Power of Suppliers of Olfrute

420 Words2 Pages
Power of Suppliers: Engro Foods prides itself on the fact that their revenues also benefit the agriculture industry of Pakistan. They have long been getting their supplies from farmers; supplies such as milk, fruits, meat etc. Engro’s Olfrute juices are made from the nectar taken out from these fruits and sugar and other concentrates from different suppliers. Olfrute has a few selected farmers (around 200,000) that it gets its fruits from but it has one standing supplier when it comes to sugar and concentrates. Olfrute has the choice of switching between the few farmers it has but it cannot switch when it comes to sugar supplies as there is alternative for Engro Foods. This gives Olfrute power over the farmers as it can make demands and if they are not met, Olfrute supplies can be brought it from another farmer. The sugar supplier, however, has more power as Engro has no other option and hence has to go along with mediated demands that both the parties are okay with. Both the suppliers, that Engro Foods has, in regard to Olfrute, supply ordinary products. In the case of the farmers, they supply most of what they hope to make their money off of and Engro Foods has many options when it comes to getting fruits supplied. This shows that Engro Foods has more power over farmers. This power is again offset by the sugar supplier as they are limited to one and have no other alternatives when it comes to the specific kind of sugar and concentrates that they need for Olfrute. Engro has no threat when it comes to its suppliers becoming its competition as both the suppliers only supply the basic ingredients needed to make the Olfrute juices. Engro can only move to different suppliers in the case of the farmers they have but not in the case of the of the sugar supplier as they have no other alternatives. The extent of the information Engro has on both the suppliers is

More about Power of Suppliers of Olfrute

Open Document