Comprehensive Strategic Analysis of Value Village: Clothing Industry

This report provides a comprehensive strategic analysis of Value Village within the second-hand clothing industry. It includes an external analysis using PEST (Political, Economic, Social, Technological) factors, assessing governmental regulations, economic impacts such as thrift store industry size and employment rates, social trends promoting recycling, and technological advancements. Porter's Five Forces analysis examines the threat of new entrants, bargaining power of buyers and suppliers, the threat of substitutes, and competitive rivalry. The analysis further explores industry growth, demand and supply dynamics, recent developments, competitiveness, investment considerations, and resource utilization within the second-hand clothing sector. The report references various sources to support its findings, providing a detailed overview of the strategic landscape for Value Village.

Strategic analysis

Strategic Analysis 1
External Analysis
PEST
Political
 The government promoted the
domestic production of textile to
protect its cotton industry from
competition. Due to which the
demand of industry is decreases
(Rastogi, Trivedi, 2016)
Economic
 Recession affects the economy due to
which the demand of industry is high
as the people are not willing to invest
on new and expensive clothes.
 Labour rate is not affected the SHC
industry.
Social
Second hand clothing industry is the right
industry in order to reduce the global
warming.
The consumer prefers affects the demand of
SHC industry.
Technological
 Advance technology reduce the cost
of clothes and also helps to eliminate
the defects from the second hand
clothes so that the industry can
provide the quality of services to
consumer.
 Many technology industries are
established in America
Porters Five Forces
The threat of new entrants
 Low level of threat
 The less amount of invest is required
Bargaining Power of buyers
 Moderate bargaining of buyers
 There are various number of buyers

Strategic Analysis 2
to enter the market but the industry
gain the less profit $24billion as
compare to the clothing industry
(Burns, Dewhurst J, 2016)
who lives beyond under the poverty
line that is why the consumers like to
bought the less expensive clothes.
Bargaining Power of Suppliers
 Moderate bargaining power of
suppliers
 The suppliers of the industry are the
people who believe in donating the
clothes to consumers.
 There are large number of people and
the most of people are educated due
to which they believes in donate the
clothes that helps the industry to
supply the large number of clothes to
the poor people or establishing the
SHC market.
 Suppliers provide the clothes in free
(Value Village, 2018)
The threat of competitors
 Low level of threat
 Less number of companies enter the
market of the same industry
 More demand and less supply of
services
The threat of substitute
 Low level of threat
 Most services of the industry is free
 It is difficult for the other industries to provide the services in free

Strategic Analysis 3
 It is not an easy task to substitute and have the good reputation
Industry Analysis
Industry Growth
It has been seen that the second hand clothes are the part of EAC sensitive list and
they attract a CET rate of 35 per cent or $0.20 per kg. In Africa, the EAC is the biggest
importers of SHC. The industry is continuously growing in the every country with the high
rate as the imports of clothes are increases. The USA is ranked in the number one position in
terms of percentage in the world with the 19.5%.

Strategic Analysis 4
(Source: Geneva, 2019)
It is observed that the second hand clothing have high share in importing the clothes
in the year 2015. The Eastern Africa Community import SHC to per person and it is increases
with the high rate such as:
(Source: Geneva, 2019)

Strategic Analysis 5
Earlier, the second hand clothes were considered as the low class clothes and they
provided in charity to the organisations. However, the things changed due to which the
second hand market has been established for resale the clothes in the United States. It is
growing with worth of $24billion and it expected to reach at the $51 billion (Fortune, 2018).
Demand and Supply
As per the research, the clothes are produces where the income low and willing of
consumption is high. Most of the textiles come from Asia and it exported to Europe or the
USA. Nowadays, the new clothes cannot be affordable by the people who are living under the
low incomes countries such as African, East Europe the second hand clothing business
continues to grow (BBC, 2018). Employment could increases in the textile industry due to
which the demand of the product is increases. The domestic industries have to boost the
capacity with the motive of increasing the supply.
Recent Developments
The demand of consumers is high due to which the industry is growing. It has been
analysed that the 72% of consumers prefers to buy the environmentally friendly brands and
60% of people prefers the brand clothes (Fashionating World, 2019). It is fact that the EAC
Countries in a bid to re-establish the enabling the environment that develops the clothes and
shoes market. The community is able to attain the structural transformation that would help in
socio-economic development in the partner’s state of EAC.
Competitiveness
The external competition in the industry is low as it is controlled due to less number
of people enter the market. But in the year 2000, it is observed that the domestic textile
company in Kenya has collapsed with the factors that increased competition for SHC. The

Strategic Analysis 6
local manufacturer of clothes can beat the SHCs companies by providing the cheaper clothes
as compare to SHCs. As per the analysis, it is observed that the competition against the
industrial sector is not only from SHC (Geneva, 2019).
Investment Analysis
It has been evaluated that the companies has to invest the less amount as compare to
the other industries. The company does not produce the new clothes due to which it consumes
fewer amounts to invest to sell the product. But nowadays the demand of consumers is
increases due to which they have to invest in the industry. As per the stock chart, the market
value of per share of SHC is 24000 which are high for the new entrants in order to invest in
the market.
(Source: Trading View , 2019)
As per the chart, it can be said that the industry is continuously growing and in the future it
achieve the success in near future.
Resources
Second hand clothes industry save the resources in order to develop the new clothes.
It uses the limited quantity of water and chemicals to produce the product. It requires the

Strategic Analysis 7
export and imports the clothes in order to provide the clothes to consumers. Donated clothes
by the supporting communities, physical capital, human capital are the resources of the
industry (Han, 2013).

Strategic Analysis 8
References
BBC. Used clothes: Why is worldwide demand declining?.
https://www.bbc.com/news/business-42777804, 2018.
Burns P, Dewhurst J, editors. Small business and entrepreneurship. Macmillan International
Higher Education; 2016 Jan 8.
Fashionating World. Secondhand clothes become fashionable in the US market.
https://www.fashionatingworld.com/new1-2/secondhand-clothes-become-fashionable-in-the-
us-market, 2019.
Fortune. The Resale Market Is Taking Over Fast Fashion, Report Says.
http://fortune.com/2019/03/19/resale-clothing-economy-growth/, 2019.
Geneva . The Impact of Second Hand Clothes and Shoes in EastAfrica. http://www.cuts-
geneva.org/pdf/PACT2-STUDY-
The_Impact_of_Second_Hand_Clothes_and_Shoes_in_East_Africa.pdf, 2019.
Rastogi NI, Trivedi MK. PESTLE technique–a tool to identify external risks in construction
projects. International Research Journal of Engineering and Technology (IRJET).
2016;3(1):384-8.
Trading View. LYXOR ETF SHT CAC. https://www.tradingview.com/symbols/EURONEXT-
SHC/, 2019.
Value Village. About Value Village. https://www.valuevillage.com/about-us, 2018.
Han, J. Understanding second-hand retailing: A resource based perspective of best practices
leading tobusiness success. https://lib.dr.iastate.edu/cgi/viewcontent.cgi?
article=4643&context=etd, 2013.