Is the supermarket industry still attractive? 5 Forces Competitive Structure
- Domestic supermarkets started in Changdong, which opened in 1993, and the top three companies occupy most of the market.
- 5 With Forces, the barrier to entry is high, but the threat of substitutes for online shopping is great.
- Economies of scale, logistics, and on-line linkage are key success factors.
Contents
Many people say that the big grocery stores that used to haul carts every weekend are not what they used to be these days. So is the supermarket industry still a viable market? The data is a report that analyzed the structure of the supermarket industry and determined its attractiveness with Porter's 5 Forces. Let's follow the analysis method step by step and summarize the tips we use for the assignment.
How did domestic supermarkets grow?
According to the data, the Korean supermarket began in November 1993 at a discount store that opened in Changdong, Seoul. Since then, several companies have jumped in, and the distribution structure, which used to be centered around traditional markets, neighborhood retail stores, and department stores, has changed to be centered around large grocery stores.
The data explains that the top three companies account for more than 80% of the supermarket market and are called the Big Three. The starting point of the analysis is that it is the oligopoly in which minority companies divide the market.
5 What does Forces stand for?
Porter's 5 Forces looks at the five forces that determine the profitability of an industry. It is the competition between existing companies, the threat of new entrants, the threat of substitutes, the bargaining power of suppliers, and the bargaining power of buyers.
Definitions and examples of each force can be found in more detail in Porter's 5 Forces model documentation.
The stronger the five forces, the harder it is for a company to make a profit, and the less attractive the industry is. So judging and justifying each force as high, medium, or low is the basis of the analysis.
자격증 공부는 시험 일정부터 확인하고 거꾸로 계획을 세우니까 훨씬 수월하더라고요. 공부한 시간을 짧게 기록해 두면 동기 부여가 되는 것 같아요.
What if I apply it to a large grocery store?
Threats from new entrants are low. This is because it requires a large site, huge investment, and a logistics network, and it has a high barrier to entry because it also regulates the opening of stores. The bargaining power of suppliers is also generally weak due to the large purchasing power of large distributors.
Even on the supplier side, large food manufacturers and popular brands can have strong negotiating power, so the analysis is more accurate if you add that the judgment may vary from item to item.
On the other hand, buyers are increasingly negotiating because it is easy to compare prices, and most importantly, there is a great threat of substitutes such as online shopping, early morning delivery, and convenience stores. The price competition between the big three is also fierce, so the existing competition intensity is also high.
Attractiveness and key success factors?
Combining the five forces, it is difficult to enter, but the competition inside and the pressure of substitutes are high, so it can be judged that the attractiveness of new entrants is not high. Mercury strategy is an important market for existing operators.
| Term | Meaning |
|---|---|
| 5 Forces | A framework for analyzing the competitive strength of an industry with five forces |
| Entry barrier | How difficult it is for a new company to enter the market |
| Substitutes | Other goods or services that meet the same needs |
| Key Success Factors | What you need to do to win in the industry |
Key success factors include price competitiveness from economies of scale, efficient logistics and inventory management, own-branded products, and delivery services that connect stores with online. Attempts to turn the store into an Experience are on the same page.
Tips for writing assignments
As a result of the analysis, it is good to organize the five forces into a table and write down the judgment and the rationale in each column. Then, in order of attractiveness, conclusions, key success factors, and company-specific response cases, logic follows.
The market share and number of stores will change from year to year, so please check the latest disclosures and statistics to identify the year. 5 Forces is a framework for looking at the structure of a particular point in time, so changes such as digital transformation are good to point out separately in the conclusion.
Created by CampusDown Editorial Department (2026-10-22 Review). The data used as a basis is the Big Mart Industrial Structure 5 Factor Analysis Report, and it is a learning description, so it is safe to check the official standards before actual application.
FAQ
When did you get your first mega mart in Korea?
According to the data, it is the Changdong branch in November 1993.
What is your biggest threat?
It's the threat of substitutes like online shopping.
What are the key success factors?
It's a combination of price competitiveness, logistics, its own brand, and on-line.