Competitive forces framework for new entrant: the case of Canadian pea starch in Chinese market

Abstract

Based on the Five competitive Forces Model of Porter (2008), and the practical case analysis on Canadian pea starch in the Chinese market, this study builds up a theoretical framework for a new entrant (also as a substitute) to analyze industry competition and provides strategic suggestions for the new entrant to shape a competitive position. In this study, Porter's (2008) model is first preliminarily modified to be used for new entrants’ analysis. Then two-phase interviews are conducted with Chinese food processors to understand Chinese buyers’ attitudes towards Canadian pea starch and to identify their concerns. Subsequently, in-depth interviews are carried out with Canadian pea starch suppliers to match customer demand and supplier capability, followed by a five-forces analysis to assess industry competition facing by Canadian pea starch in the Chinese market. Afterwards, the previously modified competitive forces framework is enriched by illustrating positive/negative effectiveness of all five forces and by adding evaluation metrics for each force.

This study has academic value. It customizes and enriches a Five Competitive Force Model to be applicable of analyzing market potential of a new entrant. It provides a theoretical base to create strategies for a new entrant (also as a substitute) to shape its competitive position. Also, it addresses the gap in competitive analysis of agricultural exports by matching customer demand and supplier capability. This applied research adds to the industry understanding of the market need and contributes to Pulse Canada’s “25 by 25” strategy and Canada's Protein Industries Supercluster.