Porters Five of ASDA Essay Example | Topics and Well Written Essays - 500 words

Porters Five of ASDA - Essay Example Nevertheless Porter claims that competitive rivalry is one of the most important issues, which should be considered by the businesses. In the face of the threat of new entrants, every company is subjected to the external risks. There is a need for huge financial investments to develop a successful chain store. There are many challenges in retail market and a new entrant demands something more, radically new which will attract the customers. Key retailers depend on their brand names and are highly concerned about their reputation. Very often retailers depend on the market shares and it is appropriate for them to decide whether they use appropriate measures or not. Morever, retailers are concerned about possible methods, such as litigation, for example. It is very important to compensate market share knowledge and very often foreign investors are a certain barrier to new entrants. It is impossible to substitute food and clothes. Therefore, the threat of substitutes is relatively low. It should be mentioned that the main threat should be expected from the main brand names of chain stores, Sainsbury, Tesco and Morrison. These chain stores provide less affordable alternatives and the threat of substitutes is relatively high. Tesco is the main rival to the company and Asda demands lower prices and intensifies price war. Asda demands lower prices and creates a certain trap for the suppliers thus triggering price war. The challenges of price competitors make suppliers decrease prices. Asda reduces prices and it attracts customers by affordable prices. More than 3000 products are very intriguing and appealing in the modern market. It is relevant of this chain stores to implement strategies of online advertising, products promotion, emails and letters. There are many customers which can communicate online with respect to some products.