Dakota Growers Pasta
Competitive and Industry Analysis
By
The Management Team
College of Business Administration and Public Policy
In partial fulfillment of the requirements of Strategic Management Seminar
Instructor:
March 23, 2005
MEMORANDUM
TO: Dakota Growers Pasta
FROM:
SUBJECT: Competitive and Industry Analysis
DATE: March 23, 2005
Management's success is determined by building an understanding of the firm's industry and matching its strategy to changing conditions and competitive realities.
Industry and competitive analysis aims at developing insightful answers to seven questions:
1. What are the industry's dominant economic features?
2. What is competition like and how strong is each of the competitive forces?
3. What is causing the industry's competitive structure and business environment to change?
4. Which companies are in the strongest/weakest positions?
5. What strategic moves are rivals likely to make next?
6. What are the key factors for competitive success?
7. Is the industry attractive and what are the prospects for above-average profitability?
The Pasta industry's dominant economic features are market size and growth, the number and relative size of both buyers and sellers, whether sellers are vertically integrated, the extent of scale economies, changing technology, and whether the products of rival sellers are standardized or differentiated.
Durum Wheat crop
Preparation of pasta: durum wheat and eggs
Whole wheat penne pasta, cooked (right) and uncook...There were 13 major companies that milled durum wheat in the United States. The use of lower cost technology had eased the way for new entrants into the pasta industry and had brought product innovation. The industry's revenues were valued at $2.6 billion. There were four principal dry pasta market segments: ingredient (43 percent), private- and brand-label retail (37 percent of the market), food service (10 percent), and government bids (10 percent). Within each segment, there were both private-label and brand-label products.
Competitive forces help pasta producers identify and measure the strength of competitive pressures that exist, and gain understanding...