What Are The Five Key Factors The Model Uses For Identify And Evaluate Potential Opportunities And Risk?

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The five key factors the model uses to identify and evaluate potential opportunities and risk are risk of entry by potential competitors, threat of substitutes, bargaining power of suppliers, bargaining power of buyers and intensity of rivalry among established firms. As for The Co-operative, I consider that they barely have risk of entry by potential competitors. The most important reason is the price of products. Just I mentioned above, this grocery retailer tend to create strategy of low price in this industry. As we known, low price strategy will make most potential competitors give up, the key factor is low price will cause them cannot compete existing enterprises. After all, most of existing grocer y retailers have existing distribution and customers, thus they can control their price of products lower than new entrants. That is the main reason why they face lower risk of entry by potential competitors. At the same time, large economic scale results in them have power to bargain the price and control the cost, thus this retailer can get the fantastic price from the suppliers. Finally, most customers will be attracted by their low price products. This phenomenon shows that they are the higher bargaining power of buyers in this industry. In the most of case, lower price equal this retailer has larger bargaining power. Just like a theory of economy, if buyer want to buy many products and has large-scale economy, these factors will make them have very strong power to
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