El Corte Inglés Case Study
Trends in Demand/Supply:
In the last 30 years Spain and Portugal have seen their economies grow, especially after the entrance in the European Union. But now their economies tend to stabilize. This will have a negative impact because it will increase the concentration in the retail markets but in the other hand it will increase the consumption.
The populations of developed countries are getting older and some years from now we are seeing a very big development from the surrounding areas of the main cities. These two factors can explain the increase of people that it frequents this commercial superficies.
Technological innovation is a very important tendency because it will provide better services and new business channels.
5 Forces Model
• Potential of New Entries: Medium/Low- it’s necessary a big initial investment and a license.
• Pressure of Substitute Products: Medium- the substitute products are the traditional shops that in the main areas of business don’t represent a threat, only in a specific area or in the direct interaction with the customer.
• Bargaining Power of the Suppliers: Medium/High- the suppliers are very important, it’s a big advantage to the company to have all the best suppliers but they, as El Corte Ingles, are an important client so they have some negotiation power.
• Bargaining Power of the Clients: High- the clients have many places to choose where they want to shop, if they aren’t satisfied they will go to another shopping center, for instance.
• Rivalry between Current Competitors: High- in our days it’s very difficult to add an advantage to the client in this sector so we have a lot of brands competing in quality of product/service and price.
Key Success Factors
• Cost: only by reducing the costs the company will satisfy the needs of their clients, which want a product with a lower price possible and at the same time...