Hence, every company in this industry has to form its own niche and then has to keep in mind its core customer base throughout. Each brand in this business has established its identity in its own niche even though the products sold are not differentiated.
There are several players that each offer their benefits whether it is high quality of imported products, exclusive organic produce, huge bulk quantities which result in bulk discounts, or great customer experience.
The industry in which ShopRite works in is intensely competitive as there are many supermarket chains, and the product differentiation is minimal. The impact of key competitors in the ShopRite Porter Five Forces Analysis is as follows: Thus, we can say that the bargaining power of suppliers is minimal and therefore this is a very weak force. There are no switching costs involved when it comes to changing suppliers and hence this shifts the balance in favor of ShopRite. Hence, the company can bargain for great prices and bulk quantities. This means that the bargaining power is entirely in the hands of ShopRite as the company can afford to lose some suppliers as there are plenty of competitors in the market that can supply the same kind of product. This means that the competition between each of these is quite high and they will actually be paying ShopRite for selling their products in the form of distributor’s margin. There are plenty of suppliers supplying their products to ShopRite’s stores. This means this bargaining power of the customers is moderate and thus this is a moderate force.įollowing is the bargaining power of suppliers in the Porter’s Five Forces analysis of ShopRite: However, the company has to make sure that most of its customer base is satisfied, and hence must take steps towards the same. If the population that the store serves is large, then the bargaining power of the individual customer becomes quite low as the demands of a single customer may not be met because the loss of one customer will not matter to the company. The stores will also have to stock the kind of products that are in demand and hence the bargaining power of the customer is high in this case. Hence, they will have to be given either a good experience, or low prices for them to return to shop in these stores instead of looking for alternatives. In the ShopRite Porter Five Forces Analysis the bargaining power of the customers can be explained as:Īt ShopRite, the customer has a decent amount of bargaining power over prices as only the people living in the neighborhood will be the regular customers.
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