Industry Analysis: Investment Security

Running Head: INVESTMENT SECURITY 1
INVESTMENT SECURITY

Running Head: INVESTMENT SECURITY
Contents
Industry Analysis........................................................................................................ 3
Porter Five Force Analysis....................................................................................... 3
Threat of Substitute............................................................................................. 3
Threat of New Entrant.......................................................................................... 3
Competition among existing players.......................................................................3
Power of Suppliers................................................................................................ 3
Power of Customers................................................................................................ 3
External Factors - PESTLE Analysis.............................................................................3
Political Force.......................................................................................................... 3
Economic Force.................................................................................................... 4
Social Force.......................................................................................................... 4
Technological Force............................................................................................. 4
Legal Forces......................................................................................................... 4
Environmental Forces........................................................................................... 4
Key Economic drivers................................................................................................. 5
Price........................................................................................................................ 5
Sales........................................................................................................................ 5
Financial Analysis....................................................................................................... 5
References..................................................................................................................... 9

Running Head: INVESTMENT SECURITY
Industry Analysis
Porter Five Force Analysis
Threat of Substitute
In the industry in which A2 Milk operates its activities is comprised of a very limited number of
substitutes. The available substitute is also making low-profit earnings industries. This reflects
that there is no limit in maximum profit that can be earned by the companies in the industry. This
results in a low threat of substitute for the company.
Threat of New Entrant
The threat of new entrant in the Australian milk industry is very weak because it is very tough
for the businesses operating in the industry to attain economies of scale (Fern Fort University,
2019). This results in supporting in attaining competitive advantage to those businesses which
are producing products in large quantity. On the other side, it makes production costlier for the
new entrants.
Competition among existing players
The available number of competitors to A2 Milk is very limited which results in weaker
competitive force. There is also a very limited number of players of large size.
Power of Suppliers
The number of suppliers in the industry of A2 Milk is large in comparison to buyers. This
reflects that the suppliers have low control over the prices of the products and this result in
making the suppliers bargaining power low.
Power of Customers
The bargaining power of the customers in the industry is low due to the availability of a limited
number of firms producing products.
External Factors - PESTLE Analysis
Political Force
The political situation of Australia is stable, which reflects that the government of the country is
very effective in framing the policies and regulations for the businesses operating in the country