Page 84 - DMGT551_RETAIL_BUSINESS_ENVIRONMENT

Unit 4: Retailing Structure

4.2 Competitive Environment in Different Retail Sectors Notes

We operate in the highly competitive discount retail merchandise sector with numerous
competitors, some of whom may have greater resources than the Company. We compete for
customers, merchandise, real estate locations and employees. This competitive environment
subjects us to various risks, including the ability to continue our store and sales growth and to
provide attractive merchandise to our customers at competitive prices that allow us to maintain
our profitability. Consolidation in our retail sector, changes in pricing of merchandise or offerings
of other services by competitors could have a negative impact on the relative attractiveness of
our stores to consumers. Our ability to provide convenience in a small box retail format while
offering attractive, competitively-priced products could be impacted by various actions of our
competitors that are beyond our control. The various factors affecting competition are:
1. Price

(a) Best price for each sale
(b) Tracking/Predicting Market Trends
2. Profit Margin
(a) Flexibility
(b) Reinvestment
3. Quality of Design (Knowing, communicating, and acting on customer’s needs)
(a) Stated Needs

(b) Implied Needs
4. Quality of Manufacturing
5. On-time Delivery (calls, quotes, product, etc.)
6. Order Lead Time
7. Features and Services (non-product related)
8. Sales, Marketing, Brand Name, Reputation
9. Technology
The following is the Porter’s five forces analysis of the Indian Retail Industry:

Figure 4.1

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