Porters 5 Force Analysis on Ice-Filli

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Ice-Filli | Russian Ice Cream Market | Porters Five Force analysis | | | | | Executive summery In the Russian ice cream market many economic factors have caused the market to fluctuate up and down over the years. These economic factors have affected the barriers to entry, power of suppliers, power of buyers, substitutes, and competitive rivalry within the industry. In this paper I am going to cover each one of these five forces, discus whether these forces are high or low within the ice cream market, and how the economic factors were a big part of how the market came to be. Barriers to Entry There are a variety of factors in regarding the barriers to entry for competitors to establish themselves in the Russian ice cream market, I will go on to list and describe them. Supply-side economics of sale are high because companies must enter the market on a large scale in order to compete in price and distribution levels. Also, in order to produce and store ice cream companies are presented with high fixed costs. These costs include factories to produce and make ice cream, large warehouses to store and refrigerate the ice cream in order to keep the product from melting and going bad, and methods of transporting their products to various distribution areas such as Kiosks, gastronomes, and minimarts. In order for a new ice cream company to come in and compete on a large scale they would be presented with large upfront investments which may prevent them in entering the market. Demand-side benefits of scale are low based on the fact that consumers don’t rely on ice cream and do not need to consume it every day. It is considered a snack or “comfort” food and not a must have product and has very little brand loyalty. Therefore, ice cream consumption is very unpredictable and fluctuates easily due to its seasonal perception. Switching costs are low for

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