Porter's Five Forces Model

This project analyzes the fashion clothing industry using Porter's Five Forces Model, focusing on Marks & Spencer to illustrate the application of the model in a real-world scenario. It examines the threat of new entrants, the bargaining power of buyers and suppliers, the threat of substitute products, and the intensity of rivalry among existing competitors.

Porter’s Five Forces Model
Introduction
Porter’s five forces model is the best approach
or tool to determine the how competitive a given
market is, and consequently, how profitable it may be
for the other business. Present poster will be
explaining the fashion retail market analysis in order
to measure the value and level of industry
competition. For that, study will be taking Marks &
Spencer into action which is a multinational British
brand in clothing market industry.
Fashion clothing has been grown in highly rapid manner in the 21st
Century. In clothing industry competition is very high and dynamic
accordingly company has to meet out the customer needs. M&S can use
this model of analysis the level of competition and to understand how
the five competitive forces can affect the profitability and develop a
strategy for enhancing the competitive advantage for the company.
Competitive Rivalry: This is another force
that affect the company growth and profitability
market force. Rivalry among the existing players in
an industry is intense then it will drive down prices
and decrease the overall profitability of the
industry. The level of rivalry is very intense in the
fashion and clothing industry. M&S plc operates is
very competitive retail industry. This level of
competition does take toll on the overall long-term
profitability of the organization. In order to reduce
the level of rivalry competition from the market, by
building a sustainable differentiation that makes
good impact on the overall development growth.
Another reason and goals that affect the level of
competition is by building a sustainable
differentiation, by building scale so that it can
compete better. In order to build up the new
advanced technology growth and effective sour full
growth of the industry. In fashion clothing market
competition is very high, there various rival firm of
M&S such as Primark, H&M, Zara etc. for that,
company needs to build up their technology and
increased sales with percentage of online in total
retail sales growing steadily. Another way that
company could adopt is collaborating company
with competitors in order to increase the company
market size rather than competing for small market
growth. In other words, it helps to bring the new
management task and new development areas.
Bargaining power of Buyers: buyers are dynamic and demanding
a lot. They want clothes as per the current trend and season. In this
situation, bargaining power of buyers are high in terms of
negotiating in the prices. This situation put pressure on the retail
fashion industry and affect the overall profitability of the sector as
well. Buyers are also seeking high discounts and offers on the
products or services. In order to reduce the level of buyer’s power,
industry should need to enhance the large base of customers, in
order to gain the opportunity to firms to streamline its sales and
production process. Besides, industry should also need to offer new
product or innovation in order to gain customer attention. The
reason behind NPD is new products will help to reduce the
defection of existing customers to its competitors. Company also
need to maintained the quality of the product in order to gain the
customer attraction and reduce the switching cost and attract large
number of customer attraction.
Bargaining power of Supplier: In fashion clothing
industry this will help to recontinue the process and goals.
Companies buy their raw material from numerous suppliers,
in this state suppliers in at dominant position that decreases
the margins Marks and Spencer to earn in the market. Power
of suppliers is very high and impacting on the overall business
area and growth. In order to reduce the power of supplier’s
industry should need to build efficient supply chain with
multiple suppliers. On the other hand, company also need to
maintained the good relation with the suppliers to get the good
supply material other than competitors. This will help to
recontinue the process and goals to be make into appropriate
manner. This will make the long-lasting range of services and
growth to make the effective process and goals.
CONCLUSION
On the basis of overall poster presentation, it has been concluded that
how fashion clothing industry can gain competitive advantage and beat the
level of market pressure. Present study explained the five forces and
strategies to come over from the level of competition.
Threat of new entrants
One of the most important element of porter's
five force model is threat of new entrants. Threat of
new entrants in the retail market segment is very low
because of high capital investment in order to enter
into the market as well as to beat the firm like Marks
and Spencer. It is also very difficult for new entrants
to reduce the cost because it is not possible for them to
achieve economies of scale. Also new entrants does
not enter or tap the market because the customers are
very loyal towards the brand like Marks and Spencer
because of the quality of products provided by them as
well as its high reputation in the market. Apart from
that, the government rules and regulations regarding
the entry of new firm in retail market is not liberal and
include various kind of restrictions. Thus, the threat of
new entrants in the retail market is very low against
the company such as Marks and Spencer.
Threat of substitute products
Substitute product means that product which a
consumer may purchase because of its similarity in nature.
Threat of substitute products is very high because in the
clothing market the designs get easily copied and similar
designs with reduced prices can be produced or
manufactured easily and this in turn may have negative
effects on the sales or earning of the company. Though
Marks and Spencer have a huge investment in research and
development and undergoes continuous innovation in order
to maintain its brand image and be unique and creative so as
to maintain as well as to grow its market share but still the
threat of substitute products is very high and if the company
fails to bring innovation, it won’t be able to survive and
would be easily overtaken by the other substitute products.
REFERENCES
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Applying Porter's Five Forces Model. Indian Journal of Marketing. 49(1).
pp.25-35.
Fehér, I. and Németh, N., 2017. Analysis of the Situation and Competitiveness of
Hungarian Pasta Industry (based on Porter’s model). Volume of
Management, Enterprise and Benchmarking in the 21st century IV. pp.55-
65.
McNeill, L. and Moore, R., 2015. Sustainable fashion consumption and the fast