Changes in the general external environment may have different effects on different industries, as pointed out in Chapter 3. The U. S. Retail Grocery Industry is one of the largest industries in the U. S. There are over 38,000 retail grocery outlets. Americans spend over $675 billion a year on grocery items.
The Retail Grocery Industry is very competitive, as there are many different places where we can purchase grocery items. As a result, there is a lot of price competition in the Industry, which drives down prices and profits. Compared to the Apple iPhone with a 35-40% profit margin, the typical profit margin on groceries is only 1-2%.
For companies in the Retail Grocery Industry, many changes in the General External Environment affect them. Grocers, therefore, must be continually aware of what is changing in the General External Environment, evaluate the changes to determine how their business is affected, and then respond appropriately to maintain their customers and their profitability.
For the Retail Grocery Industry, identify major changes occurring today in each category of the General External Environment (Sociocultural, Economic, Technology, and Political/Legal) that affect the grocery retail Industry.
Identify how the Industry is affected by each Change. Is the Change a Threat or an Opportunity to the Industry? Explain why.
Explain what you would do if you were a manager in the Retail Grocery industry to minimize the Threats (negative changes).
Explain what you would do if you were in the Retail Grocery industry to take advantage of any Opportunities (positive changes).