In the classical Porter’s Five Forces Model,
the bargaining power of suppliers and the bargaining power of
customers reflect the firm's “vertical” linkages with external actors (Rugman and Verbeke, 2000).
In this case, primary poultry breeders are major suppliers in this food supply chain.
Given the extremely high concentration in this industry, the bargaining power of these suppliers is very high.
Primary poultry breeders are interested on promoting a mass production system for the primary production of table eggs that pushes high product volumes downstream the supply chain.
On the other side of the consumption egg supply chain, large food retailers are the main customers of the SME studied. They also have a relatively high bargaining power.
But they are adopting Just in Time strategies to minimize the cost of maintaining large inventories while improving coordination with suppliers to avoid stockouts. These strategies are promoting that food suppliers introduce pull production systems.
But table egg suppliers face difficulties to introduce pull production systems because the primary production system has been designed as a highly pushing mass production system
classical