Dakota Growers Pasta A Case Study In Strategic Management

Essay by ncognito2212University, Master's March 2005

download word file, 16 pages 3.0

Dakota Growers Pasta

Competitive and Industry Analysis


The Management Team

College of Business Administration and Public Policy

In partial fulfillment of the requirements of Strategic Management Seminar


March 23, 2005


TO: Dakota Growers Pasta


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.

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...