The Importance of the Retail Industry to the World Economy

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Executive Summery

The retail industry is a very important part of the world economy. “Variety can be categorized by different level of service, and generally fall into one of the following categories: discount department stores, wholesale clubs, supercenters, hyper marts, and so-called category killers” (Variety Stores). A retail business operates in a fixed market location selling goods and service for consumers. The retail industry buys goods from the supplier in large quantities to provide to consumers and make a profit. This could include anything from consumer product and delivery of products to consumers.

PESTLE analysis

Political

The change in politics and policy sometimes affects domestic and international firms. However, the retail industry has benefited from the free trade agreement between the United States and Asia. This has given the U.S. market the opportunity to expand and have a huge profit.

Economic

The United States is the number one consumer in the global market. The global market depends heavily in the U.S market. Due to the free trade agreement, the U.S market has grown rapidly. Also, the market was able to provide goods at low cost, encouraging sales growth and increasing profitability. However, the current situation with the economy could slow down the growth of the industry due to the price of crude oil continuing to rise. This affects the overall industry. Moreover, the increase in the price of oil affects the consumers because the cost is transferred to the consumers.

Social

Knowing the consumer’s needs and wants is necessary for the industry to be successful. However, not understanding the customer’s needs could potentially harm the company market share.

Technology

The opportunity on t...

... middle of paper ...

...al force is also the most important force that the industry needs to always keep an eye on. If there is any change in the external environment it could hurt the industry overall. In order to avoid these things the industry need to constantly monitor the external environment and have a backup plan to change that might happen.

Reference

Important Part of Retail Business. (n.d.). Retrieved from http://ivythesis.typepad.com/ topics/2009/01/important-part-of-retail-business.html

Global Powers of Retailing 2011 (n.d.). In Deloitte. Retrieved June 10, 2011,

fromhttp://www.deloitte.com/assets/DcomGlobal/Local%20Assets/

Documents/Consumer%20Business/dtt_globalpowersofretailing2011.pdf

Variety Stores. Encyclopedia of American Industries. Online Edition. Retrieved

June 10, 2011, from Business and Company Resource Center. (I2501400716).

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