Question

Since its establishment in 1972, Sanita has become a household name synonymous with quality consumer products, outstanding support of the community, and commitment to the environment. A member of INDEVCO Group, Sanita is a manufacturer and distributor of a wide range of household, institutional, and personal care products. In 1987, exports expanded in the region, supplying markets in Europe, Middle East, Africa, and Asia. Sanita manufactures and markets a wide range of quality hygienic tissue, disposable and plastic products, Aluminum Foil and Cling film, Trash bags, Freezer bags, Liquid soap, wet wipes, cotton lines and Dispensers in compliance with Lebanese and international statutory and regulatory standards. Apply Porter’s five forces model to Sanita. Would you invest in a similar industry? Why?

Answer 1

Porter's five forces model analyzes the competition of a particular enterprise. It contains five significant models: industry rivalry, threat of entrants, threat of substitutes, bargaining power of suppliers, and buyers' bargaining power. Sanita has established its operations in countries all over the world. It sells the products to the retailers and the customers as the product line extends to the household products like aluminum foil, trash bags, and wet wipes. All these products are of daily use to the households and customers. It acts as a substitute for the online grocery stores because it has a wide range of operations. The first factor is industry rivalry. There are many retailers like Reliance Fresh, which have already established procedures in any country. The competition is high because of more firms in the industry. But on the bright side, there are many customers also. The second factor is the threat of entrants. The sector is flexible, and any firm or company can enter the industry by just completing the formalities. There are also many substitutes, like online grocery shops. In the pandemic times, most people tend to order their groceries online. Hence, the alternatives are healthy. There are many buyers and sellers in the market, and thus, the seller and buyer bargains power is high. The seller tends to sell at a fixed price, but the buyers manage to bargain. The grocery shops often reduce the costs for the customers. Hence, the competition is high in the industry. The individuals tend to invest in Sanita because of extended and efficient operations. The firm is growing and developing. The managers know the goals, and they target all the actions towards the end goal.