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Darden Case Study Help

The competitive environment of Darden would be studied through Porter's five forces analysis which would highlight the degree of rivalry in the market.
Darden Case Study Solution

Degree of Rivalry:

Currently we can see that the adhesive market has a high development capacity due to the presence of fragmented sections with Darden enjoying leadership and a combined market share of 75% with two other industry players, Eastman and Permabond. While industry competition in between these gamers could be called 'extreme' as the customer is not brand conscious and each of these gamers has prominence in terms of market share, the reality still remains that the industry is not saturated and still has several market sections which can be targeted as potential specific niche markets even when introducing an adhesive. Nevertheless, we can even mention the fact that sales cannibalization may be causing market competition in the adhesive dispenser market while the marketplace for instantaneous adhesives uses development capacity.

Bargaining Power of Buyer: The Bargaining power of the buyer in this market is low especially as the buyer has low understanding about the product. While business like Darden have managed to train distributors regarding adhesives, the last consumer is dependent on suppliers. Roughly 72% of sales are made straight by makers and suppliers for instantaneous adhesives so the purchaser has a low bargaining power.

Bargaining Power of Supplier: Given the fact that the adhesive market is dominated by three players, it could be said that the supplier takes pleasure in a greater bargaining power compared to the buyer. The fact stays that the provider does not have much influence over the purchaser at this point specifically as the buyer does not show brand name recognition or rate level of sensitivity. This suggests that the supplier has the higher power when it concerns the adhesive market while the producer and the buyer do not have a significant control over the actual sales.

Threat of new entrants: The competitive environment with its low brand loyalty and the ease of entry shown by foreign Japanese competitors in the instant adhesive market suggests that the market allows ease of entry. Nevertheless, if we look at Darden in particular, the business has dual abilities in regards to being a producer of immediate adhesives and adhesive dispensers. Potential risks in equipment giving market are low which shows the possibility of creating brand awareness in not only instantaneous adhesives but also in giving adhesives as none of the industry players has actually managed to place itself in double abilities.

Risk of Substitutes: The hazard of substitutes in the instantaneous adhesive industry is low while the dispenser market in particular has replacements like Glumetic suggestion applicators, inbuilt applicators, pencil applicators and advanced consoles. The reality stays that if Darden presented Bond-A-Matic, it would be delighting in sales cannibalization for its own items. (see appendix 1 for framework).

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