OF THE FOOD AND DRUG RETAIL INDUSTRY
             It is extremely important to understand what the dominant economic factors are in an industry in which you are participating. These factors have a very strong influence in determining the corporate strategies that a company will decide to implement. How can a corporation define and implement their corporate strategy without understanding the environment of the market they are in? They simply can not! The economic factors to be considered are as follows: market size, scope of competitive rivalry, market growth rate, number of rivals, number of customers, degree of vertical integration, economies of scales, resource requirements for market entry, and profitability of the industry. Each one of these factors will be defined in the following paragraphs.
             The supermarket retail market is a $363 billion industry(sales 2000). Approximately $272 billion in sales, or 75%, is achieved by 25 companies with 16,000 stores. The total number of retail grocery stores total 127,000. It is obvious that the market share is dominated by a select few corporations. The largest company is Kroger (11% market share), followed closely by Albertson's(9%), Safeway(6%), and Winn-Dixie(4%). See appendix A for the latest sales figures of the top 25 retail grocery industry. The drug store retail market is approximately a $146 billion industry.
             The scope of competitive rivalry is intense. The competition among the top 25 retail stores is aggressive at the regional and national level. For example, Kroger operates in 46 major markets and has held the number (1) or (2) position in 40 of these markets. The top (5) major markets are Los Angeles, Atlanta, Seatle, Houston, and Phoenix. Each of these corporations have areas where they are more prevalent in certain regions of the country. For example, Safeway is predominately in the western part of the United States. As stated above, the top 25 companies capture 7...