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    Porter's Five Forces

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    William Lancaster
    The document analyzes Porter's Five Forces for the Spanish apparel retail industry. It finds that buyer power is moderate, as buyers have some power due to low loyalty but retailers can differentiate. Supplier power is also moderate as production has moved overseas but suppliers lack diversity. New entrants face a strong threat as the market has shrunk and competition from major players is high. Substitutes pose a low threat as online shopping is emerging but niche alternatives remain limited. Rivalry is strong as the market has many similar retailers in a fashion industry with fast change and lower projected sales.

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    Porter's Five Forces

    Uploaded by

    William Lancaster
    437 views2 pages
    The document analyzes Porter's Five Forces for the Spanish apparel retail industry. It finds that buyer power is moderate, as buyers have some power due to low loyalty but retailers can differentiate. Supplier power is also moderate as production has moved overseas but suppliers lack diversity. New entrants face a strong threat as the market has shrunk and competition from major players is high. Substitutes pose a low threat as online shopping is emerging but niche alternatives remain limited. Rivalry is strong as the market has many similar retailers in a fashion industry with fast change and lower projected sales.

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    The document analyzes Porter's Five Forces for the Spanish apparel retail industry. It finds that buyer power is moderate, as buyers have some power due to low loyalty but retailers can differentiate. Supplier power is also moderate as production has moved overseas but suppliers lack diversity. New entrants face a strong threat as the market has shrunk and competition from major players is high. Substitutes pose a low threat as online shopping is emerging but niche alternatives remain limited. Rivalry is strong as the market has many similar retailers in a fashion industry with fast change and lower projected sales.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    437 views2 pages

    Porter's Five Forces

    Uploaded by

    William Lancaster
    The document analyzes Porter's Five Forces for the Spanish apparel retail industry. It finds that buyer power is moderate, as buyers have some power due to low loyalty but retailers can differentiate. Supplier power is also moderate as production has moved overseas but suppliers lack diversity. New entrants face a strong threat as the market has shrunk and competition from major players is high. Substitutes pose a low threat as online shopping is emerging but niche alternatives remain limited. Rivalry is strong as the market has many similar retailers in a fashion industry with fast change and lower projected sales.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Porters Five Forces

    (Marketline)
    1. Buyer power
    Buyer power in the Spanish apparel retail industry has decreased
    because of the small size of buyers.Mostly the clients of the retial
    stores are individual whih weaknesses the buyer power.
    Buyer loyalty is mostly connected to the the specified designer and
    not that really to the retailer. The market for non- designer apparel
    in Spain is big and it is mostly focused to people with lower income.
    Retailers can differentiate themselves through the styles of clothes
    and the the price range of the cloehing , meaning buyer power is
    decreased.
    Retailers are obligated to offer buyers what they demand in a
    unpredictable market like the fashion industry, which strenghten
    the buyer power.
    Overall, the buyer power is moderate.
    (p.14, Apparel retail in Spain, Marketline)
    2. Supplier power
    The main suppliers in this industry are the clothing manufacturers
    and the the wholesalers.With the liberalaization of the international
    trade, the supplier power in Spain has decreased , because most of
    the retailers are outsourcing their production in low-wage regions
    like China and India. The lack of diversity between the suppliers also
    weakens the supllier power. The existence of minimal wage slightly
    increases the supplier power. Overall,the supplier power is
    moderate.
    (p.15, Apparel retail in Spain, Marketline)

    3. New entrants
    The spanish apparel retail industry has shrunk in the past years.This
    makes the the spanish market less attractive for new investors.
    Entry barriers and capital requirements are low. The largest share of
    this industry is big companies Inditex and H&M.
    Low switching costs and the low level of products diferentiation
    makes the market penetration easier for the new entrants
    The increased VAT from 18% to 21%, lead to higher unemployable
    and lower sales. Overall, there is strong threat to the new entrants.
    (p.16, Apparel retail in Spain, Marketline)
    4. Substitutes
    Most of the major apparel companies now have online shops, which
    is an alternative to the conventional distribution chain. The people
    acceptence of the online shopping makes the internet an alternative
    shopping channel.
    This means that some copanies can operate directly through the
    internet , without need of opening a retail store.
    Couture clothing is also a niche alternative.Another option is buying
    second-hand clothes from sites like eBay.
    Overall, the threats of substitutes is low.
    (p.17, Apparel retail in Spain, Marketline)
    5. Degree of rivalry
    The spanish appareal retail indusstry is composed of a lot of similar
    retailers. Increasing the capacity of the smaller players in the
    market could be costy for them. The face pace of change in fashion
    makes the rivalry stronger. The diversified product line of the
    retailers, increases the rivalry. The sales in the spanish appareal are
    forecasted to be lower because of the higher unemployment which
    makes the rivalty stronger.
    Overall, the rivalry is assessed to be strong.
    (p.14, Apparel retail in Spain, Marketline)

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