Example of Competition Mapping - Lithuanian Shop in Stratford
A competition map was constructed in order to gain a visual overview of potential competition facing “The Lithuanian Sunset” in the Stratford area and a bit beyond. The direct competition is indicated in red colour and indirect competition is outlined in green colour.
The direct competitors of “The Lithuanian Sunset” will be “The Brother’s Food Store” providing Lithuanian produce. The “The Brother’s Food Store” is located in the Stratford Inn Shops located in the East mall. The new premises of “The Lithuanian Sunset” are near the entrance of the Inn Shops, whereas “The Brother’s Food Store” is located inside the Inn Shops. “The Lithuanian Sunset” will operate as an oligopoly since its main competitor will be “The Brother’s Food Store”. “The Lithuanian Sunset” will have to achieve certain economies of scale through bulk buying in order to be able to compete on price with “The Brother’s Food Store”. However, bulk buying may well act as an opportunity cost to “The Lithuanian Sunset” since additional stock will require storage space, which in turn will lead to higher cash outflows and may make it harder for “The Lithuanian Sunset” to break-even. Additionally, the problem with stock is that it may ruin and the produce may go off soon which may conceivably have an effect on the image of “The Lithuanian Sunset”.
Whereas, an indirect competitor of “The Lithuanian Sunset” will be The “Costcutter” in Forest Gate which also provides a selection of Lithuanian and Russian food along with it’s other products. Although the “Costcutter” in Forest Gate will not affect “The Lithuanian Sunset”, it can still be viewed as competition that should be fended off since the “Costcutter” could decide to expand its range of Lithuanian produce given there is sufficient demand. Also, the infrastructure existing between the “Costcutter” and the premises of the “Lithuanian Sunset” poses a great problem as Romford Road connects Stratford with Forest Gate and people traveling through Forest Gate may decide to shop at the “Costcutter” instead of traveling all the way to Stratford, which would in turn make a Lithuanian shop in Stratford less feasible.
Overall, the competition map points to the fact that another Lithuanian store in Stratford is feasible. The lack of competition in the Stratford area and increasing immigration from Lithuania into U.K. is suggesting that another Lithuanian store is necessary to meet the growing demand since “The Brother’s Food Store” is already working at a full capacity but is yet unable to meet the needs of the growing Lithuanian market. In effect, the objectives of a new Lithuanian store may be more customer rather than competition oriented as “The Lithuanian Sunset” will not be competing with “The Brother’s Food Store” for the current market share, but rather aiming to satisfy the needs of the growing market.