Bargaining Power of Buyers (Customers) High/Medium/Low:
1. Salty Snacks are a convenience item located everywhere. Consumers have a variety of alternatives to choose from for each product in the category, and they are conveniently located in areas where they are likely to be an Impulse Purchase. Many consumers would purchase an alternative product if a certain product were out of stock, or if the product’s price increased higher than the competition. (High)
2. Due to long shelf-life, stores are not as pressured to move Salty Snack products as quickly as they are for other more perishable snack categories. This gives stores less incentive to compete on price with alternatives. (Low)
3. Even though there is a great variety of options in the space, many consumers have Brand Loyalty to certain brands that they have positive associations with. These consumers would be more likely to pass up alternatives in favor of certain brands. (Medium)
Bargaining Power of Suppliers High/Medium/Low:
1. Modern salt mining techniques have greatly increased production and driven the cost of salt to historic lows due to an over-abundance in availability for the mineral. (Low)
2. Salt mining aside, most of the ingredients of Salty Snacks are naturally grown. Farming is a Perfect Competition industry, with very low barriers to entry and little-to-no product differentiation. This means that there are a lot of suppliers, all competing on price. (Low)
3. The ingredients of Salty Snacks are grown/mined in several different countries. Each country desires the economic benefits of exporting their goods and have a strong motivation to compete over price. (Low)
Threat of Substitutes High/Medium/Low
1. During Covid, salty snack sales outpaced other snack categories. However, consumers have a growing array of snack options leading to increasing competition. (Medium)
2. Health conscious consumers may seek out low-sodium snack options. Salty snacks are considered an un-healthy indulgence food, and 41% of adults say they are putting a higher priority on healthy eating. Also, salty snacks are associated with weight gain and 50% of women and 40% of men say they are trying to lose weight. (High)
3. With current economic uncertainty, foods with long shelf life are in-demand. Even with Covid fears easing with the release of the vaccine, experts believe that there will be consumer hesitancy to return to restaurants. This should lead to a sustained demand for long shelf life foods as consumers stock their pantries instead of dining out. (Low)
Threat of New Entrants High/Medium/Low
1. Salty Snacks is a broad category with a great variety of options. This means that it will be difficult for new companies to compete, because they would have to find an unmet need in an already crowded market. (Low)
2. Salty Snacks is a mature market with well-established distribution chains. This gives the advantage to established brands who already have shelf space. New entrants would have to convince store chains to give-up coveted shelf space to their unproven product, and that will be an uphill battle. (Low)
3. Salty Snacks is considered a comfort food and consumers are more likely to turn to established brands that they already associate with comfort and indulgence. New entrants would need to persuade consumers to pass up snacks that they already cherish to try a new, unproven product that they have no associations with. (Low)
Intensity of Industry/Competitive Rivalry High/Medium/Low
1. Consumer’s are interested in trying new unique flavor combinations. This gives an incentive for established brands to experiment with adding new flavor options to their product lines. This leads to competition between brands as they each strive for innovation. It also creates an opening for new brands that have a fresh take on the category. (High)
2. Convenience-oriented consumers will grow online sales in the snack category. This gives an edge to companies that create a strong online presence or make themselves more readily available to purchase online. This leads to competition between brands to capture this growing market. (High)
3. The Salty Snacks market is crowded, giving consumers a variety of options to choose from in each product category. There is intense pressure for each brand to differentiate its products and grab market share from its competitors. (High)
