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Allstar’s rivalry between it and its competitors in the OTC cold, cough and allergy market is high. While Allstar is the largest revenue earning firm, brand awareness is a ceaseless effort if Allstar wishes to remain at top of mind for consumers as they make their purchase decision. Bargaining Power of Customers: A consumer holds all the power here, each and every time they choose to solve their problem by buying one of these OTC cold, cough and allergy remedies. Their choice is empowered by the various criteria upon which the customer can evaluate their options based 8Cates, Nilda: MBAFPX2012
on things such as accessibility, price, efficacy and brand or product awareness. It should be emphasized that ultimately, customers can put pressure on an entire industry’s margins by demand concessions on price or greater focus on quality (Team, 2014). Threat of New Entrants: To remain competitive, companies in the OTC cold, cough and allergy space must constantly develop something new, even if the newness isn’t in the product itself but rather be seen as an innovative value proposition to the consumer. Because the brands in this segment all use the same ingredients to develop similar formulas and must comply with the same regulatory requirements, innovation isn’t in the product itself but rather in something consumers see as NEW. Therefore, it’s verylikely that competitors in a different segment of the consumer good or personal care industry could enterthe OTC cold, cough and allergy space and compete for those customers with products that deliver the same results and at similar or lower price points. Team (2014) explained that the threat of entry describes the risk that potential competitors will indeed directly compete for share and that is a persistentand very real risk here. Bargaining Power of Suppliers: As stated, this is a market that has very common resources. In terms of bargaining power, suppliers for the key active ingredients in the OTC cold cough and allergy market face stiff competition both domestically and overseas. While these suppliers could theoretically band together to collectively increase their own margins across their different clients such as Allstar and its competitors, that is unlikely as negotiation isn’t a guarantee if brands simply seek new suppliers from a very abundant resource market. The goal of suppliers should be to remain a key and steady collaborator for resources and dependable when new products launch to increase the list of supplied key ingredients which are all regulated. Suppliers should aim for strong relationships with multiple clients (Team, 2014)instead of exploiting key relationships for significant profit. Threat of Substitute Products: The OTC cold, cough and allergy market has legal and regulatory limits that reduce the ability to create real substitutes as the key active ingredients legally define and limit what a product can be stated to be indicated to treat. It is extremely unlikely that equally effective