Calvin Klein faces high threats of new entrants in the profitable and easy-to-enter undergarment industry. To tackle this, CK can develop brand loyalty through product differentiation and uniqueness to build strong customer relationships. Rivalry among existing firms is also high as brands target the same premium customer segments. CK can collaborate with other brands to offer unique products and improve customer value to reduce rivalry threats. The bargaining power of suppliers and customers is high for CK. To address this, CK needs to diversify its supplier and customer bases and strengthen relationships to lower bargaining powers.
Calvin Klein faces high threats of new entrants in the profitable and easy-to-enter undergarment industry. To tackle this, CK can develop brand loyalty through product differentiation and uniqueness to build strong customer relationships. Rivalry among existing firms is also high as brands target the same premium customer segments. CK can collaborate with other brands to offer unique products and improve customer value to reduce rivalry threats. The bargaining power of suppliers and customers is high for CK. To address this, CK needs to diversify its supplier and customer bases and strengthen relationships to lower bargaining powers.
Calvin Klein faces high threats of new entrants in the profitable and easy-to-enter undergarment industry. To tackle this, CK can develop brand loyalty through product differentiation and uniqueness to build strong customer relationships. Rivalry among existing firms is also high as brands target the same premium customer segments. CK can collaborate with other brands to offer unique products and improve customer value to reduce rivalry threats. The bargaining power of suppliers and customers is high for CK. To address this, CK needs to diversify its supplier and customer bases and strengthen relationships to lower bargaining powers.
Calvin Klein faces high threats of new entrants in the profitable and easy-to-enter undergarment industry. To tackle this, CK can develop brand loyalty through product differentiation and uniqueness to build strong customer relationships. Rivalry among existing firms is also high as brands target the same premium customer segments. CK can collaborate with other brands to offer unique products and improve customer value to reduce rivalry threats. The bargaining power of suppliers and customers is high for CK. To address this, CK needs to diversify its supplier and customer bases and strengthen relationships to lower bargaining powers.
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Porters Five for CK
Threats of new entrants
Potential competitors would want to enter the undergarment industry as it is profitable and easy to enter the industry. Thus, more competitors will be attracted and threat of new entrants will be high.
Who are the entries?
Six brands grab nearly 36 percent of the market share i.e. Jockey, Amul Macho, Rupa, Lux, Dollar and VIP. Premium brands include UCB, Levis, M&S, fcuk
How to tackle
Developing brand loyalty by improving the CRM by introducing more varieties and uniqueness. If product differentiation is high and customers place high importance to the unique experience, it will build customer relationship and improve customer loyalty Commented [D1]: How to improve the crm, uniqueness in the product and customer loyalty? By developing long term relationships with the distributors to widen the access to the target market Commented [D2]: Who and what are the distributors
Improving the R&D to get valuable innovative products by improving technology and quality of the Commented [D3]: How? underwear
Entry in the industry requires money investment. Since huge investment is required and the revenue of CK is more than competitors (premium brands like UCB, Levis, M&S, fcuk) thus money investment is important criteria. Commented [D4]: What is the budget and how much money can we invest
Threat of Substitute Products or services
The threat is substantially low for Calvin Klein
How to tackle
There is fewer substitutes for quality and performance for CK .Thus, Calvin Klein can reduce the Threat of Substitute Products by offering product/service better than the available substitutes. Commented [D5]: How can u improve the product?
It should provide better experience and high value for money by improving the quality and maximize Commented [D6]: How ? value for money to discourage customers from using the substitute product.
Rivalry among existing firms
The Rivalry among existing firms is quite high as firms adopt aggressive targeting and pricing strategies against each other.
Rivals for CK in India
Budget Brands: Jockey, Amul Macho, Rupa, Lux, Dollar , VIP and Hanes Premium Rivals: UCB, Levis, M&S, fcuk and Van Heusen
Since CK is a premium brand, the company will face Rivalry among premium brands as they target the same market (Upper class people and middle class that aspire to wear CK ) but improving the CRM and collaborating with Nike can improve the value and decrease rivalry threat as none of the top premium underwear brand has collaborated with at leisure before
CKU-M has remote competition and no direct competitor Commented [D7]: Who are the competitors of CKU-M and what is the product quality? What fabric do they use ? what is the price point ?
Bargaining Power of Suppliers
Bargaining power of suppliers shall be high for Calvin Klein
How to tackle?
Calvin Klein can strengthen its position against suppliers by decreasing the dependency on one or a Commented [D8]: Who are the supplier and what is the process of supplier? few suppliers. Developing the long-term contractual relationships with suppliers from different Commented [D9]: How to develop long term relationship? regions will lower their bargaining power. Product redesign and diversification of the product lines can also help the organisation reduce the Commented [D10]: How to redesign the product and diversify the product line? suppliers’ power in the market.
Bargaining Power of Customers
Customer power is high in CK
A more concentrated customer base increases their bargaining power against CK
Calvin Klein should manage the bargaining power of customer by increasing and diversifying their customer base. It can be done by introducing new products, targeting new market segments and Commented [D11]: How to increase / improve the customer base adopting the product diversification strategies. Marketing and promotional strategies can also be How to diversify the customer base? helpful in this regard. Building loyalty by embedding innovation and offering excellent customer Commented [D12]: What are the product diversification experience can raise the switching costs, which will ultimately reduce their bargaining power. method? Commented [D13]: How to work on the marketing and promotional strategy and improve the process?
CK STP Commented [D14]: How to add innovation to the product?
S: Customers who are fashion conscious and looking for high end best quality products Commented [D15]: How to add customer to the CK club?
T: Urban upper class youth and business executives (6 figure salary)
P: Rich and quality product for the premium customer
SWOT Analysis
Strength
1. Modern brand with excellent brand equity
2. Company has licenses for cosmetics, jeans, and menswear, sports, watches and jewelry
3. Strong brand name and good marketing
4. Global distributed system is excellent
5. The advertising campaign is found in high fashion magazines including Vogue, Elle, Harpers Bazaar, and Glamour hence good consumer awareness
Weaknesses
1. Products are expensive and premium which means limited target audience 2. Fake imitation and duplicate products are affecting sales
Opportunities
1. Population growth, development and economic integration
2. Development of internet, and other mass media where brand penetration can happen
3. Great opportunity in developing countries
Threats
1. Customer needs and changing perception about the product
2. Global factors like high tax implications, High inflation which affects buying behavior of consumer 3. Customers look for high quality with low price hence high chances of brand switching is high as CK is a premium brand
