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Comprehensive Analysis of the Retail Industry Student’s Name Institution 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
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