Reference no: EM132148190
Provide a response to the discussion below. (Responses are thought-provoking, clearly supported, and further build a positive contribution to the discussion.)
Threat of new entrants
The threat of new entrants in The Vitamin Shoppe’s industry could be considered low. It would be extremely difficult for a new retailer to enter the market with the number of brands, recognition, and credibility that The Vitamin Shoppe and its competitors, such as GNC, have. In order to maintain this, The Vitamin Shoppe should continue to introduce new and innovative products and business practices and maintain its credibility within its industry and with its customers.
Threat of substitute products or services
One increasing threat that affects the Vitamin Shoppe is the trend towards natural-occurring remedies such as healthy eating. James Russo, Senior Vice President for Global Consumer Insights at Nielson suggested that this trend has included consumers focusing on the use of food as medicine. This, in turn, increases the demand for natural and organic foods (Gagliardi, 2015). This trend in consumer behavior means that more people are looking towards healthy and natural foods to supplement their bodies with necessary vitamins and minerals and are relying less on medicines and vitamins to do so. Clearly, this is a threat that affects The Vitamin Shoppe. To combat this, The Vitamin Shoppe should continue to introduce new products and take interest in the wants and needs of its consumers. For example, I think they could release a new line of products that promote usages as a booster in addition to a healthy diet.
Bargaining power of customers
The bargaining power of customers is high for The Vitamin Shoppe. For one, substitute products are available as mentioned above. There is also a lot of significant competition in the industry, such as other vitamin/health & wellness stores, grocery stores, etc., which gives customers options and thus, more power. In addition, there is virtually no switching costs for customers. It would take no effort for a customer to switch from shopping at The Vitamin Shoppe to GNC, for example. One way The Vitamin Shoppe works towards combating this high consumer power through their Healthy Awards Club, their buyer-incentive program that is free to participate in and results in free products when enough money is spent. This gives customers a reason to choose and continue to do business with The Vitamin Shoppe versus its competitors.
Bargaining power of suppliers
The Vitamin Shoppe’s bargaining power of suppliers could be considered low. Their website shows hundreds and hundreds of product brands that the company has available for its customers to purchase. With this, it could be assumed that they could easily drop one brand for another without much negative impact, should the supplier prices become too high, for example. The company also hosts its own private label, The Vitamin Shoppe. In addition, the company has recently teamed up with RangeMe. RangeMe is a service platform that the retailer and supplier interaction. Essentially, it makes it easier for retailers to find the right suppliers for the right merchandise at the right time. RangeMe CEO Nicky Jones has said that “by providing access to an incredible array of suppliers, we want to help The Vitamin Shoppe further their dedication to consumers and enhance their journey as a leading health and wellness retailer” (“The Vitamin Shoppe,” 2017, para. 4).
Intensity of competitive rivalry
Currently, The Vitamin Shoppe has a lot of competition, making this rivalry very high. As we have learned, The Vitamin Shoppe sells its products both in stores and online. With this, it results in the company not only competing against other specialty businesses in its industry, but also supermarkets, drugstores, e-commerce-only sites, and more. This makes its competitors businesses such as specialty stores GNC and Vitamin World, grocery stores/supermarkets such as Meijer, Kroger, and Walmart, pharmacies such as Rite Aid and CVS, and e-commerce-only sites such as Amazon. The Vitamin Shoppe can continue to combat its rivals by releasing new and innovative products as well as maintaining low prices and high customer value.
Value Chain
The Vitamin Shoppe’s website states, “We promise that our customers' health, safety, and peace of mind will always be our top priority. We will continue to strive for the highest quality standards in the dietary supplements industry. Our goal is to exceed our customers' expectations in product quality, service, and price, and consistently deliver pure, high-quality dietary supplements you can trust” (“Brand Quality,” n.d., para. 8). It is clear that the company understands the importance that quality has to its customers and plays in its business practices. The Vitamin Shoppe’s work with RangeMe ensures that the company can streamline its practices to get the right products and merchandise on its shelves for its customers. As mentioned earlier, the company offers hundreds of brands for its customers to choose from, making it easy for anyone to find exactly what they’re looking for. The Vitamin Shoppe makes it easy for its customers to shop. It offers the Healthy Awards Club (as mentioned above) as well as the opportunity to shop both in-store and online. In-store, the staff includes a variety of employees who are passionate about the company’s culture of health and wellness. Online, customers are greeted with the opportunity to chat with a Health Enthusiast (The Vitamin Shoppe’s salesforce, as I discussed in last week’s session). This makes it easy for consumers who are browsing online (without the help a physical store’s employees offer) to get answers to questions and assistance with their shopping. The Vitamin Shoppe’s goal is to provide its customers with the tools necessary to maintain their health and wellness for a lifetime.