Business

UK retailers are said to be advantageous compared to European and US counterparts because it possesses distinct features that make the markets more profitable.

Using the Five Forces Model, it can be seen that UK retailers have a significant profitable advantage compared to European and US counterparts.

First, considering the bargaining power of  buyers, UK is said to be advantageous as such there is a significant strength in terms of the buyer concentration and number of alternative sources of supply. Since UK retailers are owned by the public, there is less competitor compared to private owned business in a country (Seth  Randall, 1999). There is a great chance for more competitors if the business sector is owned by private companies and individuals. Likewise, since the markets are publicly owned, the number of buyers or consumers are centralized.

Another strength of the UK retailers is the collective bargaining power of the suppliers. Since there are no private competitors, the power of the suppliers is centralized. This means that there is more profit for the suppliers since there is competitor.

Furthermore, in terms of the threat of new entrants, UK market is said to be advantageous because there is no evidence of competitive private sectors. On the other hand, this is also associated to disadvantages since competition is a strong ground for products and services improvements and innovations. But the UK retailers can cover up this disadvantage because of their advantageous margin on sales. It is indicated in the case study that profit margin on sales of the UK retailers consistently rose for several years (Seth  Randall, 1999). Likewise, since the distribution of goods are centralized, there is a logistic and proper deliveries of goods and services to different warehouses.

Labor costs in UK, in addition, are lower compared to Europe and US because the proportion of part time labor in supermarket is higher than others (Seth  Randall, 1999). Nevertheless, in terms of competitive rivalry, UK is said to be less advantageous since the distribution is centralized and the markets are publicly owned.

Hence, in general, UK retailers are to be considered more profitable than the other counterparts as far as the Five Forces Model is concerned. Uks centralized system of distribution, power of buyers and retailers are the determining factors that put them in the ladder of success.