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Food Retail Industry in Mexico - Porter's Five Forces Strategy Analysis
Aruvian's R'search, March 2009, Pages: 20
Supermarkets and department stores, in Mexico, continue to provide exporters worldwide with the best points-of-sale. There are approximately 1,930 retail stores in Mexico selling food and beverages, a figure that includes outlets for major retail chains and government stores, but excludes convenience and small family stores. The major retailers are developing increasingly sophisticated distribution systems. However in the case of frozen foods and perishables, retail stores still depend heavily on local distributors.
Traditional retail stores ('mom and pop' stores) are a large market segment, but are not yet a viable option for imported products. Traditional retail stores serve a large number of Mexican consumers but offer less potential for selling imported products. Similarly, outdoor markets (tianguis) sell few import products, except for nuts and deciduous fruits.
Aruvian Research analyzes the Food Retail Industry in Mexico in Michael Porter’s Five Forces Analysis. It uses concepts developed in Industrial Organization (IO) economics to derive five forces that determine the competitive intensity and therefore attractiveness of a market. Porter referred to these forces as the microenvironment, to contrast it with the more general term macro-environment. They consist of those forces close to a company that affect its ability to serve its customers and make a profit. A change in any of the forces normally requires a company to re-assess the marketplace.
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