The Analysis of U.S Retail Industry Development

4911 Words Feb 7th, 2013 20 Pages
The analysis of U.S retail industry development

What is the retail industry

Retail is the sale of goods and services from individuals or businesses to the end user. Retailers are part of an integrated system called the supply chain. A retailer purchases goods or products in large quantities from manufacturers or directly through a wholesaler, and then sells smaller quantities to the consumer for a profit.
Retailing involves a direct interface with the customer and the coordination of business activities from end to end-right from the concept or design stage of a product or offering, to its delivery and post-delivery service to the customer. The industry has contributed to the
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In many regions, acquisition strategies are used by large retailers to enter local markets. In a long time, Giant retailers purchase small- and middle-size local retail companies, while they are infant, to expand their business in the local areas. However, in mature markets, few retailers want to sell. It’s tough for retailers to enter overseas or foreign markets by acquiring local players. Even worse, new local competitors, who probably know more information about the local markets, would enter if there are any potential profits. In emerging markets, few chains have developed large networks of stores. The retailing is usually highly fragmented and largely scattered, which also make hard acquisition work.
In addition, consumers in developing countries perceive foreign retailers to be premium players. In eyes of the residents, they may be more expensive than local groceries. On the other hand, in developed countries, foreign entrants are expected to bring some new, different, and valuable products and services. Customers would prefer local retailers if foreign entrants just operate as same as locals’ did. This unfair judgment on local and foreign retailers makes high entry barriers to foreign entrants. Finally, laws in relatively closed markets protect local business from foreign competition.
Second, Grocery retailing is a high fixed cost, low margin business with long
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