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Topics: Sainsbury's, Tesco, Asda Pages: 2 (463 words) Published: November 2, 2014
The threat of entry is low when the barriers to entry are high and vice versa. The main barriers to entry are:
Economies of scale/high fixed costs
Experience and learning
Access to supply and distribution channels
Differentiation and market penetration costs
Government restrictions (e.g. licensing)
Entrants must also consider the expected retaliation from organisations already in the market As for what companies can be picked out from the food retail industry, from Appendix two, this report can witness three outstanding companies from food retail industries with shining industry revenue. In addition, from Figure 1, Tesco Plc (Tesco Plc, 2013) and J Sainsbury plc (J Sainsbury pl) are the top two companies generating £64,826 million and £23,303 million respectively in the latest fiscal year. Tesco Plc has taken more than 50% in the food retail industry while J Sainsbury plc takes in 19%. These two companies must be selected because they reflect most of the food retail companies in the UK. When it comes to the reason for selection of Ocado plc (Ocado plc, 2013), which coverage only £679 million out of food retail industry in UK, it is necessary to select a different scale of food retail company in comparison with the big ones.

Threat of Substitutes
Substitutes are products or services that offer a similar benefit to an industry’s products or services, but by a different process.
Customers will switch to alternatives (and thus the threat increases) if:
The price/performance ratio of the substitute is superior (e.g. aluminium maybe more expensive than steel but it is more cost efficient for some car parts)
The substitute benefits from an innovation that improves customer satisfaction (e.g. high speed trains can be quicker than airlines from city centre to city centre) Threat of Substitutes
Substitutes are products or services that offer a similar benefit to an industry’s products or services, but by a different process.
Customers will switch...
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