- Consider the other 4 forces. Evaluate the strength of each force(high, medium, or low)

Bargaining power of suppliers; is quite high because theChampagne appellation is tied to specific region and certain types of grapes, therefore any disruption in the supply for whatever reason will have a high impact.

Bargaining power of buyers: low because they really don’t have much room for bargaining. The decision at time of purchase might come to product availability only.

Threat of substitute products: low to mid threat, there are alternatives such as prosecco, cava, crémant that again can be an alternative but could mainly come to availability

Threat of new entrants: Low, to enter the champagne market with a new brand is not impossible but unlikely, there is a region control as well as heritage to the industry. A luxury conglomerate can buy a producer/brand, but it will already exist there, they can however grow the brand awareness.

- Evaluate the overall competitiveness of the market context in which your brand operates.

It is very competitive, there are several established brands already in the market.

- Choose one of the brands/ conglomerates mentioned in the “Luxury Powers 2020” report (pages 20-23)

 

- Analyze its competitive rivalry with regards to:

§  Market commonality (A firm is more likely to attack the rival with whom it has low market commonality than the one with whom it competes in multiple markets. Given the strong competition under market commonality, it is likely that the attacked firm will respond to its competitor’s action in an effort to protect its position in one or more markets)

§  Awareness (Awareness is the extent to which competitors recognize the degree of their mutual interdependence that results from: Market commonality & Resource similarity)

 

§  First mover incentives (A firm that takes an initial competitive action in order to build or defend its competitive advantages or to improve its market position)