Introduction
The move to export Bulgarian goat cheese to the Moroccan market means that positive results could be recorded within a short period. The completed Porter’s Diamond Analysis has presented unique aspects of the sector, existing opportunities, and the best approaches to maximize profits. However, the investors planning to enter this new market should monitor the major issues or trends recorded in the wider Moroccan cheese industry. The recorded forces in the selected sector reveal that additional measures are needed if the Bulgarian company is to achieve its aims, such as competitive prices, providing quality, and promoting sustainable practices.
Industry Analysis
Porter’s five forces model presents the best framework for studying and analyzing the issues associated with the wider Moroccan dairy industry. The emerging observations will be reflective of the issues affecting the newcomers in the sector and how they can re-pattern their business strategies. The selected Bulgarian company needs to consider the major attributes associated with Morocco’s cheese industry (Aleksiev, 2019). A detailed analysis of a given industry could present additional insights for making informed decisions, identifying the most appropriate aspects to consider, and launching the proposed business successfully.
Competitive Rivalry
The current industry scenario reveals that many medium-sized, small, and foreign companies are involved in the production and marketing of cheese and other dairy products in the Moroccan market. Some of the leading local firms include Eric Meignat, Fromagerie Bel Maroc Sa, and Fromagerie De Tanger (Selina Wamucii, n.d.). On top of these companies, Moroccans have access to different varieties of cheese from foreign countries. Some of the leading suppliers of this dairy product in the country include the Netherlands at around 38 percent and France at 15 percent (“Morocco cheese”, 2021). The increasing demand for cheese in the country was attracting smaller companies and manufacturers to record meaningful results.
Based on these observations, it is quite clear that the level of rivalry in the Moroccan cheese industry is moderate to high. This means that a new importer or producer of cheese targeting this country should be prepared for possible competition from the increasing number of companies operating in the sector (African Development Bank Group, 2021). Continuous monitoring would be relevant to identify some of the possible challenges and introduce superior approaches if positive results are to be realized.
Supplier Power
In Morocco, most of the companies producing and processing cheese for the local and international markets rely on the products different suppliers have to offer. In a report by Fitch Solutions, it occurred that the country’s domestic production level for cheese was expected to grow by around 31,700 tons by the year 2025 (“Morocco cheese”, 2021). However, the issue of seasonality in the delivery of dairy products worsened the nature and performance of most of the involved companies. Nonetheless, companies in the industry need to collaborate with stable or sustainable suppliers of various dairy products, such as milk, if they are to continue pursuing tinier overall business aims.
The country’s climatic conditions and the ongoing wave of climate change were affecting the overall productivity of most of the suppliers of cow and goat milk. Consequently, the recorded observations show conclusively that the bargaining power of suppliers was relatively high for the Moroccan cheese industry (Selina Wamucii, n.d.). Companies that wanted to succeed in the sector needed to identify and partner with most of the available suppliers make proper agreements, and offer competitive prices for the acquired dairy products. However, the consideration of Bulgarian cheese in this new market would mean acquiring milk from the country of origin, thereby reducing the overall strength of this force.
Buyer Power
Just like in any other sector, buyers play a critical role by determining the performance and goals of most of the companies operating in a given country. In Morocco, more consumers of cheese and a wide range of dairy products are usually keen to ensure that most of the available products are healthy. These individuals understand that firms should rely on acceptable production strategies to reduce contamination while at the same time preventing possible health challenges that could emerge from the consumption of cheese. Additionally, the majority of the possible buyers of cheese in Morocco remain sensitive to a wide range of aspects, such as prices, quality, origin, and handling (“Morocco cheese”, 2021). Companies operating in the sector should be keen on such attributes if they are to improve their operations and eventually deliver positive results.
These analyses would indicate that the bargaining power of consumers for cheese and related products is moderate. Individuals are usually keen to monitor the business practices of most of companies to determine whether they promote aspects of sustainability or not (Selina Wamucii, n.d.). The Bulgarian organization intending to start its business operations in this new foreign market should consider these emerging consumer aspects if it is to deliver positive results. The ultimate aim will be to attract more potential customers and eventually record positive gains.
Threat of Substitutes
In Morocco, customers appreciate the fact that a wide range of dairy products exist in the market that could become the best alternatives for cheese. For example, consumers could choose to buy yogurt or milk to meet their nutritional demands. Additionally, people can choose between cow and goat cheese depending on their personal expectations. Companies producing and marketing these products should be ready to make informed decisions based on the nature of the products available in the market (Trading Economics, 2022). This revelation shows conclusively that the threat of substitute products in the Moroccan cheese industry is relatively moderate.
Threat of New Entry
Cheese processing and production are becoming common practices in different parts of the world since emerging firms can acquire the needed technologies and equipment. Business firms will need to expand their operations depending on the recorded profits and the anticipated organizational goals (Trading Economics, 2022). With the industry requiring companies to have reduced capital for starting their operations, chances are high that new businesses can launch their operations within a short period. This observation means that the threat of new entry remains high for the Moroccan cheese industry.
The targeted Bulgarian cheese company has the potential to identify the best location to launch its operations in Morocco. It would need to consider the emerging trends, including the presence of new players in the sector. The idea of diversification to focus primarily on goat cheese could make a significant difference and guide the company to start pursuing its business aims (Selina Wamucii, n.d.). Proper pricing strategies, provision of quality, and engagement in corporate social responsibility (CSR) are powerful strategies that could help the company lessen the dangers of new entry.
Conclusion
The above analysis has presented unique insights about the Moroccan cheese industry. Experts indicate that the sector will expand significantly within the next few years. Investors focusing on the sector should be aware of the increasing threat of new entry, supplier power, and competitive rivalry. The moderate forces of buyer power and the threat of substitutes could guide the Bulgarian cheese company to make informed decisions after launching its operations in this country. The consideration of all aspects and the inclusion of proper business strategies can help deliver positive results.
References
African Development Bank Group. (2021). Analysis of Morocco’s trade policy: Impact of Morocco’s tariff policy on its competitiveness. ADBG.
Aleksiev, G. (2019). Competitiveness of Bulgarian organic products. Trakia Journal of Sciences, 17(1), 455-458. Web.
Morocco cheese and butter imports to rise, benefitting the EU. (2021). Fitch Solutions. Web.
Selina Wamucii. (n.d.). Morocco cheese market insights. Web.
Trading Economics. (2022). Morocco competitiveness rank: Summary. Web.