The Swedish oligopoly system that prevailed within the provision-industry has during the latest years subsided. The competition on the market has increased when new participants were given the opportunity to enter the Swedish market. Today the provision-industry is characterized by different foreign participants. Among these new participants one can find Lidl and Netto, who have entered the market enable to provide the Swedish people with an inexpensive range of products. In pace with the growing rivalry the benefits favor the consumers whom are being given several options to choose between. This gives the consumers a great power to control the companies whom are being forced to adjust to the prevailing situation. Due to the entries of new participators traditional companies such as ICA have compulsory lowered their price tags enable to not loose market shares.

The purpose with this essay is to obtain a view over how competitive a low-price-grocersstore is. To achieve the above an illustration of the current situation for low-price-grocerstores will be studied together with how they obtain competitive advantages. Further on we will try to locate which factors are essential when using a low-price-strategy.

Enable to answer the purpose of the essay we have chosen a selection of theories which have been connected to one and other. This gives us a tool to analyze the empirical material that has been collected.

The conclusion was that low-price-stores exist to a certain extent due to the stabile introduction stage that they posses. They start in a secure position and afterwards work hard in cost reduction. To assure the risk of being competed out the products they provide have to be cheaper than the ones the traditional stores offer. In hence the products have to posses the same quality as the traditional stores have if they want the costumers to choose them. An additional conclusion is that company’s image ought to be strong enable to sell their concept to the costumers. The costumers opinions of the company is farthest out important and consequently the company has to be prepared to defend them selves in any possible criticism.