|
|
|
|
|
GIVE AN ACCOUNT OF THE MAIN FACTORS THAT EXPLAINED THE CHANGING NATURE OF COMPETITION IN THE SNACK FOOD INDUSTRY UNTIL THE LATE 1970’s.DISCUSS THE NATURE AND THE CAUSES OF ANY CHANGES IN THE COMPETITIVE CONDITIONS OF THE INDUSTRY SINCE THEN
|
|
|
By European standards the British spend higher than average amounts on both savory snacks (principally crisps) and breakfast cereals. Snack foods are a central part of most weekly shopping trips for most consumers, although bagged snacks are a relatively new development. The potato crisps particularly had played a significant role regarding the English eating habits since 1950’s they have been a part of their lifestyle and English tradition. Nowadays (potato chips) are the most frequently eaten snacks in the UK. Crisps began in this country in 1920 in London by Barrow of Cricketwood with Smith’s selling fried potatoes according to an American Indian recipe. For many years Smith’s was the leading crisp supplier and its small packet of salt in the bag was a well-known feature of the packs. Benson crisps PLC which is another well established UK supplier entered the market in 1941 and followed a few years later by Golden Wonder in 1947 and Walkers in 1948. By the 1950’s Smiths had grown into an incredible empire. At the end of the 1950’s it had around fifteen factories. Fifty percent of the business was to the pubs and twenty percent to the grocers. In 1961 the Imperial Tobacco Company acquired Golden Wonder and immediately set up changes in the industry. In the following parts it will take place an analysis of the changes in industry over the year till now days. Smiths’ golden era The crisps were the glamour product of the sixties, much of this success was a result of the intensified advertising and general marketing campaigns that accompanied new entry competition during the early years of the decade. (Alan Bevan, Journal of Industrial Economics, Volume 22, Issue 4 (Jun., 1974). At that time when the crisp potato market was dominated by one single firm (Smiths) there were no special barriers to entry. The main targeted group of people was people at pubs, particularly men. Smiths’ position in the late 1950’s was thought by them to be quite secure. They dominated the market. Sales were increasing at about 10% per annum and they were making considerable profits. In the 1959 season they recorded a net taxed profit over £1million when the total market were only about £12 millions. (National Statistics) Bainsian entry barriers existed and certainly seemed to be effective. Smith’s brand was the leader market –their name was virtually synonymous with crisps. They had 24 factories in operation in 1960 as well as a large distribution network. They ran their own potato farms that through these supplied only 10 to 15% of their needs were a valuable source of information about the quality and expected yields of the current potato crop. They also had overseas subsidiaries on which they could call for advice on market conditions in several countries (frequently the overseas firms would be making good profits when the UK market was sluggish).
|
|
|
|
Still Can't Find What Your Looking For? Then Try a Essay Search!
|
