Threat of New Entrants to Retail Business

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Threat of New Entrants The barriers to entry in the retail industry are manageable and possible to overcome. However, independent retailers, those businesses that started from scratch, might find it hard to compete with established retail giants. This makes the retail industry attractive for retail giants but unattractive for independent retailers Bargaining Power of Suppliers In the retail industry, suppliers tend to have very weak bargaining power. Retail giants tend to drop suppliers if their demands are not met. Also, the success of a brand may depend on how they are placed on the shelves of these retail giants. So naturally, suppliers can be at the mercy of retailers. Bargaining Power of Buyers Since prices in most types of retail stores are fixed, buyers tend to have very little, to none at all, bargaining power with retail stores. In department stores, for example, a customer cannot haggle the prices for a product with the sales agent. However, retailers must not abuse this situation as they might drive away even their most loyal customers. Threat of Substitutes Since most retailers provide a wide range of products and services, there is a big possibility that products and services offered by one retailer can also be found in another retailer. Unless a retailer carry exclusive products and services, or can compete heavily on prices, then consumers will have little to no switching costs. Competitive Rivalry Rivalry in the retail industry is high since there are numerous competitors sharing the same market. Even retail giants find themselves in competition with traditional stores, because they are people’s go-to when they run out of something, especially if they need it right away and they do not need a large amount of it.... ... middle of paper ... ...12 stores located in China and the Middle East. The company’s overseas distribution includes China, Middle East and Indonesia. Stores Specialists Inc. Stores Specialists Inc (SSI) is responsible for bringing the world’s top lifestyle brands in the Philippines, such as Aerosole, Bally, Anne Klein, Bass, Gucci, Diesel, Kenneth Cole, Nine West, Prada, Michael Kors and Superga, to mention a few. It is under the Rustans Group of Companies, owned by the Tantoco family. Apart from the aforementioned brands, SSI also established a number of specialty retail and concept stores such as Beauty Bar and Makeroom. The company sells over 50 brands in more than 250 freestanding boutiques and concession outlets throughout the country. Works Cited http://mba-lectures.com/management/strategic-management/1006/strategic-group-mapping-of-retail-chains.html Euromonitor International

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