Industry Analysis Department Store

4941 words 20 pages
Department Store Industry
NACIS 452111

Table of Contents

Introduction…………………………………………………………………………….………… 3

The Industry’s Dominant Economic Features……………………………………………………………..……………………….…… 3

Porters 5 Forces…………...……………………………………………………..…………………………. 7

Power of Buyers…………………………………….……….…………………………….7

Power of Suppliers……………………………………….………………………………. 7

Barriers to Entry…………………………………..……………………………………… 7

Threat of Substitutes……………………………...…………...…………………………. 7

Competitive Rivalry………………………………………….……………………………8

The Drivers of Change………………...………………………………………………………………..…………9

Companies in the Strongest/Weakest Positions………………………...………………………..11

Industry’s Attractiveness and Prospects for Long-Term
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(Lekovic 22) * Credit relationships for purchasing products by department stores from manufacturers would be very favorable due to the volume of purchases made by the stores. * Like K-Mart with their layaway & Target with their bulls-eye, make for great advertising and are retained in memory due to their repetitive ad campaigns. Huge amounts of resources comparative to the firms’ sizes are spent to appeal to their respective niches in the market. Due to their size can they easily absorb the marketing costs and not raise their product prices.

* To what extent do learning curves exist * The learning curve for this industry would not be steep, since there is very little technical and complex knowledge involved. But education and training still exists for the employees who need to understand the products they sell. For the department stores, they need to forecast demands of the consumers so they can supply the appropriate products. * Are high rates of capacity utilization important for profitability * Due to the recession department stores have not been able to decrease capacity in line with the decrease in demand. (Lekovic 7) Therefore capacity utilization if in its optimal level will be favorable for profitability. This will reduce

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