Using appropriate model to Assess the attractiveness, to Daily Mart, of entering the discount fixed-price retail market in Bangladesh.

One of the most often used business strategy tools for organisations to have a better understanding of the primary competitive forces operating in their market is Porter's Five Forces model. Michael Porter, a professor at Harvard Business School, developed the Five Forces Model, which was initially released in 1979. Porter's Five Forces are competitive rivalry, supplier power, buyer power, threat of substitution, and threat of new entry. When evaluating strategy, the model advises firms to take into account external factors rather than only their direct rivals. Organisations can strengthen and improve their competitive position in the market by redefining their strategy, identifying areas for improvement, and making better judgements by comprehending these influences. Assessment Force 1 - Existing competitive rivalry There are currently four competitors on the market, and it seems like there is fierce competition. These businesses would probably oppose a newcomer to the market, especially a big, global competitor like Daily Mart. This would most likely be accomplished by tightening supplier contracts, expanding stores quickly, and increasing marketing. Nevertheless, despite the recession, the scenario's data indicates that the "everything at 99" shop market sector is still expanding. This would imply that rivals may enhance their outcomes by just keeping up with industry performance. Because other geographic areas that aren't yet fully supplied by the current competitors can be exploited, the market may even gain legitimacy and continue to grow as a result of Daily Mart's entry. Moreover, Daily Mart is making income (bottom line) of 24crores in existing country; which more than total revenue (top line) of all four 'everything at 99' stores taken together i.e.22.60 crores; hence size of operation is a plus for Daily Mart. Force 2 - Bargaining power of suppliers The bargaining strength of Daily Mart's suppliers is minimal. Daily Mart Stores are the primary clients of several small suppliers, with the exception of the almond provider. Due of the lack of differentiation in the items, Daily Mart can easily switch suppliers. It is improbable that any of these vendors could use forward integration to compete with their present clients. The suppliers of Daily Mart don't have much negotiating power. Their primary clients are Daily Mart Stores, and there are several small suppliers (apart from the almond supplier). Additionally, the items lack differentiation, making it simple for Daily Mart to switch vendors. By using forward integration, none of these providers are likely to become rivals of their present clients. Force 3 - Bargaining power of customers Customers of Daily Mart have significant negotiating leverage. There are several reasons for this: Customers looking for cheaper purchase costs are drawn to the products because of their low profit margin.The buyer can easily move to a different supplier because Daily Mart provides unbranded commodity goods. As a result, switching costs are minimal.Other suppliers can readily offer standard, undifferentiated products. In order to get the best terms of supply, customers can thus select which supplier to work with and pit the businesses against one another.Because they are probably extremely price sensitive, customers will make significant efforts to secure the best terms of supply. Force 4 - Threat of substitutes The "everything at 99" stores could be replaced by traditional supermarkets since they provide a large selection of ambient goods, frequently with rival brands available. The prices varies, though, and no supermarket has yet to use the discount fixed-price sale strategy; instead, they prefer to set themselves apart with well-known brands. Since the supermarkets are out of town with plenty of parking and easy access by car, location is also a crucial factor. However, because Daily Mart is a well-known and significant participant in the fixed-price sector, supermarkets may change their strategy as a result of its entry into the Bangladesh countries. Traditional supermarkets also provide home delivery and online shopping. The internet might also be viewed as a substitute channel because ambient items, like those sold at 'everything at 99' stores, are ideally suited to this strategy. However, considering how sensitive buyers are to pricing, the - 25-50 delivery fee might lessen this threat. Moreover, Daily Mart is making income (bottom line) of 24crores in existing country; while the largest traditional supermarket player in county Bangladesh has revenue (top line) of 8.5 crores in F.Y. 2024-25; hence size of operation is a plus for Daily Mart or act a back-up to be there and overcome initial hard days in the country Bangladesh. Force 5 - Potential entrants and barriers to entry The substantial amount of capital needed to have a credible presence in this sector is a major barrier to entrance. This is not expected to be an issue for Daily Mart, though, since it has the funds on hand to lease a sizable number of stores in Bangladesh and build a respectable presence in the region. Since many towns and cities now have empty stores that are reasonably priced to rent, the lower rental costs that are now available in Bangladesh also help to lower capital expenditures. Additionally, more and more landlords are agreeing to rent these establishments for a comparatively short fixed-term lease, whereas previously they demanded exorbitant prices and lengthy leases. As a result, this market's departure costs are decreased. Brand awareness is one entry barrier that could pose a challenge for Daily Mart. The current competitors have more than 85% brand recognition rate, while only 10% of people are familiar with Daily Mart. If Daily Mart wants to succeed in this market, it could need to invest a lot of money in a big marketing campaign. (Note – Answer is explanatory in nature, reasonable amount of explanation by students is also acceptable; provided they cover/consider all important facts/points)