies` products do not undergo the normal stages of product development, growth, and decline since they have maintained the popularity all along. Pricing of coca colas product is based on costs of production. The cost of producing the new Fruity cola is expected to be high since the product will be manufactured using naturally sourced ingredients. The retail price of the new Fruity Cola will be almost twice as high as the price of the other common products.The company sets its retail price after determining the price of producing and distributing the product to the final consumer. It sets a price that will be able to generate reasonable profits for the company (Bowen In Ozuem, 2015). The bottlers are given the power and mandate to determine the prices of the products depending on the environmental factors that affect the industry. However, in most countries, bottlers maintain a uniform selling price but the retailers decide the prices of the products on their own. The coca cola company uses the franchised distribution system. The distribution channels that have been used to distribute other coca cola products is the same one that will be utilized to distribute the new Fruity Cola. This is where the company licenses bottlers and sells the concentrate used to make the cola products to them. The company does not have direct control of its distribution system but it has put policies and strategies in place to ensure the distribution system is as efficient as possible (Armstrong, Adam, Denise Kotler, 2014). Promotion Coca-cola is very aggressive in its promotional activities. Apart from new product development, this is one of the strategies that highlight the companys success over the years. The company will start promotion of the product by advertising the product in print and broadcast media.The companies` partners who are the bottler and the retailers will be given merchandise to create awareness on the new product by coca cola. Coca-cola uses various promotion techniques. The new product will be promoted through various methods such as print media advertisement, broadcast advertising, internet advertising and social media advertising. The company uses social media advertising tools such as Facebook to reach young consumers (Friedmann, 2009). Other promotional techniques that will be used by the company include sponsorship of local events and sporting activities and competitions such as the FIFA world cup and the Olympics which offers the company a lot of publicity. The company also engages in local sponsorship activities which help to promote its products. Road shows are also commonly used by the company. Conclusion With the changing social and cultural trends and perceptions, the consumption behavior of customers has also changed (Bothma, 2015). Customers are becoming more and more concerned about their health and are keen to avoid consuming products with high levels of sugar. This has resulted to decline in demand for coca cola carbonated drinks and an increase in demand for bottled water and energy drinks. This has prompted the development of the new product referred to as Fruity Cola that is manufactured using real fruits to make a juice that is packaged in 300ml and 500ml bottles. This paper analyzes the industry and competitors to determine the level of competition expected for the new product. Target marketing and segmentation are also carried out to identify the market segments that Fruity Cola will target. The report also has a detailed product mix analysis. References Balakrishna, S. I. D. H. A. R. T. H. (2011). Case Studies IN Marketing. S.l.: Pearson Education India. Bothma, N. (2015). Integrated marketing communication (1st ed.). Claremont, South Africa: New Africa Books. Bowen, G., In Ozuem, W. (2015). Computer-mediated marketing strategies: Social media and online brand communities. In Banks, I. B., In Pelsmacker, P. ., In Okazaki, S. (2015). Advances in Advertising Research: Extending the boundaries of advertising. Blakeman, R. (2014). Integrated marketing communication: Creative strategy from idea to implementation. Bidgoli, H. (2010). The handbook of technology management. Hoboken, N.J: John Wiley Sons. Ellis, N. (2010). Business-to-business marketing: Relationships, networks and strategies. Oxford: Oxford University Press. Casillas, J., Marti?nez-Lo?pez, F. J. (2010). Marketing intelligent systems using soft computing: Managerial and research applications. Berlin: Springer-Verlag. Finne, ., Grnroos, C. (2009). Rethinking marketing communication: From integrated marketing communication to relationship communication. Journal Of Marketing Communications, 15(2-3), 179-195. https://dx.doi.org/10.1080/13527260902757654 Gracz, L. (2016). The meaning of smartphones for marketing communication. Keillor, B. D. (2007). Marketing in the 21st century. Westport, Conn: Praeger. Kowal, J., In Ostapiuk, K., In Wawrzak-Chodaczek, M., In Kuzio, A., In Z?eligowski, H. (2015). Communication and information technology in society. Lamb, C. W., Hair, J. F., McDaniel, C. D. (2012). Essentials of marketing. Mason, Ohio: South-Western Cengage Learning. Miles, C. (2007). A cybernetic communication model for advertising. Marketing Theory, 7(4), 307-334. https://dx.doi.org/10.1177/1470593107083159 McLeish, B. (2011). Successful marketing strategies for nonprofit organizations: Winning in the age of the elusive donor. Hoboken, N.J: Wiley. Pride, W. M., Ferrell, O. C., Lukas, B. A., Niininen, O., Schembri, S. (Rajagopal, . (2012). Systems thinking and process dynamics for marketing systems: Technologies and applications for decision management. Hershey, PA: Business Science Reference. 2015). Marketing principles. Sahaf, M. A. (January 01, 2008). Strategic marketing: Making decisions for strategic advantage. Yuece, I. (2012). Impact and Role of Market Research in New Product Launch Process. Mu?nchen: GRIN Verlag GmbH

Supermarket Industry Analysis Essay Example

Supermarket Industry Analysis Essay .From the report of the Progressive Grocer, a monthly industry publication, we can know that in 2009, 35,612 supermarkets were in business in the United States, which accounted for 54. 5% of food item sales by grocery stores including supercenters and warehouse outlets. Convenience stores had 31. 9% of sales, and wholesale clubs had11. 5% of sales. So, supermarkets overall account for more than half of all food sales. Market definition In general, we believe that a supermarket is a large comprehensive retail store that sells a wide variety of goods including food and alcohol, medicine, clothes, and other household products that are consumed regularly. Customers can use the most comfortable and free way to choose goods by themselves in the supermarket. It is the most popular way for retailer in developed countries. And, the Standard Poor’s industry surveys define that the US supermarket industry includes a range of businesses, from small grocery shops and convenience stores to large supermarket chains, excluding restaurants and department stores that sell gourmet foods. We will write a custom essay sample on Supermarket Industry Analysis specifically for you for only $16.38 $13.9/page Order now We will write a custom essay sample on Supermarket Industry Analysis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer We will write a custom essay sample on Supermarket Industry Analysis specifically for you FOR ONLY $16.38 $13.9/page Hire Writer Through the definition of supermarket, we can know that supermarket is not only a market; it covers many different industry areas. We want to analyze a single market, and, according to the North American Industry Classification System (NAICS), the supermarket industry is found in section 445110:  Supermarkets and Other Grocery (except Convenience) Stores. NAICS states that â€Å"This industry comprises establishments generally known as supermarkets and grocery stores primarily engaged in retailing a general line of food, such as canned and frozen foods; fresh fruits and vegetables; and fresh and prepared meats, fish, and poultry. Included in this industry are delicatessen-type establishments primarily engaged in retailing a general line of food†. It means that supermarkets mainly sell food. So, I will choose the definition of supermarket industry in the NAICS and just focus on food retail. [pic] How can I know the food retail is an own industry? There are two questions we must ask ourselves in order to answer this question. First, do the consumers view food and other items the same? Second, can the food retailer easily switch from selling one to others? For customers, I think it is easy to answer. When someone feels hungry, he/she just want to buy some food to eat; he/she can not choose some clothes to make him full. Even when the price of food increases, people can not buy medicine or other items to substitute it. They have no choice to satisfy their need except food. To sum up, customers see food as different from other items. For food retailer, they just have experience of food selling, so they just understand what kinds of food can attract consumers and where they can purchase the cheapest products, which means that they lack the knowledge and suppliers of other market. Further more, selling food and selling other products needs different facilities. For example, selling food needs refrigerators which is not required when selling cars. Moreover, transportation and distribution of selling food are separate from selling other types of products. Customers require food is fresh, so food retailers should buy from the closest place and use the fastest way to take foods into the supermarket. There are not these demands for other products. Thus, it is difficult for food retailers to switch from selling food to other products. All in all, I can conclude that food retail is its own industry. Five Forces that Shape Industry Competition [pic] Internal rivalry The rivalry in the food retail industry is extremely high. First, a large number of various companies exist within this industry. In the United States, there are three kinds of main competitor sharing the supermarket industry: international supermarkets, like Wal-Mart; national supermarkets, like Costco; and regional supermarkets, like Roth in Independence. Because these food retailers sell the same or very similar products, each company wants to steal customers from others to sell more of their own merchandise, and as a result, rivalry intensifies. Second, although the unfavorable economic environment lead the consumers trading down to lower-priced goods within supermarkets in 2009, with a more stable economic trend for 2010, retailers are beginning to increase capital spending budgets. For example, Safeway boosted capital spending from the $852 million spent in 2009 to a range of $900 million to $1 billion in 2010. Whole foods market increased capital spending significantly from $315 million in 2009 to a range of $350 million to $400 million in 2010 (Standard Poor’s industry surveys, 2010). When companies increase investment to expand their own output, it always tends to intensify competition for luring customers from competitors, and as a result, rivalry intensifies. Third, significant costs vary greatly among firms. Significant costs will lead companies to have different market shares and will bring differing commodity prices to various companies. To take Wal-Mart for an example, a Wal-Mart supermarket is always over 100,000 square feet; however, the average supermarket is only 35,000 square feet. In 2011, the company will not only invest in growing to 12 million square feet of retail space in the US, but they are also planning to remodel stores (Standard Poor’s industry surveys, 2010). Through the example of Wal-Mart, we can know because of its vast size, Wal-Mart has strong ability to bargain with its suppliers, which will allow it to keep fullest advantage and lowest cost. The result of the lower price is to increase sales volumes, profit and cost leverage; at the end, Wal-Mart will increase its market share and keep worldwide leadership in retailing, which means other companies have to face the fact of the power wielded by Wal-Mart. Next, Wal-Mart is the price leader of supermarket industry, and it continually drives down price. The low price of Wal-Mart may not influence the buying decisions of consumers in a short time. However, for a long time, Wal-Mart would make customers to be aware of its lowest price. Even when other supermarkets are close to price parity with Wal-Mart, customers still believe that Wal-Mart’s prices are the lowest, and the Wal-Mart will become the first choice for customers. Thus, the low price strategy of Wal-Mart will become the heavy competitive pressure to other food retailers. Then, there are the strength of exit barriers in the supermarket industry. High investment in property, distribution, and inventories are the three main exit barriers for the supermarket industry. Usually the floor area of a supermarket is wider than other kinds of shops except shopping mall, so if a company wants to leave this industry, the property would become waste. For distribution, usually, customers only see one or two local stores, but they forget that there are still many stores which belong to the company in different areas, so a company generally has a transportation center which is working for sending foods to all stores. If a company decides to exit the industry competition, the investment of the transportation center and conveyance would lose its value. Furthermore, food goes bad easily, so it should be sold in a short time. That is why the inventories not only can not bring profit to retailer, but also becomes a burden to the retailer when a company closes down. Thus, when companies have operating problems and retailers do not want to lose all investment, they always try to do something to change the status quo. At the end, this condition can prolong price wars as firms struggle to survive instead of exiting. Substitute Substitute means two or more different goods have the same function which can satisfy a customer’s need. The relationship between these goods is competition in sale. When one product’s sale goes up, the others’ would go down. For food retail industry, farmer markets, restaurants and homemade foods are the three main substitutes. Generally, a supermarket is not a producer, it is just a broker. It should purchase all products from real producers, and then sell them to customers. Through trading, the supermarket earns the purchase and sale price differentials. So, if real producers can substitute supermarket to become sellers, consumers can buy products in lower price; at the same time, producers can earn more money. Restaurants would also be substitutes. In a restaurant, consumers do not only get some food, but also can get service. So, in some case, restaurants easily become no-price competitor for supermarkets. Home-made food usually lets people feel cleaner. When we eat homemade food, we know where the food comes from, and we can be sure of the food’s safety. Thus, homemade food has opportunity to become the substitute, especially, in inflation, homemade food also can help us to save money. Powers of buyers In normal conditions, we consider that consumers’ food budgets are price insensitive. They do not abandon a close and convenient supermarket for a far but cheaper one. Convenience for shopping is the most important thing for a customer. However, price is a potential risk for food retailers. If a nation always stays in a state of economic recession, the income of people would keep decreasing. When people feel income falling short of expenditure, they have to think more about their budgets and then switch from high margin stores to mass merchandisers. Furthermore, an individual consumer does not have strong buyer’s power to affect the prices of merchandise. For example, if someone goes to Wal-Mart to bargain, no people will care, even the supermarket will call police. However, individual consumers can influence on retailers to sell or not sell specific types of product. For example, more and more people care about health; they want more natural and organic food, hence, â€Å"the natural/gourmet stores’ count increased 3. 0% in 2009† (Progressive Grocer,). Powers of supplier In the food retail industry, food suppliers are not highly concentrated, hence, the larger number of suppliers of food products, the less influence one supplier can have in the market. Further more, food retailers have rights to choose diverse products to sell in a store, but suppliers just can produce only one kind of product, like a beverage company just can produce drinks, but producing clothes is impossible, which means the market for retailers is bigger than for suppliers. If the supplier can not give the retailer a satisfactory price, or the retailer dislikes the quality of product, the retailer can switch to other suppliers who support the same kind of goods in the market easily. Because the switch cost is low, retailers do not need to worry about it. In addition, for some companies which have substantial wealth and economic power, they can even buy out all products of a supplier. In this case, the supplier has such a deep symbiosis with the food retailer; the food retailer will decide the subsistence for the supplier. That is, if the food retailer wants a lower price, the supplier just can sell products at a lower price. Consequently, the powers of supplier are moderate to low. Barriers of entry Economies of Scale can be a barrier to entry. An economy of scale is when you are able to sell more products at the same time; cost of unit product will be decrease, which will bring lower price of products to customers in the supermarket industry. Therefore, I take the labor costs for an example: â€Å"Food retailing is a labor-intensive business, and employee costs represent the supermarket’s greatest operating expense. Usually, labor accounts for more than 50% of total operating expenses† (Standard Poor’s). The wage of everyday and the working time for a cashier are fixed. Customers not only buy food, but also other items, like clothes, auto parts and so on in a big one-stop shopping supermarket, when they check out, cashier should check all the items, not just food. Comparing with a shopping mall which includes many small shops, but normally every shop just sells one type of goods, customers can save more time, and the supermarket just need only one type of laborer to do all the jobs which are separated to different sellers in a shopping mall. But economies of scale for a newcomer to the supermarket industry are hard to come true. The economies of scale not only reduce cost, but also increase the power of company. When a supermarket cooperates with a products supplier, the bigger supermarket has the ability to bargaining with the supplier. Like the biggest international chain supermarket, Wal-Mart, always can sell its items at the lowest price just because of its size and status. If the supplier does not give a good deal to Wal-Mart, they will lose the biggest buyer in the world, which means the supplier will lose unimagined huge sale and profit. However, if a small supermarket, a regional supermarket, hopes to use the lowest price to buy in products, normally, the supplier does not agree, because when he loses this buyer, his market is still there; he still can earn a lot of profit from other buyers. High investment and technological cost make entry into the supermarket industry extremely difficult. The trend of the development of supermarket industry is supercenters: â€Å"Supercenters are huge retail outlets (more than 150,000 square feet, on average) that house a mass merchandiser and a combination food and drugstore in a single unit, and devote as much as 40% of their shelf space to grocery items† (Standard Poor’s). The large size of the building destines a high investment. Otherwise, to make a supermarket more competitive, most existing supermarkets have invested heavily in computer and telecommunications equipment. Like electronic shelf tags, self-scanning checkouts, point-of-sale equipment and quick response program. The more high technology used, the more investment has to be made. In addition, for customers, one size does not fit all. Different consumers have different requirements; a supermarket should respond to consumers’ different needs as much as possible. That is a variety of products is required for any supermarket, and the same product with different sizes or colors should appear on shelves. Hence, economic strength of operator is other barrier to entry into the supermarket industry. Last but not least, distribution decides the state of operation for a supermarket, because the transportation cost is one of the biggest parts for a supermarket. Usually, a supermarket chain includes a distribution center and some stores. Stores are distributed throughout a city, so how to choose a suitable place to build the distribution center to make the shortest distance to different stores is an important thing for a newcomer.