1. Critical analysis of Nippn
| Identification of the industry in question | ||
| Environmental Factor | Issues pertinent to the industry | |
| Political factors | · The international firms are creating a pressure on the Japan government to make the rules more strict for the food processing industry.
· Nippn have to focus on following all the rules and regulations made by the local government. · Political stability of all the different nations in which the case company is operating is having an higher influence on the firm. |
For managing the political implications which are being faced by the firms operating in the food processing industry it is essential that the government should support the industry. For this the taxes can be reduced by the government. Along with this if the political stability is being maintained in all the different nations in which the firm is operating then it can help the firm in surviving in the market. |
| Social factors | · Increasing liberalisation is creating a threat for the flour mills operating in Japan.
· Migrants are not welcomed in Japan due to this reason Nippn can face issues in having diverse workforce in the company. |
Market trends and the shifting customer demand need to be understood then the food processing industry should focus on offering effective products to their customers (Mor et. al. 2018). |
| Technological factors | · Latest technologies which are being used by the competitive are creating pressure on the case company.
· For remaining competitive in the food processing industry it is important for the company to use latest technologies (Juliana and Nyoman, 2019). |
Technological advancement is required in the food processing industry which can help the firm’s in remaining innovative and more competitive. |
| Economic factors | · Availability of the great infrastructure in Japan is an favourable factor the case company.
· The declining downward pressure on the consumer spending is affecting the firm’s sale negatively. · Higher availability of skilled labour is also an important benefit for the case company. |
All the different factors related to the economy such as customer spending, inflation rate, GDP, economic growth all are required to be considered and then the industry should decide the price and manage the firm operating in the industry. This will help them in managing the impact of the economic factors on the firms operating in the food processing industry. |
| Porter forces | Strengths | Justification |
| Bargain power of suppliers | Moderate | There is large number of suppliers in the food processing industry. But the case company focuses on having high quality raw material. Due to this reason the bargain power of the suppliers is moderate. If the suppliers charge higher from Nippn then it can affect the average profit of the case company. |
| Bargain power of buyers | High | Due to large number of flour mills the bargain power of customers is higher. For the company need to keep their price low and need to offer different products which can help them in attracting the customers and reducing their bargain power. |
| Threat of new entrance | Low | Threat of new entrance is low because entering into the food processing industry is not easy. Due to higher rules and regulations it is quite challenging for the firms to enter into the food processing industry (Khouryieh, 2021). |
| Threat of substitute | Moderate | The threat of substitution is moderate due to large number of companies operating in the food processing industry and different alternative to flour are also available. For this it is essential for Nippn to focus on their Research and development which can help them in gaining competitive advantage over others and reducing the threat of substitution also. |
| Rivalry | High | Competition is higher in the food processing industry due to this factor companies need to use effective marketing strategies and product differentiation which can help them in surviving in the industry. Along with this effective strategies related to business management are also required for coping up with the competitors. |
| Stage in the industry life cycle | Maturity | |
| Implications | Nippn flour mills is at the maturity stage of the Industry life cycle. The company is doing well in the industry but now their sales is not increasing much and nor their profit is increasing which shows that the company is in the maturity stage in the industry life cycle. Better strategic actions can help the company in surviving in the industry for a longer period of time and generating better and sustainable profit in the food processing industry. | |
| Issue | Survival Factor | Success Factor |
| · Low loyalty among the suppliers is creating issues for the company in managing the demand and supply.
· The niche market and the local monopolies are creating issues for the firm. |
· Continuous improvement in the business operation management
· New product mix is helping the company in remaining competitive in the industry and is helping them in surviving the market. |
· Working effectively on the innovation
· Effective leadership · Better talent management in the firm (Oliveira et. al. 2019) · Effective brand image in different customer segments · Success of the new product mix is leading the company towards success |
References
Juliana, J.P.E. and Nyoman, Y.N., (2019). Factors influencing competitiveness of small and medium industry of Bali: Porter’s five forces analysis. Russian Journal of Agricultural and Socio-Economic Sciences, 89(5).
Khouryieh, H.A., (2021). Novel and emerging technologies used by the US food processing industry. Innovative Food Science & Emerging Technologies, 67, p.102559.
Mor, R.S., Bhardwaj, A. and Singh, S., (2018), March. A structured literature review of the Supply Chain practices in Food Processing Industry. In Proceedings of the 2018 International Conference on Industrial Engineering and Operations Management, Bandung, Indonesia (pp. 588-599).
Oliveira, C.A.O., Ruffoni, E.P., Maçada, A.C.G. and Padula, Â.D., (2019). Innovation capabilities in the food processing industry in Brazil. British Food Journal.
