Wheel of Retailing

Definition: the Wheel of Retailing is a life cycle phenomenon in retail in which new shops or service providers typically start as a competitor on price of existing providers.
After a new formula has become successful, there is a tendency to increase the services offered and the quality ("upgrading"). But this leads to higher costs and eventually to higher prices.
As a result, the new formula gradually starts to look more and more like its earlier competitors.
This effect is strengthened by the typical reaction of the traditional contenders on a new price competitor: downgrading their services, simplifying their offer and lowering their prices.

More on the wheel of retailing.
More on pricing: By-Product Pricing, Cost-based Pricing, Dynamic Pricing, Personalized Pricing, Price Elasticity, more...

MBA Brief offers brief, yet very accurate definitions of MBA concepts, frameworks, methods and models. We keep it short and provide some links in case you'd like to learn more around a subject.