maf 640 - the rich case study

Discuss the impact of the intensity of rivalry and bargaining power of buyers on The Rich when Niksim entered the retail industry in Putrajaya’s commercial area. Intensity of rivalry occurs when there is an action and respond made by the firm in the industries. In The Rich case, Niksim was the competitor that just has move to the area. Even so they are the new retail outlet in that area but they have their own strengths that can stick the customers’ eyes towards their product. Their strengths can be seen through their price, customer trust and also the quality of the product. All of this strength is the threats towards The Rich. One of the threats is that Niksim has offered lower price than The Rich that offer at a premium price. This is aligning with their tagline as “Be Unique, Pay Less”. As the economy become slowdown, customer will consider the price of the product. They still can have their own design and the uniqueness while enjoying lower price. Other than that, Niksim also have the power in build the customer trust since they already have 36 retail stores all over the world and promote their product on the internet. This would help the customer to have the confidently and trustworthy while using their product. On the top of that, quality also is the issue in choosing the right store. The Rich can provide their customer by serve them with the personal Concierge Services which the qualities of the output cannot be deny. But there will still a high charge towards the output while if in the Niksim, the customer can do their shopping without any other personal services for their own uniqueness but in the same qualities. Niksim doesn’t need the personal services as The Rich since them already has a wide network that can offer more unique designer-label consumer product which will charge them at a discounted price.
The intensity of rivalry would greatly impact the competitiveness of The Rich as their offered the same product to the customers. Both of them