The market of Sustainable food
The Market of Sustainable Food
EcoShelves and its competitors
In this section, we analyze the competition EcoShelves will face after its launch. First of all, we use two filters in order to be able to correctly identify our competitors. The first filter is geographical and the second one is related with the product characteristics. But to find our competitors is not enough. Therefor, we are going to analyze their strengths and weaknesses later on.
Potential competitors
To begin, we can divide the potential competitors into two groups based on geographical factors. In fact, our market research shows that a majority of people would not want to travel more than 15 minutes in order to buy organic food. With this factor in mind, we can make a distinction between on the one hand competition in the local area, that is the shops in Watermael-Boitsfort, and on the other hand surrounding competition, that is shops in surrounding municipalities.
Secondly, we need to select the potential competitors based on the products they sell. Of course it would make no sense to compare an organic food store with a bike store for example.
Stores and retailers in Watermael-Boitsfort: It is possible to find a list of Watermael-Boitsfort’s retailers on the municipality’s website. Here are the ones we thought were relevant to be analyzed in this competition analysis.
As we can see in the list, there are different kinds of food retailers, namely “general food retailers”, “organic food retailers” and “others”.
In the first category, we can distinguish between small grocery stores and supermarkets. There are four supermarkets out of the 17 shops and these are GB Express, Delhaize Shop&Go, Carrefour Market and Proxy Delhaize. The others are all small grocery stores.
In the “Organic food retailers” category there are a few retailers. These are Origin’O, Bioceno and Le Panier Bio. Origin’O is a brick and mortar stores while Bioceno and Le Panier Bio are delivery services for small quantities of vegetables and other organic food once every week on Friday.
At last, there is a local market taking place every Sunday from 8AM to 2PM in Watermael-Boitsfort.
Strengths and weaknesses of the potential competitors
In this part we will analyze the potential competitors. For each category the products’ characteristics and the company’s characteristics will be briefly described. After that we will try to find what are the strengths and weaknesses of these companies.
Direct and indirect competition
We have now seen the different kinds of potential competitors we could have in Watermael-Boitsfort and in the neighboring municipalities. In this section, we will classify the shops into two categories. These are direct and indirect competitors.
A direct competitor is a company that sells a product very similar to ours and in the same market. An indirect competitor is a company selling a product that is not necessarily similar to ours but could replace it. For example, we could say that carrots are indirect competitors to lettuce because both are vegetable even if they are in no other way similar.
However, the concept of direct and indirect competition is relative. Since we are centered on the concept of organic food, we decided to call indirect competition the retailers that do sell vegetables but not organic ones. In opposition with that, the retailers that do sell organic food are classified as direct competition.
Indirect competition: We can place here all the small grocery stores and the supermarkets as well as.
Direct competition: In the direct competition we have the organic food retailers as well as the supermarkets.
The latter are also part of the direct competition since they sell both organic and not organic food at the same time.
Now that we have drawn this distinction, we will analyze in detail the case of direct competition. We deliberately choose not to investigate further on the indirect competition mainly because there is little information available about the small grocery stores but also because of our market segmentation.
Here are some examples of the three types of direct competitors we have:
Our biggest competitors according to our consumers
Not only is it important to look at the competitors on the basis of the two factors discribed above, it is also important to take into account the preferences of our potential consumers regarding to where they would rather buy their food. Our survey reveals that people buy their organic fruits and vegetables mostly in big supermarket, in local markets or in specialized shops, but not in urban farms.
Competition matrices
After finding our competitors, we must compare Ecoshelves’ positioning’s strategy with theirs in order to assess what are their competitive advantages in comparison with us and vice versa.
We divided the analysis in two parts. The first one takes the point of view of consumers and the second one is more about companies’ point of view. The distinction is important to make because of the differences between one another. In both parts we use a matrix, which is a two dimensional graphical representation.
From the consumer's point of view
In this part we classify the competitors using the “local” variable and the “organic” variable. Local is simply the fact that the product has been cultivated nearby the location where it is sold. The organic dimension means that no pesticides and no chemical fertilizers were used. Using these two variables and the competitors found previously, we can place them on the matrix.
As one can see, Ecoshelves is going to have a strong competition on organic ground, coming from Origin’o, Bioceno and Les paniers bio. For the local variable, none of the competitors reaches the level of proximity of Ecoshelves to consumers. However, Bioceno and Les paniers bio are really close to the proximity level of Ecoshelves and it might lead to ferocious competition.
From EcoShelves' point of view
Once again two dimensions are used. The first one is the vertical integration. The vertical integration eliminates intermediaries and so suppressing the transaction costs. It also allows the products to be controlled and traced more easily, avoiding the risks of a dishonest supplier.
The second dimension is the technological aspect. Technology makes it possible to have higher production rates. Organic products are usually cultivated traditionally, that is without the use of technologies, which is not the case for Ecoshelves making it a particular player in the sector.
In this case, Ecoshelves is all alone in the combination of technological producing and vertical integration.
The technological part can become a real advantage in a near future. With the constant evolution of technologies, we might think that in a few years’ time the production rates of technological agriculture will outperform by far the productivity of the other ways of producing and therefor leading to a strong competitive advantage.
Conclusions
To conclude, we can say that because there already are both direct and indirect competitors in the market we are targeting competition will be high. The greatest competition we will most likely face comes from the supermarkets and specialied shops such as Origin’o because they position themselves as organic food providers and because our potential consumers usualy buy their organic fruits and vegetables in this shops. But indirect competition must not be underestimated either because there are a lot of similarities between the products.