Page 24 - [STUDY CASE_GROCERY WARS] Report

3. Threat of Substitute Products and Services
The threat of substitutes products of The CrownX is relatively high as

several rationales. Firstly, modern grocery retailing has still accounted
for a minority compared to the traditional one. It means that most
Vietnamese people still prefer shopping for groceries in markets and
independent stores to visiting retail chains or shopping groceries online.
Thus, modern retailers, in general, lose their competitive edge against

traditional ones in terms of price strategy. Secondly, concerning
substitutes services, various factors such as different modes of payment,
availability of home delivery service, etc. can also intensify the threats

from other retailers' substitutes to The CrownX.

4. Bargaining power of Customers

The CrownX’s buyers are expected to have high bargaining power
because of the easy availability of plenty of substitutes with better price

offerings, volumes purchased by the buyers, sensitivity towards the
pricing/cost-related factors, and unstable loyalty towards the brand.

5. Bargaining power of Suppliers
The CrownX’s suppliers are considered to have relatively low bargaining
power as it is a giant in the Vietnamese grocery retail industry.

Moreover, The CrownX also principally promotes its direct products
from the parent company - Masan. As a result, for sellers to get a space
in its store, they are more likely to give The CrownX a cut.

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