The Importance of the Retail Industry to the World Economy

891 WordsJul 17, 20184 Pages
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…show more content…
Legal When operating in U.S. the retail industry experience’s too many rules and regulations set by the government. These laws could be anything from not giving an opportunity to minorities or hiring illegal immigrant. Not complying with the rule and regulation could result in fines. Porter’s Five Forces Entrants- High The brand name and the number and location of retail stores appears’ to be the main barriers to entry. The retail industry also has the advantage of an established name. A retail store that has been around for quite some time generally is not affected the new entrants due to the high cost. The company will have difficulty in gaining customers unless they can provide innovative strategies that are better than the others in the retail industry for it to be able to get the customers retail business. Rivalry- Low There are few direct competitors in the retail industry. Any competitive rivalry that comes into the market has very low influence on a retail industry that has been around. Since there are limited numbers of competitors there is low rivalry. Also, new competitors don’t have much power over other in the industry since they have more of the market share. Substitutes- moderate to high A substitute has higher effect because substitution could make the company lose profit. In order to avoid these, companies always need to be in tune with customer needs and wants. Also, providing excellent service and
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