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Porter's Five Forces Fashion Industry Analysis

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Porters 5 forces on the Fashion industry 1. Rivalry amongst existing competitors. The leading competitors in the fashion industry world wide according to research carries out by mbasKOOL.com is: 5. Gap, 4. Adidas, 3. Inditex, 2. Nike, and the leading competitor being 1.Christian Dior . This is analysis looks at the sales, profits, assets and market value of each company and based on their individual success each company is ranked. As each of these companies begin to diversify from their initial product and target market competition intensifies between. For example Nike and Adidas are in direct competition with each other as both provide branded sports gear but each are beginning to move into producing less sport orientated clothing …show more content…

These characteristics, a complicated supply chain and wide availability of data make the industry a suitable avenue for an efficient supply chain. Also the fashion industry has been in a transition during the last 20 years: significant consolidation in retail, with most of the apparel manufacturing operations moving overseas and, in more recent times, increasing use of e-commerce in retail and wholesale trade. Historically, retailers have tried to exploit relationships with suppliers. Bargaining power of buyers is moderate because of the size and concentration of major retailers. To reduce power and you gain customers, retailers seek to differentiate products and to create stronger brands. Individual private customers have a low bargaining power in front of large retail chains, however, their power is greater for small retailers, who are far less organized. Having a contract with large retailers such as Christian Dior can make or break a small supplier. In the fashion industry, suppliers tend to have minute power. For example the Jewelry section of the fashion industry: There is increasingly larger number of competitors in the market, which has meant a larger supply of diamonds in the market. In the past, De Beers solved oversupply problems by collecting and storing them to be sold when deemed acceptable by them. This meant the supplier had immense power over the industry. By altering the market structure and pressure by anti-cartel laws, this power has decreased somewhat. De Beers now works more on reestablishing itself as the supplier of choice, and not only the supplier. The company has dealt with bans on stockpiling by lowering mining and leaving diamonds inside mines. There is also more time spent creating

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Due to their huge success, control over suppliers can be always be maintained by the company. Rivalry among the competitors is the force to reckon with and it is the one that will decide the future profitability of the fashion industry. Competition in fashion is very high since there are only a handful of competitors when looking at the giants. Future Industry evolution Scenario 1 The future of today’s world is technology.

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Simply put, Nike’s target market is mainly customers who have more concern for the quality and utility of the product than they have for the price at which the product is being sold. This helps to ensure that pricing never has to be adjusted downwards in attempts to woo in a larger number of customers. For any company to achieve success from the marketing strategies that it has put in place, it has to ensure that its strategy is flexible enough to keep up with the changing times and to also accommodate a large variety of customers. So as to do this, it is imperative that the products being produced by the company be innovative enough to exceed what is being provided by competitors in every possible way. Nike chose to take this into deep consideration and this resulted in it making a few changes on its marketing strategy.

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