Business Case Study: Mr Price Group Ltd.
Mr Price is a company that has built an incredible and unbreakable relationship with the public and investors and has become a force to be reckoned with. Mr Price as formed in1979 by Stewart Cohen and Laurie Chappini, it was started as a fashion retail company and over the years has grown in to one of the top fashion retail company in the country with a turnover of about +/- R1.9 Billion. Due to the growth and increasing demand of Mr Price products, as they were cheaper, Mr Price decided to expand their market and attack a different market. By doing this Mr Price Sport and Home were born, these two divisions would prove to be very helpful in boosting the annual turnover, with Mr Price Sport playing a huge roll. Mr Price Sport …show more content…
This is quite low, as there aren’t many substitute goods for clothes. Mr Price Sport to a large extent have substitute good within the store i.e. hockey shoes, there is always trainer takkies
Mr Price Sport should always try to ensure that they have substitute well within the stores because it will give the business competitors advantage.
Level of rivalry in the market
This analyses the amount Competition in the market. This is very high as these are many different sport apparels retailers in South Africa. In order to understand what the competition is doing, Mr Price could compile a competitors profile and this will highlight the size, financial resources and the market share.
Mr Price can try and include a gift card (loyalty card) that gives you points which entitle you to discount at Mrp stores.
Threat of New entrants:
The probability of new business starting in the market. Very low, as there is a large amount of start-up capital required, and brand loyalty.
Mr Price can try to prevent this by creating barriers for these companies like negotiating with centre management at Malls to limit …show more content…
Mrp must just ensure that the cultural difference between the suppliers and consumers are accounted for by appointing a cultural officer
The whole point of analysing all the external environments of a business is to be able to implement more strategies to create a competitive advantage for the business.
Strategies for the Mrp group:
A corporate combination, joint venture strategy is suggested, as mrp sport apparel and mrp home could join premises to make an mrp superstore- this would save money on rent and could possibly generate more slaes, as more customers might come just for the taste of an mrp superstore. There could also be more impulse shopping, which could lead to more income and sales.
A market penetration strategy is also suggested, as mrp is currently in a stronger economic position than its competitors and thus should capitalise on this