The Porter 5 Forces model summarizes the beer manufacturing industry as having: 1) Low threats of new entrants due to high capital costs required and government regulations. 2) High bargaining power of buyers as disposable income affects preferences for premium vs. lower priced brands. 3) Low threat of substitutes due to customer loyalty, though advertising restrictions make loyalty harder to achieve. 4) Low bargaining power of suppliers as products are inexpensive and numerous alternatives exist. 5) High intensity of rivalry among competitors despite Kingfisher being a large supplier.

1. 5 FORCE MODEL Porter 5 Force Model Presented By: Joel M PaisMBA – 2011Aloysius Institute of Management and Information Technology(AIMIT)

3. Threat of new entrants Threats of new entrants are towards lower side. The capital needed to build beer manufacturing facilities and the costs associated with operating business on a national scale are expensive. The cost associated with this highly controversial industry seek high levels of sales, thus making the industry more and more prohibitive for newcomers. Government regulations are largest factor in this force.

4. Bargaining power of buyers Barraging power of buyers is high. The quantity of alcoholic beverages that a nation consumes tends to be unaffected through recession and prosperity while the quality of the products purchased is directly related to the disposable income. A decline in disposable income shifts consumers preferences away from premium-priced brand-name products in favour of lower-priced brands i.e. switching cost is low.

5. Threat of substitutes Threat of substitutes is low. Customer loyalty through brand awareness. The advertising restrictions placed on alcoholic beverage industry in recent years make it harder to achieve brand loyalty.

6. Bargaining power of suppliers Suppliers’ power is low. Products used to brew beer are inexpensive and suppliers are numerous. Intensity of rivalry among competitors Through the competition is tough, the kingfisher brand is the one of the largest supplier of beer, & the third largest procedures of distilled spirits.