There are lots of excellent reports coming out at the moment focusing on the strategic issues facing businesses as they prepare for the new year. I was interested to pick up on one part of a report from Ipsos MORI which highlights the variation in levels of customer loyalty in different consumer markets.

A chart from this report is highlighted below and it generates some interesting comparisons that students might analyse as they consider the relative importance of customer loyalty as a barrier to entry:

According to the data, sectors such as grocery retailing and financial services enjoy much higher consumer loyalty than hotels, department stores or clothing retailers.

Why?

Hotels are listed at the bottom of the table, yet they are active in promoting use of customer loyalty schemes? To what extent does high customer loyalty present an insurmountable barrier to entry for a new entrant wanting to build a viable scale in a new market? * Is the best way to overcome entrenched customer loyalty to enter a market through acquisition?