Answer to Question #193642 in Management for Millicent

Question

2 Discuss Shoprite’s competitive advantage position regarding the other four aspects of Porter’s Five Forces model? 

please use Harvard reference style

Answer 1

A business must be innovative and concentrated on its business environment in order to be more productive and competitive in terms of growth. To achieve a competitive edge, most effective businesses employ Michael Porter's strategies (Parikh, 2018). Shoprite is one of the biggest industries in the world, employing millions of people and delivering services to them. Shoprite competes with Pathmark, Food Town, A&P, Stop Shop, and others by offering the same or better goods and service at a lower price. Shoprite is now attempting to compete with Wal-Mart, the world's largest retailer. They also save money by looking for the right items at the lowest prices. They recently installed a self-checkout lane for customers who do not want to wait in long lines. This saves them money because they won't have to hire more workers to operate the register. These are just a few of the ways Shoprite sticks to their low-cost strategy and makes the most money for their business.

Buyer power is the customer buying choices power (Henshall, 2019). Shoprite has millions of customers. Competitors do offers low prices, and switching to another product is not costly. Shop-Rite gains a competitive advantage by attracting more customers to buy their products, such as through newspaper coupons and a loyalty card (every time you buy something from Shop-Rite, you earn points on your card; the more points you have, the more money you can deduct from your bill), all of which lower product costs. It offers online shipping and gives customer discounts online.

Power of suppliers at Shoprite is low. It has a lot of suppliers whom it can purchase supplies (inventory) from. Businesses want their products to be shown in Shop-Rite, so finding another supplier would not be difficult.

The threat of new entrants is at a medium level. It took a long time to get to where Shop-Rite is now. To be like Shop-Rite, you'll need money and time. Grocery stores that are tiny. Wal-Mart and Target are two of the most well-known retailers. Customer are loyal to the brand. Information and technology will be needed for new business entry into this market.

Due to its scale, proper management, and high technology investment, Shoprite faces minimal competition from its competitor. By using advanced technologies, Shoprite is able to reduce its costs and pass them on to its customers while still making a profit. Shoprite sends out emails to its customers if there is a commodity discount. When a product is scanned, a signal is sent to managers, who then place orders with manufacturers, who submit further inventories. Shop-Rite keeps its customers by offering high-quality goods at affordable prices and excellent service.

Reference List

Henshall, A., 2019. What is Porter’s five forces model? Competitive position analysis explained. [online] Process Street. Available at: <https://www.process.st/porters-five-forces/> [Accessed 21 May 2021].

Parikh, V., 2018. Porter five forces model advantages and disadvantages. [online] Lets Learn Finance. Available at: <https://www.letslearnfinance.com/porter-five-forces-model-advantages-and-disadvantages.html> [Accessed 21 May 2021].