No Pudge!

External Analysis Summary

Dominant Economic Features

* Pricing and availability drive the food industry. No Pudge! can continue their pricing strategy because customers are willing to pay a premium for healthier products.

* Product availability influences sales. The lack of product availability in the Southwest and Canada has proven problematic for expected growth.

Strength of Competitive Forces

* Rivalry among existing competitors

* Current rivalry is low to medium. Betty Crocker and Duncan Hines have begun their own fat reduced mixes that are one dollar cheaper to fat free mixes.

* No Pudge! and Krusteaz are the only current competitors that produce solely fat free mixes.

* Buyer Power

* Buyer power is medium to high. Manufacturers of brownie mix rely on retailers (grocery stores) to sell their products. Retailers’ revenues are affected by introduction of new products.

* Competition makes retailers more willing to open their shelves to new products. In order to maintain a sustainable competitive edge.

* Substitute products

* Threat of substitute products is low to medium. Currently only two providers produce only fat free brownie mix.

* No true substitute is currently available, but can easily be produced by industry rivals.

* Online blogs are a way for people to share recipes. There are blogs with homemade fat free brownie recipes that can create their own without leaving the house.

* Threat of New Entries

* Threat of new entry is low. No Pudge! has market niche dominance on fat free brownies. The market would be difficult for new small firms due to retailers slotting fees ranging from $2,500-$25,000.

Likely Strategic Moves of Rivals

* Introduction of fat free products.

* Attempt to overrun No Pudge!’s guerilla marketing tactics with larger campaigns.

* Offer buyout of recipe and/or company.

* Larger companies have the capital to purchase the majority of the...