Comprehensive Analysis of the Retail Industry revised

Comprehensive Analysis of the Retail Industry
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Comprehensive Analysis of the Retail Industry
The retail industry faces various threats which affect firms operating businesses in this industry. These threats vary in their intensity and pressure and, therefore, affect retail companies differently.
Threat of Entry
Companies in the retail industry face this threat since it is easy for new firms to enter the industry due to the low amount of capital required. Further, there are fewer government regulations in the industry. New companies can access the suppliers and distributors easily, therefore, making it easy for them to start the business. The threat level is high in this industry since new companies coming into the industry are many, meaning that the profit will decline (Pradhan, 2009). Dick Sporting Goods Inc. has been losing its market share due to the new entrants in the industry. The company has lost a small market share in the niche category.
Threat of Rivalry
Competitors in the retail industry are in constant rivalry due to each having a desire to own a large market share. These companies use various strategies to establish themselves in the industry. Price wars, product differentiation, and economies of scale are some of the tactics that are employed by firms in this industry. The level of this threat is medium. Dick Sporting Goods Inc. faces great competition, and this is a significant threat since these companies are after its market share.

Threat of Substitutes
The threat of substitutes exists among companies operating in the retail industry. It is possible for customers to shift from purchasing goods from one retailer to another. The threat of substitutes is the significant due availability of a variety of similar products in other retail stores. The products of Dick Sporting Goods Inc. are unique. However, competitors have substitute goods that are sold at a lower price and sometimes customers shift to those products.
Threat of Suppliers
There are many suppliers in this industry. It is, therefore, makes it difficult for suppliers to affect the retail industry since there is greater competition among the suppliers. The supplies are also readily available to retailers, and this tends to affect suppliers. The level of this threat is low. Dick Sporting Goods Inc. lacks supplies that are innovative. The supply of such products is not regular leading to low and high swings in its sales.
Threat of Buyers
Even though the number of buyers in this industry is enormous, the amount of goods purchased by individuals is small. Buyers can impose little pressure on this industry. The purchase of every buyer is expanded that it cannot put pressure on companies in this industry (Pradhan, 2009). Dick Sporting Goods Inc. is facing some challenges with its customers where the online channel is preferred to existing physical infrastructure which is a great threat.

Reference
Pradhan, S. (2009). Retailing management: Text and cases. New Delhi, India: Tata Mcgraw-Hill Education Pvt. Ltd.