Essay: Threat of New Entrants in the Market

Sample Essay

The retail market in Italy is quite enormous with more than seven hundred thousand stores in the year 2001. However, a large proportion of this substantial amount is covered by numerous small and minute single branch stores. Nonetheless, the larger businesses with numerous branches are becoming more powerful and capturing the market that was once the domain of the smaller businesses.

The Italian market is fragmented on a geographical basis on both financial and social fronts. The Northern and Middle portions of the country are more advanced economically and can afford designer labels, whereas the South is more concerned about the price of the products. The threat of new entrants is higher in the Southern section of Italy, where the smaller retailers operate, whereas in the North the larger chains are dominant. M&S might pursue a more conservative strategy by focusing on the Southern section initially or it will have to take the large retailers “head on” if it targets the Northern areas of the country.

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