To gain competitive advantage and to emerge as world-class retailers Tyebjee suggests certain stratagems. Read on.

This is a strategy whereby a manufacturer forward integrates into the retail sector and establishes its own stores. These stores are dedicated to carrying primarily its own products and possibly a few complementary products of other suppliers. The core business of the branded manufacturer is making and marketing the products, and not its retail activities. Consequently, the core competencies for success are those associated with understanding the consumer's product needs and manufacturing such products which customers will value for the price that they pay, and building brand equity. An example of this strategy is the one pursued by Apple computer.

The second type of store brand strategy is what is more commonly referred to as a private label strategy. In this situation, the store's core business is that of being a retailer. As such, the competencies for success are those with being in the retail business, such as choice of location, merchandising and display of brands of multiple suppliers, and other factors associated with the consumer shopping experience.

The logic of a private label strategy is best understood by reviewing Michael Porter's well-known model of the five forces of competition. Michael Porter has made a compelling case for five forces of competition at play in all industries. The first is the traditional view of competition, namely the rivalry between players in the same business. So two supermarket chains in the same city are in natural competitive rivalry. A second type of competitive force is the threat of new entrants. When barriers to entry are low, the anticipation of new competition and the fear of attracting the same will often lead incumbents to keep their prices low, resulting in what economists call the entry deterring price.

strategy, competition, products, business, retail, manufacturer, private, competencies, stores, suppliers, consumer, customers, emerge, factors, merchandising, prices, sector, shopping, stratagems, compelling