One of the important factors for successful management is the knowledge of the competitive environment in which the business operates and the ability to adequately respond to changes. The article describes the creation of Porter’s five forces model for the Czech dairy industry after the abolition of milk quota. As part of a comprehensive analysis, the forces to determine the intensity of competition in dairy industry and its profitability level of milk producers and processors in the Czech Republic are identified and described in detail. Their significance for the affected subjects is quantitatively evaluated. The results show that in the case of milk producers, the most significant competition appears to be current competition in the industry and the bargaining power of the customers, followed by suppliers‘ bargaining power. In contrast, existing competition in the sector and the bargaining power of customers have the greatest importance for milk processors. The model can be applied to the situation of specific businesses operating in this area.
Author: Olga Kutnohorská, Jana Krištůfková
Keywords: Porters´s five forces model, milk, milk quotas, Czech dairy industry