Determining Industry Attractiveness for ALMA: A Macro Level Analysis

This report provides a macro level analysis of industry attractiveness for ALMA, an online platform for buying groceries and general merchandise. It explores Porter's five forces model to determine the competitive forces in the online grocery industry. The report also discusses the threat of existing rivalry, threat of new entrants, bargaining power of suppliers and buyers, and the threat of substitutes. Additionally, it examines the macro industry test and the overall attractiveness of the industry for ALMA.

Attractiveness Industry

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
a) Macro level analysis...........................................................................................................3
b) The macro industry test......................................................................................................4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
In order to determine the attractiveness of an industry for starting a business in that
industry it is important that a macro level analysis is done of the business environment that can
help in determining the level of competition, favourable and unfavourable market conditions etc.
of an industry (Lang, 2016). In this report a macro level analysis of industry attractiveness for
ALMA which is an online platform that helps the customers in buying variety of grocery
products online will be done. Porter’s five forces model will be used for determining the
attractiveness of the industry in which ALMA will start its business.
MAIN BODY
a) Macro level analysis
Porter’s five forces model is a tool that can help in strategically identifying the
attractiveness of an industry by determining the intensity of competition so that the profitability
level of the industry for business can be known. ALMA is a new business start-up which will
provide its customers with the opportunity of ordering online their groceries and general
merchandise by partnering with all the small and large grocery stores. This will help the
customers in getting a variety of products by adding the items as per their requirements in their
cart and getting the items delivered at their doorsteps thereby increasing their convenience to
shopping. Following are the five competitive forces which work on AMLA in the online grocery
industry:
 Threat of existing rivalry: These are the competitors which are already present in market.
ALMA is an online retailer with no physical outlet that helps in providing its customers
with a variety of items by partnering with grocery stores so that convenience of shopping
can increase (Hwang and Lyu, 2018). The competition is gentle for ALMA as there not
many online stores who have partnered with different grocery stores to provide a variety
of products at single platform.
 Threat of new entrants: As the concept of ALMA is unique it will take time for the other
competitors to enter the market. Also ALMA is partnering with all the small and big
retailers which will help it in dealing with this threat and function smoothly in market.
 Bargaining power of suppliers: As the company is partnering with all the grocery stores
that are locally present which will give the company an availability of supply from a

variety of suppliers. This will reduce the bargaining power of suppliers which means they
cannot set terms and conditions for ALMA.
 Bargaining power of buyer: With the increase in use of technology and the busy lives of
people the concept of getting easy delivery of variety of products at the footsteps will
increase the convenience of customers and will also reduce their time they have to spend
in going from one store to other (Hermina and Saudi, 2020). It can therefore be said that
the bargaining power of customers is less which means they cannot set terms and
conditions for ALMA.
 Threat of substitutes: As the grocery stores like Tesco, ASDA, Lidl etc. have their own
online platforms and also they have the trust of their customers, the threat of substitutes
for ALMA is more as the customers can continue to purchase their products from these
stores.
b) The macro industry test
1) The industry in which ALMA will compete is the online retail industry in which the
grocery items and general merchandise items are sold online so that they can be made
available to customers at their doorsteps. ALMA is a new start-up business which is
partnering with all the local big and small grocery retail shops so that customers can be
made available with a variety of retail items on a single platform. This will help in easing
the shopping experience of customers and also they can order a variety of products at one
click (Wang and Scheinbaum, 2018).
2) Based on the Porter’s five forces model it can be said that the competition that is faced by
ALMA in the current market situation is low as it an innovative concept wherein all the
grocery stores will be linked through a single online platform. Also as the company is
trying to partner with all the big and small retail shops that are locally present it gives the
company a competitive advantage and makes the online retail industry for ALMA
attractive. Also with the increase in use of internet it becomes easy for companies to
reach to customers and increase their satisfaction by enhancing their shopping experience
3) The industry in which ALMA is starting its business is the online retail business where
the grocery stores that are present locally are linked together via online platform so that
customers can find a variety of products at a single platform. Also it will help in
increasing the convenience of shopping for customers thereby enhancing company sales

and its profits. Thus if the industry is a poor performer overall then also the company can
continue to successfully exist in market as it can has a USP which will allow it to sell a
variety of grocery items to its customers through one platform (Yang and Cai, 2016).
4) From the seven domains that are given by John Mullins, there are two domains that can
be checked so that the micro level industry assessment can be done which are target
segment benefits and attractiveness and the other is industry domain. ALMA is focusing
on the demographics of people belonging to age 14-60 years old who can use the online
platform, of company to purchase retail items. Also the company has various USP like
user friendly online platform, impeccable supply chain management and customer service
management that can help it in becoming successful in the long run (Kelchevskaya,
Chernenko and Popova, 2017).
CONCLUSION
From this report it can be said that it is important that the macro business environmental
factors and competition present in market is analysed so that the sustainability of business can be
determined. Also with the use of John Mullin’s seven domains the overall attractiveness of
industry can be known that can help business in being successful.

REFERENCES
Books and Journals
Lang, G., 2016. Macro Attractiveness and Micro Decisions in the Mutual Fund Industry.
Springer-Verlag Berlin An.
Hwang, J. and Lyu, S.O., 2018. Understanding first-class passengers' luxury value perceptions in
the US airline industry. Tourism Management Perspectives, 28, pp.29-40.
Hermina, N. and Saudi, M.H., 2020. Industry Attractiveness, Competitive Strategy and Company
Performance in the Internet Service Provider in Indonesia. International Journal of
Psychosocial Rehabilitation, 24(2).
Wang, S.W. and Scheinbaum, A.C., 2018. Enhancing brand credibility via celebrity
endorsement: Trustworthiness trumps attractiveness and expertise. Journal of Advertising
Research, 58(1), pp.16-32.
Yang, Z. and Cai, J., 2016. Do regional factors matter? Determinants of hotel industry
performance in China. Tourism Management, 52, pp.242-253.
Kelchevskaya, N., Chernenko, I. and Popova, E., 2017. The Impact of Corporate Social
Responsibility on the Investment Attractiveness of the Russian Companies. Economy of
region, 1(1), pp.157-169.