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    Porters Five Force Model

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    MaimoonaWaseem

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    © All Rights Reserved
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    Porters Five Force Model

    Uploaded by

    MaimoonaWaseem
    2 views1 page

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    porters five force model

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    2 views1 page

    Porters Five Force Model

    Uploaded by

    MaimoonaWaseem

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    Porters Five Forces of the Retail Industry

    I. Supplier Power

    The bargaining power of Suppliers is relatively low. There is a high competition between
    suppliers which means that their ability to raise prices or reduce quantity is very low. Suppliers
    include both domestic and international manufacturers and because many retail products are
    standardized, retailers have low switching costs which make the supplier power low. Larger
    retailers have power over their suppliers because they can threaten suppliers to change to a
    different suppliers which would significantly hurt the suppliers because of their great market
    share. Furthermore larger retailers can vertically integrate with suppliers they are having trouble
    cooperating with.

    II. Bargaining Power of Buyers


    The bargaining power of buyers is relatively low. If consumers choose not to shop at a retail
    outlet they most likely miss out on value or price as well as convenience of shopping retail. Also
    the consumer products are priced the same especially the daily routine usage products
    therefore the prices do not vary from one store to another therefore there is rarely any
    bargaining form the buyers side.

    III. Competitive Rivalry


    Competitive rivalry is medium to high. There are numerous competitors as well as many E-
    retailers that are entering the market rapidly. Also as many new small stores are opening up
    closer to each other so there is lot of rivalry and customer goes only to the place where he gets
    reasonably good quality products at a reasonable price.

    IV. Threat of Substitutes


    Threat of substitutes is low because there are not many substitutes that offer low prices and
    convenience to consumers. The goal of retailers it provide a wide variety of products at one
    location and in many cases create a one stop shopping location.
    V. Threat of new Entrants
    Threat of new entrants in retail industry is higher as the population is increasing also due to
    urbanization and many new residential schemes opening up there are many opportunities for
    people with initially low investments to open up a small retail store and later with the sales
    increase they can grow in long run. Access to suppliers is relatively easy as products are being
    mass marketed. Less capital investment needed. However in a country like Pakistan where the
    retail business is thriving and the rate of market growth is high.

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