GNLD and its product Nutritional Supplements Assignment

GNLD and its product Nutritional Supplements - Assignment Example It is through the fast changing health industry that new ways and methods of diagnosis and promotion of better health has been implemented. All these proceedings have brought about patient care, worker efficiency, and hence better health. To achieve these objectives, several companies like GNLD, which manufacture and sell nutritional food supplements, have been introduced. This product has however been impacted by market forces as discussed in this paper. Degree of Rivalry With the increased need for better health, and the extensive research being carried out in the health industry, rival firms have increased competition drawing the profits that GNLD used to make initially. This has made the competition imperfect; hence, each other firm is struggling to achieve competitive advantage and a higher market share than its rival company. In addition, the controversy on the quality of products of the increasing nutritional food supplements companies and slowed down the market growth. This h as consequently led to need for storage of the products hence high cost. Further, some of the products are perishable thus; the company decides to sell the products at relatively lower prices. The exit barrier in any health related firms are high. This is because the costs of plants and machinery cannot be forgone thus the firm decides to keep competing no matter the state in the market. Though successful, GNLD has been forced to keep competing due to this factor (http://www.mlm-home-business-training.com/GNLD-Int-mlm-leaders-call-team-money-training-scheme-scam/secretsuccess.htm). Threats of Substitutes In a free market economy, restriction of entry into, and exit out of the market is not prohibited. This means that competitors with related commodities will venture in to the market. This threat will definitely occur since the demand of the products of GNLD has been affected by the prices changes in substitute product. For instance, a survey carried out in Kenya showed that GNLD pro ducts are highly affected by the prices from TIASHI, a competing food supplement company. From the research, it was found out that to become part of the marketing team in GNLD, a sum close to $36 is required then the individual should purchase products of high value. For TIASHI, a sum of $18 is required and the initial purchase is relatively lower. This determines the prices at which each the products are sold. Evidently, the close substitute products have constrained the ability of GNLD to raise prices (http://www.healthybusiness.co.za/GNLD%20Products%20Guide/introduction/i3.html). Buyers bargaining power This is the power potential buyers have on any industry that is producing commodities. In many market structures, the forces of demand and supply determine prices of commodities. It is obvious that buyers will expect such market structures. Since GNLD does not exist as a monopoly, the prices at which the food supplements are sold should be dependant of the market mechanisms. On th e contrary, the food supplements from GNLD have fixed prices. The only advantage extended to the buyer is the ability to buy smaller quantities. This means that the buyer does not have bargaining power. It is thus possible in such a case to shift to other substitutes which give the