The Competitive Environment in the Dairy Industry and its Impact on the Food Industry

Abstract

The aim of the paper is to present in-depth view on the competitive environment of the Czech dairy industry. The financial statement analysis evaluates the financial performance of the dairy industry in the period 2007 - 2011. The sample of 38 dairy processors represents leading market players. The basic method for industry analysis is Porter five forces analysis. The paper also comprises brief analysis of technical efficiency of the dairy industry. The economic recession affected the financial performance of the Czech dairy industry in 2008. It was showed by unfavourable input-output price relations. Simultaneously, the economic downturn made consumers to switch from branded dairy products to cheaper private labels, as the analysis proved. The competitive environment within the Czech dairy industry is slightly concentrated with greatly heightened competitive relations. The vertical business relationships within dairy supply chain can be considered as the weakness of the Czech dairy industry.