Sweet Potatoes are available in Australia throughout the year and the total production is around 100,000 tonnes and the estimated gross value is $ 80 million (Jones and Morgan 2014). Queensland acts as the largest producer and it produces more than 70 % of the sweet potatoes. The sweet potato industry helps in providing work to around 5000 people within a normal year. This report analyses the external environment of sweet potato industry with the help of Porter’s five forces.
Porters Five Forces of sweet potato industry
The Porters Five Forces acts as a tool that can help in analysing competition in relation to a business. The firms should be able to apply the core competencies that can help them in achieving profit above that of the industry coverage. These forces can prove to be instrumental in affecting the ability of a company of serving the customers that can help them in making a profit.
Threat of new entrants: The profitable industries that can produce high return can help in attracting the new firms. The new entrants can decrease the profit that other firms make within industry. Australia is equipped with a national statutory framework that helps in ensuring that trading is carried out in a fair manner with the business and the consumers (Viglia, García and Pera 2017). The Australian Government legislation protects the consumers. Sweet Potato can be cultivated throughout the year and the government hence encourages the cultivation of sweet potatoes that can help in earning more revenue for the government. The threat of new entrants can be said to be high on account of the lenient policies of the government.
Threat of substitutes: Substitute product makes use of different technology that can help in solving same economic need. The sweet potatoes act as a source of vitamin A and vitamin C. The Australian population is dependent greatly on sweet potatoes in their everyday life. The sweet potatoes have a creamy texture and their all-round goodness makes them a great favourite among the consumers of Australia (Mahoney 2015). There are different kinds of varieties of sweet potato like gold, purple, white and red and the customers can have them on the basis of their choices. The threat of substitute for the sweet potato industry is low as it cannot be easily replaced by any other kind of food item (Kays 2018).
Bargaining power of customers: Bargaining power of customers is indicative of the ability of customers of putting pressure on a firm that affects the customer sensitivity to the changes in price. The sweet potatoes can be made into brownies, chips, patties and muffins that can help in satisfying the distinct taste of the consumer (Atkins and Bowler 2016). There are a large number of consumers in Australia who have products of sweet potato within their everyday life and hence bargaining power of customers can be held to be low.
Bargaining power of suppliers: Bargaining power of the suppliers is indicative of market of the inputs. There are different kinds of suppliers of sweet potatoes in Australia like Sweet Potatoes Australia and Australian Sweet Potatoes Grower that makes the bargaining power of the suppliers very high for the producers of sweet potato. These suppliers are instrumental in producing around 900,000 cartons pertaining to the sweet potatoes that increases the competition among the suppliers (Wood, Carragher and Davis 2017). Sweet Potatoes are abundant in Australia and this makes the competition among the suppliers extremely high. Sweet Potatoes are imported from Queensland and they grow well on the sandy loams of Australia. This helps in ensuring that there is the presence of many suppliers of sweet potatoes within Australia.
Industry Rivalry: The intensity of the competitive rivalry helps in acting as a major determinant pertaining to competitiveness in industry. The understanding of the industry rivals can pave the path for product marketing that is successful. The production of sweet potato is an economic activity which if managed in the proper manner can help in reducing poverty and it can help in improving the community livelihood (Abong et al. 2016). Australia is a producer of many kinds of vegetables like Bell pepper, onion, cabbage and carrot that significantly increases the industry rivalry. The customers can easily look for the alternatives that makes the industry rivalry quite high for the sweet potatoes industry within Australia.
National Statutory Framework in Australia takes care of the fact that fair trading is carried out pertaining to both business and the customer. The government legislation of Australia helps in offering protection to the consumers. The people of Australia depends to a great extent on potatoes in their everyday existence. The creamy texture of sweet potatoes makes them a favourite among customers of Australia. One can get various kind of sweet potato in the market and the customers can choose that variety that caters to their tastes. Sweet potatoes can be used for making different products like brownies, muffins and chips. A large number of people in Australia take recourse to sweet potato for their everyday sustenance which makes the bargaining power low. There are many suppliers of the sweet potatoes within Australia which makes the suppliers bargaining power very high. The suppliers produce almost 900,000 carton of sweet potato which contributes to the increasing competition of the suppliers. Australia is a leading producer of a large number of vegetables that increases the rivalry pertaining to sweet potato in the market.
- The sweet potato researchers should work closely with the growers that can lead to the creation of effective Integrated Pest Management strategy.
- Future research into the aspect of management of the post-harvest crop residue can help in improving the production of sweet potatoes (Wood, Carragher and Davis 2017)
- The sweet potatoes can be rotated with that of other crops that can help in preventing build up of the diseases
- The storage roots of sweet potatoes should be selected from high yielding plant that can help in enhancing the taste of the sweet potato (Viglia, García and Pera 2017)
- The sweet potatoes being planted on ridged ground can help in facilitating machine harvesting that can produce better quality sweet potato
Abong, G.O., Ndanyi, V.C.M., Kaaya, A., Shibairo, S., Okoth, M.W. and Lamuka, P.O., 2016. A review of production, post-harvest handling and marketing of sweetpotatoes in Kenya and Uganda. Current Research in Nutrition and Food Science, 4(3), p.162.
Atkins, P. and Bowler, I., 2016. Food in society: economy, culture, geography. Routledge.
Dwyer, L., Pham, T., Forsyth, P. and Spurr, R., 2014. Destination marketing of Australia: Return on investment. Journal of Travel Research, 53(3), pp.281-295.
Jones, G.G. and Morgan, N.J. eds., 2014. Adding value (RLE marketing): brands and marketing in food and drink. Routledge.
Kays, S.J., 2018. The physiology of yield in the sweet potato. In Sweet Potato Products (pp. 87-140). CRC Press.
Mahoney, C., 2015. Health, food and social inequality: Critical perspectives on the supply and marketing of food. Routledge.
Viglia, G., García, M.N. and Pera, R., 2017. Book review: Marketing in Food, Hospitality, Tourism and Events. Tourism Management, 63, pp.351-352.
Wood, K., Carragher, J. and Davis, R., 2017. Australian consumers' insights into potatoes-Nutritional knowledge, perceptions and beliefs. Appetite, 114, pp.169-174.