Threat of substitute = with advancement of technologies such as Internet shopping and loyalty programmes from the big supermarkets the threat of substitution could not be greater for Netto. Big supermarkets are offering what Netto will find hard to offer for example, Supermarket Banking. These new services offer convenience to the customer thus, inciting Netto and other discount store customers to shop with big super markets. The advancement of supermarket services saw the discount market slow and will slow down even greater in the future. In order to keep up with the major players Netto has to invest in the advancement of technologies and delve into relationship marketing i.e. loyalty programme schemes.
§Threat of new entrants = currently the only new entrant in to the UK market has been Wal-mart taking over Asda this has been a threatening for Netto and the discount market as this has given Asda more competitive edge over other super markets. The other problem we can foresee is Tesco expanding in to the discount market with their great product range and a very good brand image.
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