1.

Threat of New Entrants

Threat of new entrants, in the case of Robinsons Retail Holdings Inc, is low given that the department store industry is a highly concentrated market at the top. Majority of those companies belonging to these industries have been around for many years and have efficiently maximized their supply chain and focus aggressively on merchandising. In addition, The cost of capital for these type of industries are high which would serve as a barrier for new entrants. Robinsons has been around for more than thirty years and their strategic positioning as well as other top companies makes it difficult for new entrants. in addition, Since the Philippines is a country having a unique geography that comprises over 7,000 islands, it is an advantage for a nationwide supermarket operator, such as Robinsons, to supply and replenish inventories in a timely manner. This poses a high barrier to potential new entrants. Therefore, retail operators with established distribution networks and strong relationships with supply partners, such as that of Robinsons, are expected to capture the growth opportunities.

2. Buyers Bargaining Power

Buyers in a retailing industry have moderate level of bargaining power. This can be attributed to high amount of discounts, promos or sales offered by different retail stores, which causes customers to have high mobility and low loyalty. In addition, products of these retail stores have a slight differentiation and are more standardized. Buyers can easily compare prices then switch from one store to another in order to reduce

their costs. The switching cost in retail industry is very low and the buyers can easily switch from one brand to another.

3. Suppliers Bargaining Power

The bargaining power of suppliers is fairly low. It should be noted that the suppliers are highly dependent on retailers and would dread losing their business contracts with large retailers such as Robinsons who is know to be second largest multichannel retailer in the Philippines. Hence, the position of the Robinsons is further strengthened and negotiations are positive in order to get the lowest possible price from the suppliers.

4. Threat of Substitutes

Threat of Substitutes in a retailing industry is high since substitutes are easy to find. The tendency in retail is not to specialize in one good or service, but to deal in a wide range of products and services which can be bought in many different places, This means that what one store offers you will likely find at another store such as in supermarket, convenience stores, drug stores, individiual brand outlets, or flea market. In addition, Given the economic condition in the Philippines, customers will be inclined towards discounted prices, the speciality shops, "Tiangge" retail or thrift shops which offers products of at a much cheaper cost.

5. Competitive Rivalry

The retail industry in the Philippines is highly competitive. "The intensity of the competition in the Philippine retail industry varies from region to region, but is mostly concentrated on Metro Manila which is considered to be the most competitive market in the Philippines. Competitors in Metro Manila have opened a large number of new retail stores. resulting in reduced demand, sales volumes and earnings.. Robinson Retail

compete principally with national and international operators of retail chains in the Philippines, such as SM Investments, Puregold Price Club Inc., Rustans, Ace Hardware, Mercury Drug Corporation, 7-Eleven, Family Mart and Bench Group, among others." (Maybank 2013 Page 49) . In addition, each of these existing competitors competes on the basis of product selection, product quality, acquisition or development of new brands, customer service, price, store location or a combination of these factors. Accordingly, the competitive pressures, specifically those arising in connection with the expansion

strategy, causes negative impact on financial condition and results of operations.