One of the industry's economic features include market size. The market size of the donut industry in the United States was a 4. 7 Billion. Americans consumed an estimate of 10 Billion donuts annually.
The scope of competitive rivalry is global in this industry. Market growth rate for the donut industry was a few years on a small rise but in the recent years is continuing to grow steadily. The stage of life cycle of the donut industry is in the infancy of its because all of the donut industry companies are all introducing new products such as coffee and other beverages to their businesses that are aiding in the growth of this industry. Other economic features include the number of rivals in this industry.
Within the donut industry the rivals are concentrated and dominated by a few large companies. One of the large donut companies include: Dunkin Donuts. Although, there are small mom and pop donut companies, the majority of donut companies are large and dominate the donut industry. The largest donut industry leader, Dunkin Donuts, has sales that are estimated to account for 45 percent of the US market share based on dollar sales volume. In addition, moderate entry barriers exist in the form of capital requirements to build a new Krisy Kreme store was in the range of 1 to 2. 5 million The pace of technology and innovation in the donut industry was improving.
Some of the donut companies were upgrading their donut making process by obtaining new equipment in the manufacturing process to help aid in a producing a better donut faster. In addition, donut companies were introducing new products to their companies such as beverages and bagels. With that said, products and services of rival companies were somewhat differentiated in that some of the companies would put more emphasis on coffee and convenience. For example, Dunkin Donuts focused on the emphasis whereas Krisy Kreme focused on a unique tasting donut with beverages included as an added convenience. Scales of economies in this industry are moderate. Key donut industries are located all over the world.
At first on of the key donut companies, Krisy Kreme, was located in the southeast region of the United States but has expanded now throughout the United States. 2. Apply Porter's five forces model (pp. 79 - 93 of the text) to the industry.
Describe if the force is strong, moderate, or weak. The five competitive forces of Porte's model include: 1. Rivalry among competing sellers in the industry. Within th.