Ryan And Safi Companies

           With a high competition market, it’s important to utilize the strategy tools to study the competition for both current companies and potential entrants. To be clear, For the current business, it is important to evaluate the market and miniating the business performance to generate more profit. On the other hand, the new entrants need to put on their consideration that the market barriers and the business visibility. I believe that reading "The Five Competitive Forces That Shape Strategy" and the "Cola Wars Continue - Coke and Pepsi in 2010", provided me the knowledge in how to apply these tools to analysis the market. These tools allow me to identify the risks of five components that might any business faces. The five forces that Michael E. Porter mentioned it in his article , “The Five Competitive Forces That Shape Strategy” are  threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products and rivalry among existing competitors. These forces allow the current business to create a comprehensive strategy analyses to overcome new entrant’s competition challenges.

The threat of a new competitor should be included in the company business strategy. The negative business relation with customer can utilized for the competitor. For Example, In  Saudi Arabia , dairy market was dominated by  two large dairy companies Nadic, ALMarai. They been in the market for a long time and created oligopoly market. They had an agreement to set the price at same rate and the individual buyer could not find alternative substitute. For instance , the 150 ml milk was priced at .5 cents and it was hard to have discounted milk . in 2003, tow new entrants, Ryan and Safi, decided to compete these companies and established the milk factory. Both Nadic and ALMarai started price war by lower the price to 50%. They thought reducing the price will cause harm to these new 2 companies. Instead, the new companies gained almost 60 % of the market share and the buyers were able to find a new substitution. Nowadays, the dairy market price are stable and meet the customer needs. To conclude , the new milk factories have a positive impact in the dairy market . they benefited the consumer by provide a high quality of product substitute and reduce the milk product into 50% . Also, both new companies, Ryan and Safi ,  used the substitute products of services force and were able to compete successfully with exited companies . the exited companies did not study the market enough and did not expect the new entrants threat