Bharti Walmart 5 Forces
1294 words 6 pagesQ1. Analyze the retail scenario in India in terms of Porter’s Five Forces and investigate the growth across different segments of retailing. Ans:
Indian Retail Scenario in terms of Porter Five Forces
Porter in 1974 has given “Five Forces” model to assess the industry environment.
Five forces of Porter model which determine effectiveness of any Industry are: 1. Barriers to Entry 2. Bargaining Power of Buyers 3. Bargaining Power of Suppliers 4. Threat of Substitutes 5. Rivalry among Competitors
1. Barriers to Entry
India’s Retail industry has high barriers to entry for Global retailers. Reasons are as below. * Strict Regulation to prevent entry of global retailers to operate freely into India. Indian retail industry is …show more content…
Due to good prospects many national and international players are entering into India retail market and making it more and more competitive. * Major local retailers are expanding massively. Reliance, Bharti Group, Pantaloon, RP Goenka (RPG), Lifestyle, Raheja, Trent, Vishal Group etc… are expanding at aggressive pace. * International retail players like South Africa’s Shop Rite, Metro AG from Germany has already arrived in India and set-up “cash and carry” business that supply to caterers, restaurants, retailers, and other businesses. * Tesco and Carrefour have planned to invest US$100 Mn into Indian Retail market. * Price war has already begun and no one can increase prices unilaterally. Often prices are dropped to boost sales and triggered competitors to do so.
In summary if we see all the five forces of Porter and draw inferences on profitability then Indian retail industry looks promising. Table below illustrates that. Porter Force | Intensity | Profitability | Barriers to Entry | High | High | Bargaining Power of Buyers | Low | High | Bargaining Power of Suppliers | Low | High | Threat of Substitutes | Low | High | Rivalry among Competitors | Moderate to High | Moderate to Low |
Since four Porter forces are have positive impact on profit so Indian retail industry has bright prospects. It will be good decision to enter into the Indian retail industry.
Growth across Different Segment of