Provide a response to the discussion below. (Responsesare thought-provoking, clearly supported, and further build apositive contribution to the discussion.)
Threat of new entrants
The threat of new entrants in The Vitamin Shoppe’s industrycould be considered low. It would be extremely difficult for a newretailer to enter the market with the number of brands,recognition, and credibility that The Vitamin Shoppe and itscompetitors, such as GNC, have. In order to maintain this, TheVitamin Shoppe should continue to introduce new and innovativeproducts and business practices and maintain its credibility withinits industry and with its customers.
Threat of substitute products or services
One increasing threat that affects the Vitamin Shoppe is thetrend towards natural-occurring remedies such as healthy eating.James Russo, Senior Vice President for Global Consumer Insights atNielson suggested that this trend has included consumers focusingon the use of food as medicine. This, in turn, increases the demandfor natural and organic foods (Gagliardi, 2015). This trend inconsumer behavior means that more people are looking towardshealthy and natural foods to supplement their bodies with necessaryvitamins and minerals and are relying less on medicines andvitamins to do so. Clearly, this is a threat that affects TheVitamin Shoppe. To combat this, The Vitamin Shoppe should continueto introduce new products and take interest in the wants and needsof its consumers. For example, I think they could release a newline of products that promote usages as a booster in addition to ahealthy diet.
Bargaining power of customers
The bargaining power of customers is high for The VitaminShoppe. For one, substitute products are available as mentionedabove. There is also a lot of significant competition in theindustry, such as other vitamin/health & wellness stores,grocery stores, etc., which gives customers options and thus, morepower. In addition, there is virtually no switching costs forcustomers. It would take no effort for a customer to switch fromshopping at The Vitamin Shoppe to GNC, for example. One way TheVitamin Shoppe works towards combating this high consumer powerthrough their Healthy Awards Club, their buyer-incentive programthat is free to participate in and results in free products whenenough money is spent. This gives customers a reason to choose andcontinue to do business with The Vitamin Shoppe versus itscompetitors.
Bargaining power of suppliers
The Vitamin Shoppe’s bargaining power of suppliers could beconsidered low. Their website shows hundreds and hundreds ofproduct brands that the company has available for its customers topurchase. With this, it could be assumed that they could easilydrop one brand for another without much negative impact, should thesupplier prices become too high, for example. The company alsohosts its own private label, The Vitamin Shoppe. In addition, thecompany has recently teamed up with RangeMe. RangeMe is a serviceplatform that the retailer and supplier interaction. Essentially,it makes it easier for retailers to find the right suppliers forthe right merchandise at the right time. RangeMe CEO Nicky Joneshas said that “by providing access to an incredible array ofsuppliers, we want to help The Vitamin Shoppe further theirdedication to consumers and enhance their journey as a leadinghealth and wellness retailer” (“The Vitamin Shoppe,” 2017, para.4).
Intensity of competitive rivalry
Currently, The Vitamin Shoppe has a lot of competition, makingthis rivalry very high. As we have learned, The Vitamin Shoppesells its products both in stores and online. With this, it resultsin the company not only competing against other specialtybusinesses in its industry, but also supermarkets, drugstores,e-commerce-only sites, and more. This makes its competitorsbusinesses such as specialty stores GNC and Vitamin World, grocerystores/supermarkets such as Meijer, Kroger, and Walmart, pharmaciessuch as Rite Aid and CVS, and e-commerce-only sites such as Amazon.The Vitamin Shoppe can continue to combat its rivals by releasingnew and innovative products as well as maintaining low prices andhigh customer value.
Value Chain
The Vitamin Shoppe’s website states, “We promise that ourcustomers' health, safety, and peace of mind will always be our toppriority. We will continue to strive for the highest qualitystandards in the dietary supplements industry. Our goal is toexceed our customers' expectations in product quality, service, andprice, and consistently deliver pure, high-quality dietarysupplements you can trust” (“Brand Quality,” n.d., para. 8). It isclear that the company understands the importance that quality hasto its customers and plays in its business practices. The VitaminShoppe’s work with RangeMe ensures that the company can streamlineits practices to get the right products and merchandise on itsshelves for its customers. As mentioned earlier, the company offershundreds of brands for its customers to choose from, making it easyfor anyone to find exactly what they’re looking for. The VitaminShoppe makes it easy for its customers to shop. It offers theHealthy Awards Club (as mentioned above) as well as the opportunityto shop both in-store and online. In-store, the staff includes avariety of employees who are passionate about the company’s cultureof health and wellness. Online, customers are greeted with theopportunity to chat with a Health Enthusiast (The Vitamin Shoppe’ssalesforce, as I discussed in last week’s session). This makes iteasy for consumers who are browsing online (without the help aphysical store’s employees offer) to get answers to questions andassistance with their shopping. The Vitamin Shoppe’s goal is toprovide its customers with the tools necessary to maintain theirhealth and wellness for a lifetime.
