Strategic Research On Local Convenience Chain Stores’ Responding To Foreign Competition

With China’s accession to the WTO, many foreign retail enterprises have begun to enter the Chinese market. Foreign retail giants like Wal-Mart, Carrefour, Trust-Mart, Lotus, Ito-Yokado and other formats are making great efforts to occupy markets in the form of hypermarkets. Our retail industry is facing huge pressures and challenges, many problems of our retail industry have been revealed in the competition with foreign enterprises, such as ignoring the brand building, lacking of professionals etc. Small retails are more likely to suffer in the fierce competition due to limited funds and small scale. From2004to the end of2005, more than150convenience stores across the country have collapsed one after another, which sounded a profound alarm to our small retail development.This thesis uses PEST model to analyze the competition environment of our retail industry from four aspects respectively. Steady economic development, great policy support, significantly improved technology and changes in consumer habits have created rare opportunity for convenience stores to grow. However, regional-based development of retail chains limit its scale expanding and brand awareness improving, and it is not conducive to achieving "going-out" goal of China’s retail industry. On the basis of potter’s Five Forces strategy, this thesis evaluates the competitive of Hongqi chain store and compare it with7-ELEVEN convenience store, results show that main defect of domestic convenience stores is lack of differentiation. Differentiation includes both service differentiation and commodity differentiation. Against existing problems in domestic convenience chain stores, it is suggested that scale expansion strategy, cost leadership strategy, private brand strategy and differentiation strategy be applied to cope with international competition and enhance the core competitive.