Porter's 5 Forces

Porter's Five Forces

Competitive Rivalry - The competition is at the medium level this is because although the entry to the industry is quite easy the company is working a niche angle with their online service especially in the London area where no one else is running the same type of operation. The industry is not costly to leave and at the moment and GCO has a different strategy from its competitors.

Power of Suppliers - The power of suppliers is low/low-medium, GCO can easily move between different suppliers for groceries. Currently they have built up good relationships with various suppliers. Most suppliers carry similar products with price being quite consistent. The specialty food stores such as local international food suppliers and organic food suppliers would be a bit more difficult to replace but most of their sales come from the common, essential local groceries.

Power of Buyers - The power of buyers is medium. Prices are pretty similar when comparing GCO to other grocery stores, the extra you pay is for the service and convenience. Those people that do not want to go to the grocery store will pay for that convenience mainly University students who don't have cars or want to save on gas. Again the strategic angle that GCO is taking here includes added service to similar products.

Threat of Substitutes - The threat of substitutes is medium/medium-high. The product is easy to substitute but the service and convenience again lowers this threat. Other grocery stores are considering the online service but right now GCO is the only one with a functioning system that is operating in the area.

Threat of New Entrants - The threat of new entrants is medium but the threat of current competitors considering expanding into the online grocery market brings this up to medium-high. If GCO no longer differentiate themselves with this service then the larger grocery chains can take over by offering better prices for the same service.