Billa Cr Is Part of Rewe International Ag. It Has Been Operating in the Czech Market Since 1990 and Is a Leader in the Supermarket Market.

BILLA CR is part of REWE International AG. It has been operating in the Czech market since 1990 and is a leader in the supermarket market.

23. Perform analysis of "Porter's 5 forces analysis"

Porter’s five forces analysis is set of business tools for analyzing situations and helping companies to improve their competitive positions. Porter's five forces analysis looks at where the power lies in a competitive situation. Porter's five forces analysis is designed to help financial professionals and other managers explore how the following five forces determine the balance of power in a situation: supplier power, buyer power, competitive rivalry, threat of substitution and threat of new entry.

1. Intensity of competitive rivalry

The most important threat to companies is the current competitors in the industry, which directly threaten the development of the company. The local retail competition in Prague is very competitive. There are many famous foreign supermarkets in the Czech Republic, for example, Lidl supermarket, Kaufland supermarket, Tesco supermarket, Penny supermarket... Tesco is the third largest supermarket group in the world. At the same time, it has to face the competition of Czech own brand supermarkets, Albert supermarket is a strong competitor. Competition among competitors in the industry is fierce, and often at the expense of corporate profits, consumers are beaten by fighting various price wars. The interests of competing enterprises in the same industry are interrelated. The competitive strategic goal of enterprises in the industry is to have the advantages that competitors do not have. Due to the limitations of the existing market, it is easy to cause conflicts in the implementation of the strategy. Competition among internal companies often takes advantage of price wars, push advertising and improved after-sales services. In the promotion, Bill focused on fresh food, so Billa is more supportive of Czech producers, and Czech local foods dominate most of its products. At the same time, Billa will directly discount 50% of the items that are about to expire or the fruits and vegetables that don't look good!

2. Threat of new entrants

The retail industry is an industry with a relatively low barrier to entry, but it is very difficult to achieve scale and achieve a certain range of chain operations. For supermarket chains, the number of stores is a necessary condition for success in a new market. This requires a large amount of funds. Therefore, the barriers to entry in the supermarket chain are very high. At the same time, most retail companies have already started operations in the Czech Republic. So the potential competitors are not a big threat to Billa.

3. Bargaining power of suppliers

Like most supermarkets, Billa also uses a central procurement system to try to implement uniform purchases. Billa has a procurement contract for many well-known branded products. The volume of purchases is quite large, and suppliers do not want to lose this huge market, so the ability to negotiate with suppliers is great. At the same time, there are many brands that are also part of Billa, for example: Billa – Vocílka, Naše bio, Billa značka, Billa Premium, Billa Easy, Clever a Česká farma. The price of the purchase price is the lowest and the cost advantage is obvious.

4. Bargaining power of Buyers

The price of the