Sift Cupcake Case

2. How strong are the competitive forces confronting Sift and other specialty bakers? Which one of the five competitive forces is the strongest? Prepare a five-forces analysis to support your answer.

1. Suppliers of raw materials, parts, components, or other resource inputs: Weak. The materials and ingredients being used by Sift and other specialty bakers can be bought from any stores.

2. Firms in other industries offering substitute products: Very strong. There are many different places that customers can buy cupcakes including big companies such as Wal-Mart. Also, there are many substitute products for cupcakes such as cakes, pies, cookies, etc. practically anything in the bakery section of most convenient stores. Some substitutes may even include baking the cupcakes or baked goods at home themselves or by family members.

3. Potential New Entrants: Moderate. Entering into the cupcake business is easy since the cost of entering into the market is not costly, but surviving will be difficult since there are so many competitors in the market too.

4. Buyers: Weak. There are many buyers in the market that causes the businesses not to compromise on a price. Business can turn down any customers and move along to the next one that’s willing to buy the cupcakes.

5. Rivalry among competing sellers: Strong, because there are so many other companies and places that sell baked goods that without a competitive advantage over other sellers, buyers will leave one business for another with no hesitation. Most customers/buyers believe that every cupcake business is the same with very little differentiation.

5. Which of the company’s resources and capabilities have the greatest competitive power? Are Sift’s resources and capabilities (1) competitively valuable, (2) rare, (3) difficult to copy, and (4) not easily be trumped by the substitute resources of rival firms. How well do Sift’s resources and capabilities match up with the industry’s key...