Q1.
Huson Bay has used pricing and advertisements as a competitive advantage. The company was famous for offering huge discount deals at various times of the financial year. This attracted customers as they were willing to make impromptu and unplanned purchases. This was meant to take advantage of the drastically slashed prices. Furthermore, the department store capitalised on offering high quality goods at average pricing.
Q2.
Strong: Threat of new entrants. They threaten the company in the form of online retail outlets. These lower the attractiveness of physical retail outlets. Threat of substitution is also strong as other departmental stores offer stiff competition.
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Neutral: Supplier power and Buyer power affect Huson Bay and all its competitors equally. They do not give the company any undue competitive strength.
Weak: Competitive rivalry affects the businesses prospects though to a lesser extent. The narket is flooded with consumer goods similar to those being retailed by Huson Bay Company. The large number of retailers basically provides more competition but it does not adversely affect the business.
Q3.
When a competitive force is strong, it is better for business. It provides an advantage over the other businesses as this can be seen as edge. A strong force has the potential to adversely affect the profit margin and cash turn over.
Q4.
HBC was well positioned in the retail industry until it met fierce competition from the online retailers market. This is because the online market is better suited for the current lifestyle where consumers are busy and more oriented to online activity.
Q5.
HBC should consider a leveraged buy out. This will give a better chance for their real estate section to grow beyond mere sustainability. Furthermore, their real estate section is thriving and it requires additional capital investment to grow.
