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Tyson Foods Inc Industry Analysis

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Industry Structure
Size and Number of Firms in the Industry
In the United States, there are approximately 6,349 firms in general line grocery merchant wholesaler industry. As stated in the Census Bureau, the largest four firms generated 38.2% of the revenue in the entire industry (Classification Development Branch, 2010). The top four firms in the United States are Gerber Products, Abbott Nutrition, ConAgra Foods, and Tyson Foods (Classification Development Branch, 2010). According to IBIS, “Revenue tends to fluctuate with variable fuel costs, food product prices, and consumer spending. The most pressing threat to the industry’s overall growth is wholesale bypass. As demand for ethnic food increases, it will provide an opportunity for grocery …show more content…

As retailers became larger through growth and acquisitions, they have purchased more of their produce directly from grower-shippers and less from produce wholesalers. To survive, produce wholesalers have increased the services they provide, diversified their customer base, and expanded their product mix. The produce wholesalers have taken on fresh cut services to meet new market demands for convenience and fresh-cut produce and been primary suppliers of emerging products, such as organics, before they become mainstream items” (McLaughlin, E. & Park, K., n.d.). In addition to price competition, there are also some examples of non-price competition in the wholesale grocery industry. Almost every product faces these non-price competition issues. Nevertheless, tomato sauce usually runs for the same price. How do you know which brand is better unless you have previously tasted it? Even when a product is the same price, people still look at other attributes that make products stand out from one or the other. Personally, I like the look of the Hunt’s sauce better so I choose that one every single time. Another form of non-price competition in this industry is the simple placement of the goods in the store. If someone is in a hurry, they may not walk all the way to the back of the store for frozen broccoli. They would potentially settle for fresh broccoli and rationalize this decision by the convenience of placement, and the fact that fresh is always a better choice over

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Tysons Food Financial history Stock Performance Highlights • 52 Week high: $47.71 • 52 Week low: $37.10 • Current share price is $43.10 Other info • TSN made an acquisition of the Hillshire brands company in 2014, because of this revenue was boosted 9.33% in 2014. • Tysons food sold its Mexico and Brazil poultry business to JBS and uses the proceeds to cover the debt from Hillshire brands. • TSN is the leading meat processor ,because its market capitalization is $17.51B • Because there are limited options of protein rich foods threats such as alternatives to TSN product is not a matter that is concerned much by the company which TSN will retain market leadership • In the last 5 years TSN stock has had a return of over 173 %, but the S&P index

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Like most companies, Tyson Foods is not invulnerable to threats from other companies or external elements that the company can’t control. The company has not been able to tackle the challenges present by the new entrants in the segment and has lost small market share in the niche categories. Tyson Foods has to build internal feedback mechanism directly from sales team on ground to counter these challenges. Financial planning is done improperly and inefficiently. The current asset ratio and liquid asset ratios suggest that the company can use the cash more efficiently than what it is doing at present.

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The price of raw materials is high with low consumer switching cost. However, the increasing demand for healthy and organic food is creating openings for smaller competitors to enter and hide from the pricing

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Although the bargaining power of buyers is low, and the threat of new entrants is low, the potential to increase profit cannot be justified. The first thing that we used in making this decision is the bargaining power of suppliers. The shortage of pea protein causes a large threat in the potential to make profit because pea protein is an essential part in plant meat production. If a supplier is unable to supply pea protein or unwilling to sell the protein at a profitable price production will be slowed in a market where a high supply of product is vital to success. Next, we looked at the moderately strong threat of substitutes.

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This industry will be faced challenged when the location is not easy to be reached and the population of the areas are not much as expected. For example, the Aeon supermarket at Mid Valley Megamall Kuala Lumpur, the sales of this location is guaranteed as the population daily at Mid Valley Megamall in 120,000 peoples approximately (malaysiandigest, 2014). Other than that, most of the supermarket are operates or leasing in a popular shopping malls. This is because peoples nowadays are not going to supermarket on usual day or without purposes. For instance, Giant hypermarket at Plaza Sungei Wang is a good example.

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