The UK retail industry is at а very advanced stage most likely the western world where barriers to entry are undoubtedly very high. This basically means there are very little potentials for new entrants to establish themselves in the market. New entrants may require to invest huge amount of money in order to survive, competing against the most experienced retail sector within theUK. On the other hand, local knowledge is remarkably fundamental within the food retail sectors, which sometimes would be very difficult for foreign firms to imitate. Perhaps, they also would have to develop а significant brand image in the new market, which takes years to establish (Doyle 2009).
Porter’s 5 forces analysis – Threats of Substitutes
One of the major threats of substitutes may arise when one supermarket company takes over the business of the other companies. For example, because of the recent economic downturn company likeICELANDwas taken over by other companies other than that, there are less possibilities of threats of substitute in the food retail industry as it has become an essential part of consumer’s day to day life especially in the modern world. However, it will be very difficult to substitute these organisations because now а day with their innovative food products and other efficient services customers can pleasure the total shopping experience under one roof. Moreover, as the supermarkets are getting more globalised, the competition in the market is forcing companies to bring alternative products and services every single day which makes them more powerful to remain in the market.