1) Using porter’s 5 force we look in to the attractiveness of the NESTA of entering in the retail

market in Eurobia.

Bargaining power of suppliers

As there are number of suppliers in the market the bargaining power of suppliers is really low. Even
one of the supplier decline to give low price NESTA can choose another supplier easily.

The chance of bargaining is low because the product already low profit margin that makes the
suppliers to provide the product at a certain rate. Product is standardised and undifferentiated and
its target price is fixed.

NESTA core strength is logistics system and supplier selection. So NESTA have a great strength over
the suppliers and there is less chance of forward integration of suppliers.

NESTA have a great cash revenue (120 million) and they are well known consumer good retail
market. There for NESTA will one of the best customer for the suppliers. Supplier will more focus on
NESTA

Bargaining power of customers

The product is standardised and undifferentiated so the customers can easily switch because the
product is same in the market and there is no difference in price.

Due to the economic decline customers are more focusing on dollar shops. Customers are facing
economic recession which makes to move low price product.

Brand awareness is less. Nesta is new to the market and the customers are more familiar with the
current competitors. Its shown 90% of the customers is known by the current competitor. Even
though as the product and price same it wont be much of threat for NESTA. By this bargaining power
customer is also low.

Competitors/Rivalry

When it comes to the competition also NESTA doesn’t face much of a threat. There are mainly three
competitors in the market and they have good brand awareness among the market. But even
though NESTA brand awareness is less with high Revenue of 120 million and they planning to
establish many shops competition will be less

Having these much revenue make NESTA to compete among other companies easily as we can see
there total revenue is far less when comparing to NESTA current revenue.

The fixed price dollar shop is planning expand and they advertise a lot about fixed price dollar shop
to make awareness to the customers. This may cause trouble the competition increase as they stress
in expansion. But NESTA can easily outcome all these because they have great cash reserve and high
management skill.

Threat of entrance

For NESTA there are less barriers in the market. Currently the competitors are located in the towns
and centre of the cities due to the recession the shop rented out for low cost this makes NESTA to
enter the market easily.
Because of the low rent and empty shops NESTA can establish lots of shops in Eurobia market in that
way NESTA can out perform the current competitors. Even there is less awareness by establishing
lots of shops may help to overcome that threat.

Threat of substitute

Supermarkets are a threat for the dollars in some extent as they provide the lots of other product
and services and mainly parking facilities but when we look in to the competition they are not
looking for competition towards dollar shop they compete among other supermarkets.

Another is new chain of distribution customers prefer internet based home ordering system if NESTA
didn’t implement first the competitors may get the upper hand that is a big threat for the NESTA.
But overall the market have low threat of substitute