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Threat of entry of large chain store to small hardware store

The owner of a small hardware store - the only one in a medium-sized town in the mountains - has just learned that a large home improvement chain plans to open a new store nearby. The owner knows you are studying marketing at Columbia Southern University and has asked for your advice on how to plan for this new competitive threat.

Explain the threat of a competitor entry.
Recommend an adjacent market competitive advantage to the owner.

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Solution Preview

The threat of a competitor entry which is a large home improvement chain can be influenced by the following factors which can act as barriers to entry:

- Economies of the scale which the present hardware store is enjoying may be lost to the competitor since it is a
large home improvement chain if the customers are divided among the two as the production will be affected.
- There may be huge cost ...

Solution Summary

The solution explains the factors that act as a threat of entry of a large chain store in the local market where the small hardware store operate and how this small hardware store can attain a competitive advantage to the owner of the store so that the small store is positioned differently and is able to compete the large chain stores.