Question

describe porter's five forces and apply it on whole fashion industry

Answer 1

Porter' Five Forces was created by Michael Poter to identify the strategy's potential profitability and analyze industry's attractiveness and competitiveness to determine how much it may profitable for the business. He developed five factors for this determination, which is known as five forces. These five forces are as follows:-

1.Competitive Rivalry

2. Buyer Power

3. Supplier Power

4. Threat of New entry

5. Threat of substitution

The fashion industry is one of the biggest industry which has the market of billion dollars. To analyze the feasibility of whole fashion industry by using porter five forces, it is as follows:-

1. Competitive Rivalry:- This focus on the number and strength of competitions in the market. In fashion industry, there are large numbers of retailers and wholesellers who are selling the same products. Then your buyers can go to other sellers, if they think that they are not getting good deal from you. But there is a concept of "brands" in the fashion industry. The more well esatablished your brand, the more price will you get for your product. But these days, fashion market is loaded with similar products, so there is littile innovation in ths space.

2.Buyer Power:- This focus on the buying power of the customer. In fashion industry, it is the important force because buyers have the ability to push the prices down or can switch to other sellers in the market. The customers will move to that seller that offers relatively price due to high number of substitutions available in the market.

3. Supplier Power:- This focus on the number of suppliers and how unique product they provide and how expensive is it for switching from one supplier to another. In the fashion industry, this force is relatively small and is not so crucial because suppliers have very less control over the industry and they are easily replaceable.

4.Threat of New entries:- This focus on the number of new people who enters in the market. in fashion industry, this force is relatively small because for a new entrant, it is not easy to compete with already well established brands and it is very expensive to set up new business in the industry. This requires huge cost on marketing the product yo compete with novel brands so there may be high risk for new entrant in this industry.

5.Threat of Substitution:- In the fashion industry, this force is almost negligible because there is very little to substitute with. For eg:- there is very little to substitute to clothes with. Even if there is some cheap and easy substitute available, then also a well established brand does not get impacted from this.