Answer

Threat of Substitute Products or Services

• High Threats of Substitute due to Technology Improvement

Technology advancements have resulted to lower prices due to reduced cost of production. Technological and innovative advancement has ushered new streams of substitute products in the market that are readily available for relatively lower prices. One major threat for Beyond Meat is Impossible Foods that has recently partnered with Burger King in the fast-food sector. These substitutes are adopting strategies that will scale up their production, placing Beyond Meat under constant threat of being replaced in the market by. Further, substitute products affect profitability margins, limiting industry profit. 

• Lifestyle Changing Trends towards Healthy Products

            Recent trends reveal a rise in the shift towards healthier products, with a significant number switching to organic products. As a result, customer loyalty has been threatened as they are now shifting towards who can deliver the best and most preferred products to the market. Reinicke (2019) suggests that with food products, switching costs tend to be low, especially with unsteady customer loyalty. This comes as a threat to Beyond Meat as it impacts customers’ meat preferences. The uncertainty of customer preferences shifts gives substitutes the possibility of an entry opportunity into the industry, further strengthening substitute threats.

            Overall, the threat of substitute product and services for Beyond Meat are strong due to increased availability of substitute products, low substituting cost and high performance/cost ratio of substitute products. Reinicke (2019), suggests that while there is little that Beyond Meat can do in response to the threat of substitutes, establishing more distribution channels can be a great alternative for maintaining meatless dominance. Also, the company should focus on providing more premium products that will help increase profit margins by increasing its bargaining power against substitutes. 

REFERENCES