Porter’s Five Forces Model Assignment
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Added on 2020-12-29
Porter’s Five Forces Model Assignment
Added on 2020-12-29
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Porter’s Five Forces ModelCONCLUSIONOn the basis of overall poster presentation, it has been concluded thathow fashion clothing industry can gain competitive advantage and beat thelevel of market pressure. Present study explained the five forces andstrategies to come over from the level of competition. REFERENCESAbalkhail, T. S., 2019. Entry and Expansion Strategies for Burberry in Oman byApplying 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 ofHungarian Pasta Industry (based on Porter’s model).Volume ofManagement, Enterprise and Benchmarking in the 21st century IV. pp.55-65.McNeill, L. and Moore, R., 2015. Sustainable fashion consumption and the fastThreat of substitute productsSubstitute product means that product which aconsumer may purchase because of its similarity in nature.Threat of substitute products is very high because in theclothing market the designs get easily copied and similardesigns with reduced prices can be produced ormanufactured easily and this in turn may have negativeeffects on the sales or earning of the company. ThoughMarks and Spencer have a huge investment in research anddevelopment and undergoes continuous innovation in orderto maintain its brand image and be unique and creative so asto maintain as well as to grow its market share but still thethreat of substitute products is very high and if the companyfails to bring innovation, it won’t be able to survive andwould be easily overtaken by the other substitute products.Threat of new entrantsOne of the most important element of porter'sfive force model is threat of new entrants. Threat ofnew entrants in the retail market segment is very lowbecause of high capital investment in order to enterinto the market as well as to beat the firm like Marksand Spencer. It is also very difficult for new entrantsto reduce the cost because it is not possible for them toachieve economies of scale. Also new entrants doesnot enter or tap the market because the customers arevery loyal towards the brand like Marks and Spencerbecause of the quality of products provided by them aswell as its high reputation in the market. Apart fromthat, the government rules and regulations regardingthe entry of new firm in retail market is not liberal andinclude various kind of restrictions. Thus, the threat ofnew entrants in the retail market is very low againstthe company such as Marks and Spencer.Bargaining power of Supplier: In fashion clothingindustry 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 decreasesthe margins Marks and Spencer to earn in the market. Powerof suppliers is very high and impacting on the overall businessarea and growth. In order to reduce the power of supplier’sindustry should need to build efficient supply chain withmultiple suppliers. On the other hand, company also need tomaintained the good relation with the suppliers to get the goodsupply material other than competitors. This will help torecontinue the process and goals to be make into appropriatemanner. This will make the long-lasting range of services andgrowth to make the effective process and goals. Fashion clothing has been grown in highly rapid manner in the 21stCentury. In clothing industry competition is very high and dynamicaccordingly company has to meet out the customer needs. M&S can usethis model of analysis the level of competition and to understand howthe five competitive forces can affect the profitability and develop astrategy for enhancing the competitive advantage for the company.Bargaining power of Buyers: buyers are dynamic and demandinga lot. They want clothes as per the current trend and season. In thissituation, bargaining power of buyers are high in terms ofnegotiating in the prices. This situation put pressure on the retailfashion industry and affect the overall profitability of the sector aswell. Buyers are also seeking high discounts and offers on theproducts or services. In order to reduce the level of buyer’s power,industry should need to enhance the large base of customers, inorder to gain the opportunity to firms to streamline its sales andproduction process. Besides, industry should also need to offer newproduct or innovation in order to gain customer attention. Thereason behind NPD is new products will help to reduce thedefection of existing customers to its competitors. Company alsoneed to maintained the quality of the product in order to gain thecustomer attraction and reduce the switching cost and attract largenumber of customer attraction. Competitive Rivalry: This is another forcethat affect the company growth and profitabilitymarket force. Rivalry among the existing players inan industry is intense then it will drive down pricesand decrease the overall profitability of theindustry. The level of rivalry is very intense in thefashion and clothing industry. M&S plc operates isvery competitive retail industry. This level ofcompetition does take toll on the overall long-termprofitability of the organization. In order to reducethe level of rivalry competition from the market, bybuilding a sustainable differentiation that makesgood impact on the overall development growth.Another reason and goals that affect the level ofcompetition is by building a sustainabledifferentiation, by building scale so that it cancompete better. In order to build up the newadvanced technology growth and effective sour fullgrowth of the industry. In fashion clothing marketcompetition is very high, there various rival firm ofM&S such as Primark, H&M, Zara etc. for that,company needs to build up their technology andincreased sales with percentage of online in totalretail sales growing steadily. Another way thatcompany could adopt is collaborating companywith competitors in order to increase the companymarket size rather than competing for small marketgrowth. In other words, it helps to bring the newmanagement task and new development areas.IntroductionPorter’s five forces model is the best approachor tool to determine the how competitive a givenmarket is, and consequently, how profitable it may befor the other business. Present poster will beexplaining the fashion retail market analysis in orderto measure the value and level of industrycompetition. For that, study will be taking Marks &Spencer into action which is a multinational Britishbrand in clothing market industry.
Business Strategy (P3)
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