Essay on Porter’s 5 forces analysis

For strategic analysis of an organization, it is highly important to perform a detailed and thorough analysis of external environment. Two main constituents of external analysis are Porter’s 5 forces industry analysis and PEST analysis focused on macro environment. Both of these instruments are powerful, and provide valuable insights on the company’s position and potential for development. In order to perform external analysis, appropriate sources of data are needed. The purpose of this paper is to research data sources which can be used to evaluate each factor in Porter’s model and in PEST analysis for a particular company. Target company in this paper is Mondelez International (former Kraft Foods company), and target industry is therefore foods industry.

1. Sources for Porter’s 5 forces analysis

1.1. Threat of new entrants

Food Institute. (2012). Food Industry Review. URL:

The resource contains detailed analysis of food industry, and the notable part of this source is the information and consideration of industry mergers and acquisitions as well as the appearance of new industry players. The information on the industry dynamics allows to draw conclusions about entry barriers and new entrants. The limitation of the resource is the scattered character of data related to entering the industry.

U.S. Business Reporter. (2012). Food Industry Market Share Categories. URL:

Using this source, it is possible to estimate the level of concentration in the industry, and therefore, it is possible to determine the type of competition within the industry, and estimate threat of new entrants. The main limitation is focus on the U.S. market mostly.

1.2. Bargaining power of suppliers

Bureau of Labor Statistics. (2012). Producer Price Index ”“ Food manufacturing. URL:

This resource contains information both on Producer Price Index for the whole industry and for specific subdivisions of the industry. The data can be used to estimate bargaining power of suppliers and its dynamics.

FAOstat. (2012). Food Production Statistics. URL:

The resource provides world statistics on quantity of food supply produced, areas harvested, producer prices and yield per hectare. The data can be classified according to countries, commodities and country ranks. Using this set of data, it is possible to evaluate the power of suppliers. Although the resource does not contain the exact number of suppliers, it is not a significant limitation, because in food manufacturing industry the number of suppliers can be huge; general industry trends provided in this resource are more important.

1.3. Bargaining power of customers

U.S. Department of Agriculture. (2012). USDA ERS ”“ International Food Consumption Patterns. URL:

The resource provides data on price elasticity and income analysis for different groups of consumers in food industry. The data allows to make estimates of the bargaining power of customers in the industry. Although only aggregated data are available, the resource gives valuable insight into customer aspect of the 5 forces model.

FAOstat. (2012). Food Trade Statistics. URL:

The resource contains statistical data on the consumption of food and agricultural products (quantity, unit value and total value), sorted by countries, commodities and share of total merchandise. These data provide a deep insight into the patterns of food consumption all over the world.

1.4. Availability of substitutes

Agri-Food Trade Service. (2011). Global Packaged Confectionery Trends. Retrieved from

The source shows the trends of consumption and rivalry between key products in confectionery sector of food manufacturing, and can be used to assess the availability of substitutes for the products of Mondelez International, Inc. The main limitation of this study is the focus on one particular sector of the food manufacturing industry. Since this sector is the focus of operations of Mondelez International, Inc, the limitation does not affect the usefulness of this source.

EuroMonitor International. (2012). Packaged Food Industry Market Reports, Industry Statistics, Market Analysis. URL:

The resource contains a rich dataset on the packaged food industry in general, and on confectionery sector in particular. Data is arranged by years, countries, types and categories of products. This data set allows to evaluate different aspects of substitute products in different settings. One disadvantage of the dataset is the need to choose different reports for different levels of data aggregation.

1.5. Degree of rivalry among competitors

Yahoo Finance. (2012). MDLZ Industry: Confectioners. URL:

The resource contains data on major competitors and their financial results, shows leaders and laggards in the industry and the dynamics of shares for the industry. Numerous details are available on related links. One minor disadvantage is lack of data on private companies which are competitors.

U.S. Census Bureau. (2012). Statistics of U.S. Businesses. URL:

This resource allows to estimate the number of competitors and number of establishments, payroll and employment in particular NAICS sector (311: food processing). It provides a good insight into competition, but is only focused on the U.S. data.

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