The Supermarket and Grocery Store Industry’s External Environment

There are many external factors that affect a company and even an industry.  Whole Foods competes in the Supermarket and Grocery Stores Industry in the U.S. (44511).
In the Mind Map below, created using XMind, you can see the four external factors that influence this industry.  These environments are Technological, Political, Economic, and Socio-Cultural.

Political Environment

Monopoly

Monopoly (Photo credit: thatmushroom)

The factors I chose to discuss in this external environment include regulations to maintain a competitive playing field for all companies within the industry.  There have been many regulations set out by the government to ensure that monopolies do not exist within industries.  One of the regulations is the Sherman Antitrust Act which prohibits monopolies and monopolistic activities which would drive competitors out of the industry.

You do the scanning yourself and then pay by S...

You do the scanning yourself and then pay by Switch. Quite a novelty the first or second time you use it. I am easily pleased! (Photo credit: Wikipedia)

Technological Environment

There have been many technological advances within this industry.  One of the more recent advances is the introduction of self-checkout registers in grocery stores.  This gives people the opportunity to check themselves out at the grocery store instead of waiting in line for an employee to do it for them.  This eliminates the amount of people needed to run the register because by having four self-checkouts, you only need one person to run them all, eliminating about three employees.  This may be saving some money for the companies who have installed these checkouts.  Also, a customer may have a good experience in this location because they were able to purchase their items more quickly through the use of a self-checkout, so they may return to that store because of this experience.

Dollar

Dollar (Photo credit: Images_of_Money)

Economic Environment

The recession seems to have hurt many industries due to less shopping, but the Supermarket and Grocery Store industry did rather well.  People were making their meals at home rather than spending money each day on meals.  They were doing more grocery shopping and home preparation.  The only problem is, as the recession ends and the economy is stronger, people may shop in grocery stores less and eat out in restaurants more.

Sex or gender?

Sex or gender? (Photo credit: AJC1)

Socio-Cultural Environment

Gender and income play an important role in this industry.  Since women are a majority of the grocery shoppers, then the stores have to gear their marketing, promotions, and store set-up to what women would prefer.  Also, they need to determine where these middle income ($40,000+) reside and build their stores there, since this income level does a majority of the shopping in this industry.

 

 

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