¶ … Competitor Product's Market
A short history of the organization and a description of their product
Hostess Brands, Inc. is a company set up in 1930 under the name Interstate Bakeries that later changed to Hostess Brands Inc. In November 2009. The company is located in the United States with its headquarters in Irving Texas. It has an operation centre in Kansas City, Missouri. The company works as a distributor and wholesale baker of snacks in the United States. It owns many brands such as Nature's Pride, Wonder Bread, Bakers Inn, Drake's and Dolly Madison. The company makes and sells cakes, loaves, snacks and rolls under different bakery brands (Smith, 2012).
These brands also make blue berry muffins, cheese Danishes, food cake donuts, honey buns and bear claws among others. Hostess gets revenue through selling of baked goods to mass marketers, supermarkets and stores in the U.S. The privately held bread and snack food producers also sell to consumers online and directly through their bakery outlets. The company along with its partners filed an appeal for reorganisation on January 11, 2012 in the United States bankruptcy court under chapter 11 (Smith, 2012).
Factors that affect demand, supply, and equilibrium prices in the market in which the competitor organization operates
Demand
According to data from Independent market research and Information Resources Incorporated, Hostess has experienced a significant decline in the demand for their bread products and sweet goods. Demand is the key factor in the production of any marketing product and Hostess's brands holds a significant demand. However, there have been factors in the recent times that have led to a consumer sluggish demand for their products. The company has experienced a series of bankruptcy within a decade, and it is currently facing a final liquidation. It is also struggling from a high structure cost and these factors affect its performance that in turn has an effect on consumer demand. This confluence of negative events including competitive pressures and rising commodity costs affects their demand level (Welch & Welch 2009).
Supply
Factors outside the control of individual producers affect the supply of commodities. One key factor is the cost of input of the company. This entails labour and capital. Hostess has had a series of bankruptcy, and this has a direct impact on their supply since it affects their capital. Also with the emergence of other companies producing the same products, there may be a change in consumer preference and in the price of such commodities. Competition from other companies such as Flowers Foods that just expanded its borrowing competence is another factor affecting supply (Welch & Welch 2009).
Equilibrium prices
Equilibrium prices arise when there is an imbalance between the company's supply of goods and the consumer's demand of the same commodity. According to the law of demand and supply, the price of a commodity in a competitive market will be at equilibrium depending on the available demand of that particular commodity. The fact that Hostess is on its way to liquidate has affected its equilibrium prices since this will lead to shortage of supply. Example before Hostess announced that it was going out of business, a box of Twinkies sold for a couple bucks. Currently their supply has stopped, and the price of the same box of Twinkies has increased (Welch & Welch 2009).
Definition of the market for the chosen product, including an analysis of its competitors, potential customers, or potential buyers
The U.S. cookie market has declined recently due to the increase of consumer interest in healthy eating. There is a high consumer demand for cookies that have high fibre, low fat, high protein level and low sugar varieties. To curb this increasing demand, the company has come up with cookies that will meet the consumer's needs that create a substantial opening to broaden their offerings. The high demand will enable Hostess to increase it supply and get high profits (Welch & Welch 2009).
Analysis of its competitors
Hostess will meet competition from other leading...
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