or consumers to drink them as a must in order to survive.
INDUSTRY ANALYSIS BY USING PORTAL FIVE FORCES
a) Threat of new entrance
Yakult probiotic beverage falls into a broad and safe market, especially the awareness and concern of people on health are increasing. Probiotic drinks are favourable and popular for consumers and bring a considerable return to the company. This has made the cultured milk market seems attractive to the market, where it attracts many outsiders that tries to enter this industry. However, the capital cost to enter this industry is relative high compared to other beverage industry. As probiotic beverage requires friendly bacteria such as lactobacillus acidophilus that are hard to produce and refine it to produce a drinkable beverage.
Potential entrants who wish to enter this industry need to invest heavily on Research and Development as well as pharmaceutical department in order to produce a probiotic beverage. As Yakult has been proven by many professors such as Dr Ko Okumura (Juntendo University, Japan), Dr. Haruji Sawada and others, the credibility of Yakult beverage is high, which result to a high entry barrier for new entrants as well.
Furthermore, potential entrants need to make sure they are able to differentiate their product from Yakult in term of higher nutrition or lower price or both. If firms are not able to come out with a better beverage than the existing beverage in market, then there is no point they enter the market as this will deficit the company.
In a nutshell, the entry barrier for new entrants to enter this industry is high. Yakult is facing low threat of new entrants.
b) Threat of substitute
Porter’s threat of substitute definition is the availability of a product that the consumer can purchase instead of the industry’s product with similar benefits. Eventhough Yakult is the pioneer of probictic, substitutes products are still able to replace them. Customers can easily replace Yakult by purchase bottle of probiotic capsule, probiotic powder or probiotic drink. Example of probiotic supplements is Kordel’s Protect probiotic powder, which cost around RM70 for 30 sachs. Yogurt drink and yogurt powder are also substitutesthat can replace Yakult products.
The more substitute the products are, the more competitive the industry is. In the long run, Yakult may suffer less profit. In this case, there are few substitute products in market that can replace Yakult products, so they are facing high threat of substitute products.
c) Bargaining power of supplier
Bargaining power of supplier occurs when buyers are too many but only few suppliers in the market. When it is too costly to change suppliers, the bargaining power of suppliers is relative high. The Yakult Plant in Calamba city, Laguna, is able to produce 1.6 million bottles of Yakult a day. In order for them to produce a bottle of 100ml Yakult Probiotic beverage, they will need few raw materials such as skimmed milk powder, sugar, and dextrose is blend with sterilized water to create a sweet, milky solution. While all these raw materials are not unique or highly differentiated product. Which means Yakult can get them from few suppliers, as there are not only one supplier in the market that supplies sugar, skimmed milk powder and dextrose. The suppliers industry is not dominated by small number
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