Native Floral Group Company: the Five Force Model

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Table of Contents

Bargaining Power of Suppliers
Buying Power of Customers
The threat of New Entrants
Threat of Substitutes
Competitive Rivalry

Bargaining Power of Suppliers

Native Floral Group has alliances with 473 farms all around the world. This reduces its cost thereby provides it with the edge to offer highly competitive prices to its customer. Bulk supply allows lower cost and competitive pricing.

A large number of suppliers.
Alliances with 473 farms worldwide.
Procured directly from growers on a global level.
Bulk purchases reduce costs.
Strategic placement across the US provides transportation advantages for procurement procedures, sourcing techniques.

Buying Power of Customers

Native Floral Group appears to have good control over its pricing due to various reasons. The state of the art technological tools employed by the company, including coolers maintained at 34 degrees, climate-controlled production areas, and a fleet of owned trucks. Besides, the distribution and logistics strategies that are employed by the company in its several strategically placed production capacities in several cities across the country, give it the added advantage over its customers, with its high-quality products and services.

High demand.
Strategic placement all across the US for enhanced distribution.
Excellent transportation facilities for the distribution process.
Proximity to major cities and stores.
Increasingly popularity of online trading.
greater quantities and varieties of flowers for sale.
heightened competition from emerging countries.
Online Services preferred.

The threat of New Entrants

With pressure on its global expansion plan and the threat of new companies entering the arena, Native Floral Group seems to be under pressure. Moreover, its lack of a website with online business plans, makes it vulnerable to future threats of competition.

New Entry Easy – Easy to enter the Canadian Industry. Canada with an index rating of 81.6% and an (IBA global average) of 64.5%, makes it easy to establish a foreign-owned (LLC) within 6 days and only 2 procedures.
Government subsidies of up to 50% funding to firms with revenue for farmers
Several tax incentives to natives to set up a new business in Canada to generate the necessary revenue
Low barriers to entry
Easy to expand globally with online setup
Economies of scale
Distribution and logistics strategies help in reducing costs and expenses
Legislative and government action – Constant measuring of impact measurements, especially environmental. Social impact on workers rights, pesticide use
Limited financial capacity to grow business overseas
Experience and technology needed to expand globally

Threat of Substitutes

Native Floral Group needs to understand the changing dynamics of global economic conditions to move toward sustained growth and development. Some factors which threaten the company are:

Brand loyalty – changing consumer attitudes
the increasing popularity of online trading
Cross product substitution
Competitive pricing with substitutes

Competitive Rivalry

Native Floral Group seems to have an edge over its competition due to its strategic placement and ability to procure cut flowers worldwide, purchase in bulk to low production costs.

Native Floral Group thus has an edge over its competitors due to

highly competitive pricing.
transportation facilities located near major cities.
High-quality production processes.
Highly trained staff.
Its experience of the industry knowledge, its leadership, history.
No online exposure or plans for future.
Limited resources for setting expansion in other parts of the world.

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Native Floral Group Company: the Five Force Model

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