Analysis of the UK Fashion Industry and Market Dynamics

This essay provides a detailed analysis of the UK fashion industry, focusing on its market size, structure, and competitive landscape. It begins with an introduction to the fashion sector's significance in the UK economy, highlighting its contribution to GDP and employment. The essay then delves into the market size and structure, discussing industry trends and the impact of online retail. A key component is the application of Porter's Five Forces model to assess competition, examining the threat of new entrants, the bargaining power of buyers and suppliers, the threat of substitution, and competitive rivalry. The analysis uses Marks & Spencer as a case study, evaluating its position within the industry based on the Porter's Five Forces framework. The conclusion summarizes the findings, emphasizing the developed nature of the fashion sector and the effects of globalization and opportunities. The essay also discusses the company's strategies to maintain its top position in the fashion sector of the country. This analysis offers insights into the dynamics of the UK fashion market, its competitive forces, and the strategies employed by leading companies.

BUSINESS ESSENTIALS
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TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................3
Essay ...............................................................................................................................................3
Market size and structure if fashion sector..................................................................................4
Porter's five forces analysis of Fashion sector ...........................................................................5
Conclusion.......................................................................................................................................7
References........................................................................................................................................9
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INTRODUCTION
Fashion sector is one of the most developed sector in world. Globalization has
penetrated largely the mind of individuals. Fashion show are more consumer towards
fashion sector. Fashion industry is on of the most developed sector in UK. People are
getting attracted to fashion due to variety of fashion companies present in this sector.
Present report describes about UK's fashion sectors and its companies which are on
top. The report analysis competition in the fashion industry of the country. Porters five
forces model have been use to determine the existing competition and strategies used
by company to reduce this. Market size of fashion industry and structure has also been
explained. Report illustrates about the analysis of fashion industry and it impact on
customers. Choice of people has become significant when its comes to fashion. Study
also illustrates about M & S company and its strategies used by it to remain ta top of the
fashion sector of the country. Further ore it explains about the power of buyers and
suppliers on the market of fashion. New entrant threat and competitive rivalry in fashion
sector is also explained using porters five forces model.
ESSAY
Fashion industry of UK is growing at a faster rate and it is offering opportunities
for gaining success and hug profitability. Clothing business is the biggest business of
the country (Turker and Altuntas, 2014). Fashion industry is providing large employment
to population of UK. In 2015 Fashion sector has contributed £28 billion to the economy
of country. This contribution is approx 2.3 % of the GDP of country. Market share of
fashion industry is 6 % in the market of UK. Its market value is 66 billion pound and it is
providing employment to youth in fashion related sectors. Approximately 414000 people
are employed in retail fashion sector of the country. It is predicted that fashion industry
will grow by 27 % in 2020. Fashion is the most important part of humans life because it
is the way to define themselves in front of others. Recent studies suggest that fashion
industry is attempting various innovations in order to gain more profit. Consumers of the
country spends more on fashion and it is expected that it will increase by 15% by the
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year 2020. one of the major fashion retail company Mark and Spencer has reported
growth of 20.3% on annual basis. This growth is the result of high spending of
consumer in fashion (Pedersen and Gwozdz, 2014). This sector is also contributing
indirectly towards economy by providing jobs to people who are less educated an are
unable to find jobs. Approx 3.5% of total workforce of country works in fashion retail
sector. This data provide significance of industry in economy development of country.
The fashion sector is adding towards the taxation system of the country. This
contribution specifically come from VAT and tax applied on clothes and apparel come
from 68% people of the country buy fashion clothes online. This sector includes retail
market, fashion designers, various firms and organizations which are involved in making
fashion apparels fro people.
Market size and structure if fashion sector
Market size of fashion sector is huge and some data and statistics about the it
size and structure is as follows:
Industry analysis and trends: Though the fashion sector has large contribution in the
economy of country but still prices of clothing has fallen due to high competition in the
global market. Increasing rate of raw materials ned for sector is affecting the revenue
growth (Macchion and et.al, 2015). Internet evolution ha prompted most of the retailers
to bring their business online. Online shopping is helping retailer sin increasing their
profit and revenue.
Industry report: Clothing industry is having very less hurdles to enter in global market.
Competition in market is high among fashion retail sector , due to that there are many
barriers for any company to get success (Battaglia and et.al, 2014). In UK capital
requirement to open new store is very low in comparison to other countries.
Selected organisation: Mark and Spencer is leading organisation that is working in
UK's fashion industry. M&S is the largest fashion retail company in the country. It
provides clothes , home luxury products. It is a multinational retail company of the
country. Here is the porters five forces analysis of fashion sector and M& S
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Porter's five forces analysis of Fashion sector
Porters five forces model is an approach used to identify the competition in the
market. It determines consequences for any business as well as how profitable it would
be for company. Its has five factors which are as follows:
Threat of new entrants: In fashion industry new entrants threat is little less as compare
to other sectors. This is because market of UK now a days is filled with bigger brands
like Marks and Spencer's. Furthermore cost and capital requirement to enter into this
industry is restricting other companies from entering. However to enter in market new
entrants can use unique ways to publicize their product such as use of social media and
use of novel brands. Fashion market is mature in UK and it requires something new that
is attractive and capable of adding in growth of economy. All the retailer present in the
industry has popular brand name and strong customer loyalty (Hoskins, 2014). To enter
in market experience and knowledge is must for nay company . Due to less experience
and knowledge in this sector it is difficult for them to enter. It implies that it is difficult for
any new entrant to challenge M&S in the industry. Customer loyalty towards the brand
M&S is very high so it is difficult for many company to replace this brand in the industry.
Bargaining power of buyers: This is the most important factor which can challenge
the retailer of fashion industry. Buyer power in this industry is very high which can lower
down prices of products. Cloth buyers in this rector have various options availability and
they can switch easily from one brand to another. Buyers have many alternatives to
shop any buy apparels for them. Large number of competitor are present in market and
they can easily gain customer attraction by offering apparel at lower rates than other.
Present competitor in market of UK has high popularity and making products according
to the need of consumers (Scuotto and et.al, 2017.). This gives plenty of choices to
consumers. So bargaining power of customers is relatively high in UK. Markets major
retailer like Mark and Spencer are trying to provide product which meets the need and
expected price of consumers. Companies are using tactics to promote their brand by
using celebrity promotion technique. This is helping fashion retailer to gain more
customer attraction and loyalty. Buyer concentration is high as they shop according to
their tastes and spending power.
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Supplier’s bargaining power: Suppliers power in the fashion sector is relatively low
and can be considered as insignificant. All fashion retail companies get raw materials
from third parties manufacturers and this is the reason behind low bargaining power of
suppliers. There is no control of suppliers in this sector and they can be easily replaced
in the industry. It can be concluded that input from another sources in this sector is
low. On the other hand suppliers have high power of bargaining when there is scarcity
of raw materials in the industry. It increases when suppliers of specific product are
limited in industry (Kozlowski, Searcy and Bardecki, 2016). Fashion market of UK have
suppliers who charges cost for providing raw materials. Traditional practices are used
by suppliers which is increasing cost of materials. This evaluates that suppliers have
high bargaining power in certain conditions. In case of Marks and Spencer's supplier
power is relatively low. Suppliers are trying to reach retailers to get their goods and raw
material into their shelves. The company do not rely on suppliers as it believe in selling
its own brand. M& S is buys raw materials rather then completes product .
Substitution Threat: In fashion industry substitution threat is almost negligible. This
threat is generally to those product and services which have high probability of getting
replaced. Firms in fashion industry are providing products at lower prices due to which
there is no possibility of replacement. Fashion products are replaceable only by product
provided by other retailing firms (Kant Hvass, 2014.). If other retailing firm in industry
produces product at lower prices than consumer tends to switch from one brand to
another. It can be conclude that Marks and Spencer's do not posse substitution threat
from existing companies present in the UK's market.
Competition from existing companies: Fashion industry of UK has large number of
rivalry companies whose brand image is strong enough to attract consumers. Presence
of large number of retail firm who sell look alike product to gain customers towards
them. Innovation also plays important role in competitive rivalry. Fashion market is filled
with similar products and its is easily confusing consumers. Competition is fierce in the
fashion sector. Marks and Spencer's is trying hard to differentiate itself from other
companies by producing product which are unique and posses quality (Cagliano and
et.al, 2014,). Leaders in market are making policies that will help them to acquire
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attention of consumers. High level of competition is making pressure on fashion
retailers to move towards other countries. This illustrates that competition level is high in
fashion sector of UK and one company cannot easily survive in this fierce competition.
High competition is not a good sign for fashion retailers.
From the analysis of Porter five forces it has been found that Marks and
Spencer's is a leading company in UK's fashion sector. Fashion industry of UK has
many companies like Next, Primark, Arcadia, Marks and Spencer's , George etc.
amongst all of these fashion retailers M & S is at the top position because of several
factors found in its porters five forces analysis. The company has low threat of
substitution because it has high customer loyalty an attraction. Consumer loyalty is
helping company from getting substituted by other rivalry company brand popularity of
the retail company is also high due to which less number of consumer switches to
other brand. New entrant fear is also very le for the M&S as company invest huge
capital only in successful chain supply. Other existing brad names are not that strong
enough to attracts its consumer towards them. Suppliers power to replace M & S is
relatively low which make company strongest among others. The firm is not dependent
on any supplier to provide raw material to it as in case of other companies. The
company makes unique and authentic product which helps in attaining loyalty of buyers
and consumer. So these are some reasons which makes Marks and Spencer's to
remain at top position in fashion sector of UK.
CONCLUSION
On the basis of the above report fashion industry can be considered as
developed sector. And effect of globalization can be easily identified. This sector offers
opportunities as well as probability. Market size of the fashion sector is considerably
huge as compared to other sector. The structure and size of sector can be analysed by
analysing industry and trend, on the basis of industry report and selecting organization.
Along with this five force model is also considered in to the given report on the basis of
which competition identification and consequence determination takes place on the
basis of market. Under the five force analysis approaches that are used are
identification of new entrant threats takes places after this next important challenge in
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this sector is bargaining done by buyers, where buyer lower down the price of the items
due which retailers face huge loss. Along with this supplier’s bargaining is also a big
challenge I this sector. In the fourth challenge issue of substitution threats arises due to
which firs are providing products at lower prices. And at the last challenge of this sector
is competition among different companies. Due to which the quality of product get
affected and ultimately customers suffer.
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REFERENCES
Books and Journals
Battaglia, M. and et.al, 2014. Corporate social responsibility and competitiveness within
SMEs of the fashion industry: Evidence from Italy and France.Sustainability. 6(2).
pp.872-893.
Cagliano, A.C. and et.al 2014, September. Logistics Performance Measurement for
Sustainability in the Fast Fashion Industry. InHICL (Hamburg International Conference
of Logistics), Next Generation Supply Chains-Trends and Opportunities. Hamburg,
epubli GmbH(pp. 113-135).
Hoskins, T.E., 2014.Stitched up: The anti-capitalist book of fashion. London: Pluto
Press.
Kant Hvass, K., 2014. Post-retail responsibility of garments–a fashion industry
perspective.Journal of Fashion Marketing and Management. 18(4). pp.413-430.
Kozlowski, A., Searcy, C. and Bardecki, M., 2016. Innovation for a Sustainable Fashion
Industry: A Design Focused Approach Toward the Development of New Business
Models. In Green Fashion(pp. 151-169). Springer Singapore.
Macchion, L.and et.al, 2015. Production and supply network strategies within the
fashion industry.International Journal of Production Economics. 163. pp.173-188.
Pedersen, E. R .G. and Gwozdz, W., 2014. From resistance to opportunity-seeking:
Strategic responses to institutional pressures for corporate social responsibility in the
Nordic fashion industry.Journal of business ethics. 119(2). pp.245-264.
Scuotto, V. and et.al, 2017. The performance implications of leveraging internal
innovation through social media networks: An empirical verification of the smart fashion
industry.Technological Forecasting and Social Change.
Turker, D. and Altuntas, C., 2014. Sustainable supply chain management in the fast
fashion industry: An analysis of corporate reports.European Management Journal. 32.
(5), pp.837-849.
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