Porters 5 forces on the Fashion industry
1. Rivalry amongst existing competitors.
The leading competitors in the fashion industry world wide according to research carries out by mbasKOOL.com is:
5. Gap, 4. Adidas, 3. Inditex, 2. Nike, and the leading competitor being 1.Christian Dior .
This is analysis looks at the sales, profits, assets and market value of each company and based on their individual success each company is ranked. As each of these companies begin to diversify from their initial product and target market competition intensifies between. For example Nike and Adidas are in direct competition with each other as both provide branded sports gear but each are beginning to move into producing less sport orientated clothing
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These characteristics, a complicated supply chain and wide availability of data make the industry a suitable avenue for an efficient supply chain. Also the fashion industry has been in a transition during the last 20 years: significant consolidation in retail, with most of the apparel manufacturing operations moving overseas and, in more recent times, increasing use of e-commerce in retail and wholesale trade. Historically, retailers have tried to exploit relationships with suppliers. Bargaining power of buyers is moderate because of the size and concentration of major retailers. To reduce power and you gain customers, retailers seek to differentiate products and to create stronger brands. Individual private customers have a low bargaining power in front of large retail chains, however, their power is greater for small retailers, who are far less organized. Having a contract with large retailers such as Christian Dior can make or break a small supplier. In the fashion industry, suppliers tend to have minute power. For example the Jewelry section of the fashion industry: There is increasingly larger number of competitors in the market, which has meant a larger supply of diamonds in the market. In the past, De Beers solved oversupply problems by collecting and storing them to be sold when deemed acceptable by them. This meant the supplier had immense power over the industry. By altering the market structure and pressure by anti-cartel laws, this power has decreased somewhat. De Beers now works more on reestablishing itself as the supplier of choice, and not only the supplier. The company has dealt with bans on stockpiling by lowering mining and leaving diamonds inside mines. There is also more time spent creating
Due to their huge success, control over suppliers can be always be maintained by the company. Rivalry among the competitors is the force to reckon with and it is the one that will decide the future profitability of the fashion industry. Competition in fashion is very high since there are only a handful of competitors when looking at the giants. Future Industry evolution Scenario 1 The future of today’s world is technology.
Porter’s Five Forces Porter’s Five Forces framework is to identify the level of competition within the industry and to determine the strengths or weaknesses which can utilise to strengthen the position. The framework consist of five elements: threat of entry, bargaining power of supplier, bargaining power of buyer, threat of substitutes and industry rivalry. Forces Analysis Implication Threat of new entrant Low Threat Diversified of product There are high demand of furniture and electrical appliance.
2.0 Competitor Analysis The industry that Under Armour is involved with is extremely competitive, with competing against big names such as Nike or Adidas. Although it’s hard at the beginning, but customers want to have the highest quality apparel therefore they turn to Under Armour. Under Armour stays in the competition by having high quality products, and also by signing endorsements deals with major athletes (Owusu, 2017). By having major athletes represent Under Armour, means the company will be bringing in "big money" because they will bring up the brand’s popularity. The major competitors in this industry are of course inclusive of big names such as Adidas, Nike, Dick’s Sporting Goods and Puma.
Each of the forces is determined how competitive in that industry as well as the structure of the industry. Porter’s five forces factors are consists of competitive rivalry, the threat of new entrants, the threat of substitutes, bargaining power from
The second case – controlling the market – is where the contrast between small firms and big business contrasts is most evident. The small firm lacks the capacity to influence prices, as both their market share and purchasing power are limited; however, big business possesses an abundance of both. Big business is able to exert their power by influencing prices because their decision to buy can be the difference between survival and failure for suppliers. Furthermore, Galbraith (1967, 30) suggests that the influence of size enables firms not only to control price but also quantity sold. Although Galbraith acknowledges that influence on demand is inexact; One should not discount its importance.
(Investopedia. 2015, December 08) Bargaining power of suppliers: Low There’s more than enough suppliers for Starbucks to choose from with relatively low switching cost. Starbucks is a major customer for most suppliers, which in turn lessens the bargaining power of the suppliers. Although Starbucks has the upperhand on negotiating with suppliers, they have not been taking advantage of their suppliers. Starbucks undertook a fair trade practice, coffee and farmer equity (C.A.F.E) program, which provides suppliers with a partnership with the coffee giants.
Products and Segmentation VF Corporation operates in five coalitions as listed below: 1) Outdoor & Action Sports, includes these brands: The North Face, Vans, Timberland, Kipling, Napapijri, Jansport, Reef, Smartwool, Eastpak, lucy, Eagle Creek. The largest brand in this coalition is The North Face. It features performance-based apparel, outerwear, sportswear, and footwear for men, women and children and its equipment line. 2) Jeanswear, includes these brands: Wrangler, Lee, Lee Casuals, Riders by Lee, Rustler, Timber Creek by Wrangler, Rock & Republic.
NIKE The Factors that Led to Success and Failure of Nike in its Venture across International Markets Abishek TR* Abstract- Key words: INTRODUCTION The largest American suppliers of athletic shoes, apparel, and sports equipments .At the same point of time ,this company is known worldwide .The Success of this company is the result of the various strategies used in the international market expansion which helped them to enter into new markets and to strengthen its position in the traditional ones .
SWOT Analysis - Strengths and Weakness of NIKE One of the strength of NIKE inc. is the strong brand image of the logo with the “Swoosh” or “Tick” to differentiate themselves from other sports wear brand. NIKE has been established since 1964 and over these years, the corporate instill the image of stylish, good quality and fashionable (Abhijeet 2016). Majority of the customer base is attracted by the good quality of the sports wear over the years. NIKE inc had successfully establish the well brand name with the products and services provided to the customers.
In the assignment, it will discuss the sports brand Nike which specifically focuses in Chinese market. There are three main content areas in this assignment. The first part is a macro environmental analysis; the next part is the target customer profile; the last part is the analysis of marketing strategies. Macro Environmental Analysis: Nike is a very well-known market leader. It is an international brand, their products are selling in the worldwide including China.
Porter’s five forces interact to shape the competitive landscape facing port authorities and port service providers. The 5 forces are stated below; 1. The rivalry among existing competitors 2. The threat of new competitors 3. The potential for global substitutes 4.
Pharmaceutical products require various types of organic chemical. There are a number of chemical suppliers present in the market. Instead of buying chemicals at the high cost, pharma companies can switch from one company to other. For specific APIs where the sourcing of raw materials is difficult, suppliers have a higher bargaining power but since most raw materials are easily available and suppliers are numerous, where one can easily replace the other, their bargaining power is low. " Bargaining power of buyer:
Competitors: PUMA, K-Swiss Inc., LaCrosse Footwear, Inc., Dick 's Sporting Goods, Inc., New Balance Athletic Shoe and Adidas – (Adidas have currently branched out into customization of footwear products. To sustain its competitive advantage over competitors, Nike has to take this to consideration). However, a large number of competitors in an industry usually indicates lots of demand for the products or services provided and this will help Nike to succeed in the long run. Suppliers: Nike outsources almost all of its footwear production to independent third party suppliers. As Nike has a minor control over quality of the products.
Simply put, Nike’s target market is mainly customers who have more concern for the quality and utility of the product than they have for the price at which the product is being sold. This helps to ensure that pricing never has to be adjusted downwards in attempts to woo in a larger number of customers. For any company to achieve success from the marketing strategies that it has put in place, it has to ensure that its strategy is flexible enough to keep up with the changing times and to also accommodate a large variety of customers. So as to do this, it is imperative that the products being produced by the company be innovative enough to exceed what is being provided by competitors in every possible way. Nike chose to take this into deep consideration and this resulted in it making a few changes on its marketing strategy.
Five Forces Analysis Threats of New Entrants - High The threat of new entrants for the bag industry is high since putting up a bag business is easy. There are a lot of different companies that are already in this kind of industry. There are international and local businesses that have successfully established their brands here in the Philippines. There is an increasing percentage of local brands here in the Philippines which indicates that the barriers to entry are low in the bag industry.