Strategic Management through Market
Analysis
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Porter’s Five Force Analysis
II. BARGAINING POWER OF SUPPLIERS
I. INTRODUCTION
According to strategy, everything would revolve
around the market environment and entities that are
outside the scope of an organization like;
prominent organizations like local and national
governments, customers, suppliers as well as
competitors 1 . Strategists in the past have agreed
and accepted that acquiring information about the
competitive environment in a market could prove
to be a vital element that allows the development of
strategic management. It is not just essential but it
is also logical to study the environment in the
market for an organization, mainly keeping three
reasons in mind. One main reason would the
several organizations competing with each other 2.
The second reason would be that many
organizations would anticipate threats and
opportunities wherein they are required to control
threats and explore opportunities3. The third reason
being that there could be opportunities within
networking or linkages that could lead to
sustainable cooperation. In order to acquire a
detailed knowledge about the competitive
environment, it is imperative to execute a Porter’s
Five Forces analysis4.
Keeping these factors in mind, this report would
attempt to execute a Porter’s Five Forces analysis
for an apparel manufacturer (XYZ) that is keen to
enter the high end apparel segment in India.
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Every organization has their own raw materials or
services suppliers. In the garment sector, the
bargaining power of supplier is relatively low,
keeping in mind that a large number of suppliers
traditionally are made up of apparel manufacturers
who venture into new markets to safeguard their
businesses from other competitors that can eat into
their profits. In the case of XYZ, bargaining power
of suppliers would be less as it is a product that has
been initiated by XYZ which already has a
presence in India and they would be having their
own tie-ups and networks.
III. BARGAINING POWER OF BUYERS
As far as XYZ is concerned, buyers would be
having a superior level of bargaining power as the
business model of XYZ is buyer-centric. As a
result, XYZ would naturally be very sensitive to
any manner of qualitative or quantitative
modifications in terms of demand by buyers.
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IV. THREAT OF NEW ENTRANTS
While evaluating the competitive environment for
XYZ, an aspect that has come out very clear is that
they will be confronted with threat on the part of
new entrants that make a foray into the market in
India. Many global fashion houses are now making
an entry or have already entered into the high end
apparel segment across the world which presents
the threat of competition to XYZ. With
technological breakthroughs occurring almost
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every day several garment manufacturers are keen
to tap the high end fashion segment globally.
Therefore, threat of new entrants is high.
capturing a share of market segment that is
presently dominated by indigenous brands.
Definitely, competitive rivalry would be high
considering the number of already existing
established players.
VII. CONCLUSION
This report has executed a Porter’s analysis for a
high-end fashion giant ‘XYZ’ that is keen to enter
into the fashion segment in India. On the basis of
the analysis, it has emerged that the market
environment for XYZ in India is just right. Tutors
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REFERENCE
V. THREAT OF SUBSTITUTES
There has been an increasing interest in terms of
trying out something really new and innovative
than what is presently available in the market.
Therefore, there is every possibility that the apparel
products that XYZ intends to offer might be
provided by another apparel manufacturer. For
instance, if XYZ plans to sell a pair of high-end
denims for Rs.5000/- in the Indian market however,
if a similar type of denim that offers the same
fitting, same level of comfort as that of the XYZ
denim, is available to customers at comparatively
cheaper rates for example – Rs.3,500/-, the
customer will not think twice before making the
switch to a product being offered by a competitor.
Therefore, XYZ does face high level of threat from
substitutes. [Hope You Enjoy reading article, If you
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https://www.amazon.in/Exploring-StrategyCases-Gerry-Johnson/dp/1292145129
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https://www.amazon.in/Strategic-ManagementRichard-Lynch/dp/1292064668
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https://faculty.wharton.upenn.edu/wpcontent/uploads/2012/05/Concept-of-Strategy-40Years-Later-Introduction_1.pdf
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https://hbr.org/1979/03/how-competitiveforces-shape-strategy
VI .COMPETITIVE RIVALRY
When XYZ enters into the high-end fashion
segment within the Indian market, they will have to
deal with other global industry players who already
have a presence within the Indian market. These
would include; Dolce & Gabbana, Yves Saint
Laurent, Versace, Tommy Hilfiger other than the
indigenous fashion houses such as; Manish
Malhotra, Rohit Bal etc. However, each of the said
industry players serve a different clientele for
instance, D&G, YVL, Versace and Tommy
Hilfiger serve the super-rich clientele while
indigenous brands serve the next level of
customers. XYZ on the other hand focuses on
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