Developing a strategy in the competitive environment of the dairy industry based on Michael Porter's five forces model (a case study in Doshe Haraz Amel Dairy Company)

Dissertation

Master's degree

Department: MBA Management

Abstract

This project was conducted with the aim of investigating the competitive environment of the dairy industry based on Porter's five forces model in Doshe Haraz Amel Dairy Company. The competitive situation in an industry depends on five basic forces. The joint power of these forces determines the final profit and potential of each industry. The combined power of the forces may be clear to everyone, but to deal with them, dairy industry strategists must go deep and analyze the sources of competition. The statistical population of this research, which was selected by simple random sampling, is 20 people. After collecting the data through a questionnaire, it was analyzed using spss software and based on the results, a significant relationship was found between each of Porter's forces with the company's sales and market share. Also, the effect of buyers' bargaining power is greater than other forces, so the company's strategists should focus more on the buyers' bargaining power. Keywords: strategy, competitive environment, dairy industry, Michael Porter's Five Forces Model, Doshe Haraz Amel

Chapter One: Introduction and Research Principles

Introduction:

In today's changing environment, Varshad must have a competitive advantage over its competitors in order to be present in the competitive market. Outstanding products, advanced technology and the like, if they are not effective in creating a competitive advantage, they will have no effect on the company's success, and strategy is an approach that seeks to create a competitive advantage. Competitiveness is one of the important and key concepts that has attracted the attention of many management, economics and international business researchers in the last two decades, and many definitions from different perspectives have been presented for it. One of the models used to analyze the competitive environment in an industry with the aim of formulating the necessary strategy is Porter's five forces model. The basis of this strategy is based on competition. The effort to gain more share in the competitive market is not only manifested in the movements of competitors, but the competition in an industry is rooted in economic principles and competitive forces that are beyond the competitors. Customers, suppliers of raw materials, potential newcomers and substitute goods are all competitive factors that may be more or less prominent and active depending on the type of industrial field.

Today, competition has become one of the important topics in the field of sales and marketing and is placed on the main agenda of companies. In a healthy competition, continuous improvement of processes and methods reduces costs and constantly increases the quality of products and services. In such circumstances, non-competitive organizations are bound to change their structure or leave the business scene. Therefore, competitive analysis is effective not only in formulating business strategy, but also in the field of financing companies, marketing, security analysis and many other business areas. Such an analysis provides a comprehensive framework of analytical techniques and gives the company the ability to analyze the industry in its field of activity in general and to predict its progress in the future, to know the competitors and to better understand its position. Many researchers have presented theories and models to justify and interpret competitiveness and the factors affecting it, and they have categorized the factors affecting competitiveness and presented them in the form of models. These theories and models also have a relatively large variety.

In the book Competition for the Future, Gary Hamel and C. who Prahald [1], (1994) proposes a new approach to strategy. They introduced the concept of organizational core competencies and suggested that organizations try this method so that they can perform better than others. By mentioning past experiences, they point out the risk of losing competitive advantage and emphasize the importance of letting go of organizational assumptions and formulating a dynamic attitude about the future. [5]

They define "core capabilities" as collective learning in the organization and especially the coordination of diverse production skills and the integration of various technological flows. Hamel and Prahald ask organizations to look at their core capabilities and analyze how they can perform better and overcome competitors in a competitive environment.Evaluating the organization as a system of activities and construction complexes, they raise these questions:

• To what extent does X activity improve the final product for the customer?

• Does X activity enable access to a range of applications and markets?

• If we lose the power of X activity, what will happen to our competitive power?

• How much for Is it difficult for others to imitate X's activity and compete with us?

In order to understand the potential power that the core capabilities create, the people of the organization must imagine new markets in their minds and have the ability to reach these markets by advancing the competition. One of the keys to core capabilities and effective competition is the process through which the organization realizes its ideas. [5] [

At the beginning of the 1980s, Hamel's discussions, under the title of organizational development, were no longer based on strategic factors but on growth. Companies sought to achieve better conditions through downsizing, reengineering [2] and total quality management [3], and their goal was to achieve the best practices so that others could imitate them. The result of all these booming developments was to reduce costs to a point where there was no room for profit.

According to them, there are various factors that are changing the nature of competition. These factors include:

Removal of government supervision and privatization - 1

2- Division, disintegration and increase in the number of new entrants into industries

Change in customer expectations based on price, quality and service - 3

Continuous technological development, especially through the Internet - 4

5- Changing the boundaries of control and authority because the workforce has become more powerful has become and is no longer layered.

6- Change in loyalty, because; People have become the most valuable and at the same time the most consumable asset. 

7- Decreasing the value of experience, because changes are the foundation of the future [5]

But among these, Michael Porter's five forces model has a special importance and position. The competition in today's markets is more extensive and diverse compared to the past. Many companies in this environment are trying to achieve a competitive advantage by formulating appropriate competitive strategies and by increasing the competitiveness of their products, to provide the growth and development of the company. Porter linked strategy, business and economics together. Porter's five competitive forces model is world famous.

1-2-Problem definition:

Today, the food industry is one of the most important and widespread industries in the world economy. The ever-increasing growth of the population, the diversification of consumers' tastes, the increasing importance of the health of food products, healthy eating as a factor in preventing the occurrence of many diseases, the role of food in human life is becoming more prominent today.

Milk and its products are considered as one of the most important food items. Dairy products provide a significant part of the daily energy required by humans, and the consumption of these products can guarantee the physical health and longevity of a person. Considering the role of these products in human life, any activity that somehow affects the process of their production and supply is important and should be analyzed in a proper way. Therefore, in this research, an attempt has been made to evaluate and analyze the situation of the dairy industry with a comprehensive and useful view, so that finally an accurate and practical picture of the existing situation is conveyed to the reader. In this regard, using the method presented by Michael Porter in his competitive model, we examine the dimensions and aspects of the industry and analyze each one. This model is undoubtedly one of the most common business strategic tools and has proven its effectiveness many times.

In Porter's five forces competitive analysis method, we deal with five main competitive forces, which are:

1- Competition among current competitors: is there intense competition between current competitors, are all competitors at the same level or are some stronger.

2- Bargaining power of buyers: what is the position of buyers Vaya can order a large volume together.