Industry structure is a powerful tool that can be used to understand the dynamics of competition. It highlights how external forces constrain or create strategic opportunities for companies. Diamond Foods (the Company) is a niche snack food manufacturer of potato chips, popcorn, and roasted and salted nuts. The Company is a relatively small player in a huge industry (sector: consumer staples, sub-industry: packaged food and meats) dominated by PepsiCo, ConAgra, General Mills, and Kraft Foods. The smaller players in the industry include Golden Enterprise, Inventure Foods, J&J Snack Foods, John B. Sanfilippo and Son, and Snyder's-Lance. The industry information can be obtained from a variety of sources including S&P Capital IQ and IBISWorld Industry Report.
Industry analysis is often done using Porter's (1979) five forces framework. The framework views industry as a collection of competitors that vie for bargaining power with consumers and suppliers and compete among themselves while facing...