External Analysis Warehouse

In: Business and Management

Submitted By BenB
Words 1816
Pages 8
External Case Report

The Warehouse is one of New Zealand’s largest retail stores. It is owned by The Warehouse Ltd and Stationary Warehouse is also part of this brand. These two stores are part of the retail industry. External factors are constantly changing the environment and industries that businesses operate in today. Analysing these factors is the best way to determine which aspects have the largest effect on the industry and the business.
The retail industry in New Zealand is by no means small. This means that The Warehouse Ltd is constantly under threat from numerous competitors. Stores such as Farmers, Briscoes, Rebel Sports and Dicksmith all sell similar or the same products as The Warehouse Ltd products. In 2011 the total expenditure for the retail industry in New Zealand was $65,901,115 (Retail Research and Statistics, 2009-2011). This is a very high amount of expenditure which means rivals have plenty of opportunities to gain their share within the retail industry in New Zealand.
The Five Forces Analysis is the best way to understand the key dynamics, drivers and forces which control the retail industry. The threat of new entrants to the retail industry is an important aspect. The Five Forces Model states that new entrants can pose to the industry consist of (Hanson, Ireland, Hoskisson, & Ireland, 2011): * Product differentiation * Economies of scale * Capital requirements * Switching costs * Access to distribution channels * Cost disadvantages independent of scale * Government policy * Expected retaliation.

Whether or not suppliers have bargaining power is also an important factor that is related to the retail industry. In this case, suppliers have some amounts of bargaining power. This is due to the amount of retail firms worldwide who are constantly on the lookout for new, good quality products at decreased prices.…...

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