fits. However, if rivalry is strong significant price competition including price wars can occur. Price competition limits profitability by reducing the margins that can be earned on sales, which could push the industry profits down in the process.Ben & Jerrys competitive structure seems to be consolidated. The more commodities like an industrys product the more vicious will be the price war. The nature and intensity of rivalry in their industry is much more difficult to predict. As the companies are interdependent competitive actions of one company will directly effect the profitability of others. Companies sometimes seek to reduce this (price war) by following the price lead set by the dominant company in the industry. The demand conditions also affect the intensity of internal rivalry between companies. Growing demand tends to reduce rivalry as companies can sell more without taking market share away from other companies, resulting in high profits. Conversely declining demand results in more rivalry as companies fight to maintain revenues and market share. Therefore Ben & Jerry exist in a mature industry where there is declining demand; creating intense rivalry with Haagen Dazs.Buyers Ben & Jerrys customers have no switching costs. Therefore Ben & Jerry have to be aware of upcoming price wars, to avoid losing customers to their rival.Hence Ben & Jerrys customers have high bargaining power. For example, during economic instability consumers are reluctant to spend their money on luxury products such as super premium ice creams.How much power can a supplier have?Ben & Jerrys Supplier of milk and cream comes from Vermont Dairy farms which charge a higher price but do not use any genetically engineered drugs (rBGH). Their supplier of milk has increased bargaining power as a direct result of Ben & Jerrys principals, which in this case is,h Health issues.h To protect smaller farms.Most of their suppliers are scattered around the world such ...
