Positioning in 5 Forces
This section will discuss Porters 5 forces of competition and Pompeian is situated in each element. Company’s need not only to focus on the impact of their direct competition but also other external factors that could influence their strategy.
Threats of New Entry (Entry Barriers) – Pompeian needs to evaluate how other companies could enter the olive oil market and how quickly they could become a national distributor of the product. This threat is a low one for Pompeian, the barriers to enter are high for this industry. An early difficulty for a start up company would be sourcing product, many of the distributors have relationships and proven track records with suppliers making it hard for an unknown person in the field…show more content… US consumer use almost 30 times more soybean (vegetable) oil and 8 times more canola oil than olive oil, many of consumers who choose Pompeian because of their price, would likely go back to soybean oil and not stay loyal to olive oil. Other substitutes for olive oil have entered the market and Pompeian has started to distribute these types to compete for that small market share. Another way that the company has strategically placed itself in the other edible oil market is with the blended oil, this blend is able to be used in high heat cooking, frying, where olive oil is not the best option and the price is lower per ounce than pure olive oil. Even with the inroads in the specialty edible or blended oils, the oil category still poses a large threat to the company. Vegetable and canola oil industries have advertising campaigns noting the health benefits comparable to olive oil, this advertising and lower cost of soybean oil is a direct threat to the…show more content… First the end users, the consumer for cooking oil has changed tremendously over time and continues to change with the social environment. In the past, it was common for a household to purchase a Gallon sized tin and use the oil as needed, today, Gallon sized tins are seen less on supermarket shelves, large sizes have moved to plastic and are commonly purchased in Club stores. Pompeian and other brands need to concentrate efforts on how millennials shop, prepare food and notice advertising. Website design is important to feature recipes that are easy, quick and will keep your product in mind when the end consumer goes to the shelf. Varied pack sizes are essential to the company’s growth, most new users to a product will not purchase a 1-2-liter size but would instead chose a ½ liter, pricing and promotions need to be maintained for all