The term fashion is a creative expression of purpose, place, and time in a specific context. The production and sale of fashionable goods, items, and accessories proceed in the fashion industry. Today, we’ll discuss Porter’s five forces analysis of fashion industry; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and competitive rivalry as competitive forces in strategic management.
The fashion industry deals with the following products and services;
- Makeup
- Hairstyle
- Body posture
- Lifestyle
- Accessories
- Clothing
- Footwear
- Cultural aesthetic
- Jewelry
- Cosmetics
Porter’s five forces analysis of Fashion Industry would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and competitive rivalry as competitive forces in strategic management. Here’s Fashion Industry Porter’s five forces analysis as follows;
Porter’s Five Forces Analysis of Fashion Industry
Let’s discuss Porter’s five forces analysis of Fashion Industry as a competitive force in strategic management; they’re as follows;
Bargaining Power of Suppliers in Fashion Industry
The bargaining of suppliers is Moderate to Lower in the fashion and cosmetic industry as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the retail fashion industry Porter’s five forces analysis of the cosmetic industry are as follows;
I-Raw Material Availability
The bargaining power of suppliers is heavily reliant on the availability of raw supplies and materials. If the raw material is easily and readily available, then it would decrease their power; if not, they would have higher bargaining power.
II-Many Suppliers
Overall, there are various suppliers available in the fashion and cosmetic industry, and they offer easy outsourcing options to retail fashion brands. In order to deal with the competition, many fashion and cosmetic suppliers prefer to partner up with top retail fashion brands. It is because they would have consistency of orders and they don’t have to renegotiate the price and quality.
Bargaining Power of Buyers in Fashion Industry
The bargaining of buyers and customers is Higher in the retail fashion and cosmetic industry competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the retail fashion industry Porter’s five forces analysis of cosmetic industry are as follows;
I-Various Options
While shopping for clothes, cosmetics, and other fashionable products and accessories; customers and buyers have got a lot of choices and variety. They have options in the premium, medium, and affordable categories. There are various brands offering different types of products to cater to the needs of various segments of the customer market.
II-Lower Switching Cost
Most importantly, customers could easily from one premium brand to another or one affordable brand to another without incurring costs. Different categories of fashion and cosmetic brands offer almost similar types of products; buyers are always switching from one brand to another.
Threat of New Entrants in Fashion Industry
The threat of new entrants is Lower in the fashion and retail cosmetic industry as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the retail fashion industry five forces analysis of cosmetic business are as follows;
I-High Initial Investment
Entry into fashion industry requires a plethora of capital investment to set up and launch their business. Leading fashion and cosmetic brands enjoy the competitive advantage of economies of scale; where new startups can’t take the cost competitive edge.
II-Branding Cost
Along with high initial capital investment, leading fashion and cosmetic brands like Palmolive and Gucci invest a significant amount of resources in marketing and advertisement. Their focus is on differentiating their brands from the competitors. They have established a very large network of loyal customers, and they always prefer their favorite brand.
The threat of Substitutes in Fashion Industry
The threat of substitute products and brands is Moderate in the fashion and retail cosmetic industry as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the retail fashion industry five forces analysis of cosmetic industry are as follows;
I-Various Products & Brands Options
There are various fashion and cosmetic brands that offer almost similar types of products and goods without any differentiation. Whether it is clothing, shoes, footwear, jewelry, or accessories; every type of substitute product or brand in every category is available to the customers.
II-Lower Price & Quality
The reason top retail fashion and cosmetic brands have maintained a significant portion of customer market share is because of high-quality service. One thing has become clear over the years lower price means lower quality; that’s why the threat of substitute products and brands is lower.
Competitive Rivalry in the Fashion Industry
The competitive rivalry among retail fashion brands is very high in the fashion and retail cosmetic industry as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in the five forces analysis of fashion industry and retail cosmetic business are as follows;
I-Tough Competition
There are many brands and companies operating their business in the retail fashion and cosmetic industry. It has become very difficult and challenging for them to maintain their position in the customer market.
II-Competing to Launch New Style
Along with the tough competition, Fashion, and competing brands are competing to launch a new design or style in the market to gain a competitive edge. The thing about fashion industry is that it is always changing with the latest trends, styles, and designs. The focus of fashion and cosmetic brands is to differentiate them and gain a competitive edge.
Conclusion: Fashion Industry Porter’s Five Forces Analysis |Five Forces Analysis of Fashion Industry
After an in-depth study of Porter’s five forces analysis of fashion industry; we have realized that fashion and cosmetic industry is highly competitive. If you are learning about fashion industry five forces analysis of cosmetic industry; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; the threat of new entrants and substitute products; and competitive rivalry as competitive forces in strategic management.
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