Sample Solution

sustain in this competitive industry, A2 milk can get supplies from multiple suppliers, more flexibility within its supply chain. Or they can encourage better relationship with the supplier can benefit on both sides.

The extend of rivalry between competitors

This factor determines competitive level in the industry, whether does the firms have control over the prices of goods and services (My Accounting Course, 2019).

If the rivalry among the existing companies in this industry is intense it will result to decrease in prices and profitability. A2 Milk operates in a very competitive industry. This competition does take toll on the overall long term profitability of the organization. To stay in such a competitive market, A2 Milk needs to focus on differentiating its products so that competitors will have less effect on its customers that seek its unique products. As the industry is growing, A2 Milk can focus on new customers rather than winning the ones from existing companies. The A2 Milk can conduct market research to understand the supply-demand situation within the industry and prevent overproduction.

Conclusion on Industry Analysis

In conclusion, by analysing all the five competitive forces of A2 Milk strategists can gain a complete picture of what impacts the profitability of the industry. They can identify trends early on and can quickly respond to exploit the emerging opportunity and shape forces in their favour.