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Evaluate the relevance of Porter's five forces model to organisations in industry and commerce today
Evaluate the relevance of Porter's five forces model to organisations in industry and commerce today
Factors affecting supplier selection
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1. Introduction
In jeans market, the participants are required to value the industrial context and the developmental trend. Besides, in the process of expanding business scale, internationalization also refers to a strategy that is concerned much by the organizations in the market. In this report, the aim is to make research on the industry structure and internationalization process of Lee. As a competitive participant in jeans market, Lee’s measures and strategies will be analyzed and evaluated well in the research. There are three aspects in the report. In the first aspect, it analyzes the industry structure of Lee. In the second aspect, it discusses the internationalization process of the organization. In the third aspect, it makes evaluation and puts forward relevant recommendations to enhance these two aspects further.
2. Industry structure of Lee
Lee serves as a strong competitor in jeans market. With long history of development and management, the organization keeps its large sales volume and high profitability in both local market and the global market (Lee Jeans, 2014). In its operation and development, the industry structure makes significant influence on its development and growth directly. Porter has put forward five forces theory (Dobbs, 2014, p.34). There are five basic elements that are expected to be considered well in learning the industry structure. First, it is the bargaining power of suppliers. The suppliers are affected by the fierce market competition. Lee is strict in selecting the raw materials. Only the ones that are capable of providing raw materials with high quality and reasonable price will be selected. Besides, the agreement will be signed properly between Lee and the suppliers (Tavoletti, 2009, p.66...
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Dobbs, M. (2014) Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), pp. 32-45.
Eickman, M. and Bhardwaj, V. (2011) A case study on the internationalization process of a “born-global” fashion retailer. The international review of retail, distribution and consumer research, 21(3), pp. 293-307.
Lee Jeans (2014) Our Company. Available from: http://www.lee.com/store/LEE_STORE_US/en_US/content/our_company/about.html# (accessed 18 April 2014).
Runfola, A. and Guercini, S. (2013) Fast fashion companies coping with internationalization: driving the change or changing the model? Journal of Fashion Marketing and Management, 17(2), pp. 190-205.
Tavoletti, E. (2009) Strategy and Structure in the Italian Fashion Industry: A Case of Internationalisation. Transition Studies Review, 16(3), pp. 655-670.
Porter’s five competitive forces framework will help Samantha to analyze competitive analysis and help in her business strategy development. It will help her determine competitive intensity and attractiveness of the market segment she is involved in. In this case Samantha twig tree trimming services will be influenced by the five forces these are:
The 5-Force Industry Analysis first introduced by Michel Porter, Harvard Business School professor, a quarter-century ago. This theory examines the suppliers, buyers, product substitutes, existing firms’ rivalry and new entrants in a firm’s product market.
Porter’s five forces I based on the argument that the potential of an organization is determined by the structure of the industry and the market it is operating in and that companies that are operating where competition is limited is likely to be more profitable; an industry with fierce competition would be unprofitable.
Introduction Fashion during 2000-2010 was rapidly moving forward, its audience was growing like never before due to the technical advancements and a communication revolution. This report looks at the main influences on fashion including political changes, military action and society as a whole, this plus many more influenced the fashion industry and consumers buying habits making the decade the most advanced yet. Methods This report includes information and research from books, magazines, blogs and newspapers published before 2010.
To take Lining, a sport clothing brand as example, they have attempted to enter well developed foreign markets, but it was failed finally because it did not know the its product positioning and which part of consumers it should
In the primary activities, several measures are taken to control cost and create value. LV reduces cost by learning modern manufacturing method from auto makers and other industries. Although the Louis Vuitton’s production is still a labor-intensive process, increasing efficiency and productivity were achieved by reaching perfect balance between machines and labors. To adding the value of products, LV pays much attention on the improvement of quality. Since “made in France” is a guarantee of high quality, Louis Vuitton never builds factories out of France or outsources the production to a location with cheap labors. Although the labor price in France is extraordinarily high, the benefits such as customer loyalty and commercial reputation obtained by the company obviously outweigh the pay. Apart from that, test laboratories are established for quality checking. In the laboratories, bags are lifted and dropped again and again and jewelries are shaken strongly to make sure every customer get merchandizes of high quality. Since quality is a significant factor to measure a product in Japan, these strict quality control process satisfies Japanese customers. Customer service is another important factor in primary activities. According to the LV regulations, once a product i...
American Apparel strategy has several goals in order to increase sales and overcome their current economic situation. They adopt account both international and external into factors to make sure that they managed their strategies to be successful. American Apparel has 285 stores in 20 countries, placed according to the target market like metropolitan areas (American Apparel). American Apparel proud of their belief such as selling products and emphasizing log “made in the USA”. They have variety of clothes not only sell it to people in the USA, but also sell their products in the world.
The Porter five forces model (see Appendix 1) as an external analysis tool was established by Michael E. Porter and firstly announced in his book “Competitive Strategy: Techniques for Analyzing Industries and Competitors” in 1980 . The main idea of the Porter five forces concept is that the attractiveness of a market depends on the characteristic of the five competitive forces that have an impact on a company (see Appendix 2).
Miuccia Prada once said that “What you wear is how you present yourself to the world, especially today, when human contacts are so quick. Fashion is instant language”. Miuccia Prada and the Prada brand have grown from humble beginnings making quality leather goods to a public traded company with a current market capitalization of over $26 billion (USD) . With the development of Prada as one of the world’s premier luxury brands it provides an excellent case study to examine how strategy paved the way for the success of the Prada brand. First, an examination of Prada’s strategic positioning against luxury brand rivals Louis Vuitton Hennessey Moet (LVHM) and Kering (Gucci). The acquisition history of Prada will be reviewed, where some preliminary conclusions can be made about what has been contributing factors to both the successes and failures. Then finally, an evaluation of what the future holds for Prada and the sustainability of its competitive advantage.
For the past several decades, globalization has been a hot topic and it also anticipates every aspect of the world to connect each other. Likewise, globalization also allows consumers to have more access to catch up with updated fashion. The advantages of globalization bring a new philosophy called fast fashion, which holds quick response time and enhanced design in fashion apparel industry. In this paper, I will deliver By exploring all the aspects of each system, I will conclude the reason why fast fashion becomes the mainstream of the fashion apparel industry, and use one particular brand, Zara, as an example to discover the impact on consumer behavior in detail. Finally I will make some comments on the future of fast fashion and what luxury brands will react to this circumstance……..
The period success of GAP had taken a turn since 2002. Profits and revenue continued to decline. From 2008-2010, just in U.S, 6000 retail stores had been closed because of the financial recession; during this period, Gap closed more than fifty of its 3251 stores. The annual income of GAP had also been successively overpassed by ZARA in 2008 and H&M in 2009, which dropped down to the third in fashion industry (Liu, 2013). And continually, the company’s net income declined to $833 million in 2011, which is 17% less than it earned in 2010 (Exhibit 1) (Ciasullo, Blauvelt, & Lambert, 2012). In U.S, the largest market for GAP, the elder generation who bought Gap products in 1990s had gradually left Gap for different requirements with the increasing age, and Gap was unable to keep its success with the younger generation. In addition, although Chinese market currently has been the second largest market for GAP Inc., they still operate the GAP brand as a follower without any distinct positioning str...
Due to the increasing competition in the global market place and more so in the local markets most companies are exploring the option of venturing oversees to market their goods. Various factors motivate such moves most of them being business sustainability oriented. Such firms are applying marketing principles in several countries. The firms are making single or several marketing mix decisions beyond state boundaries. Such moves at times involve establishing production bases in foreign countries and harmonizing marketing strategies all over the world. Some firms have penetrated the global market by either establishing partnerships in the foreign countries; merging with target country firms; or even by acquiring foreign based companies Nakra, 2006). Haier Group Company, a Chinese manufacturer and marketer of home appliances has not been left in such marketing strategies and has established its base in the Indonesian market.
The task I am assigned to do is authorized by Pokhara University and ACE Institute of Management in partial fulfillment of the requirements for the degree of Bachelor of Business Administration. This proposal writing assignment was guided by our course instructor Mr. Prakash C. Bhattarai and with his help and my interest I selected the topic: An Overview of the Fashion Boutique Industry of Nepal.
For assessing the industry profitability, Porter 5 Forces analysis tools were used to analyze one organization evaluation. In this case, the technique were used to analyze 7-Eleven Convenience Store specifically in Malaysia. Porter 5 Forces consists of 5 important area which is Threat of New Entrants, Bargaining Power of customers, Threat of substitute Products and services, Bargaining Power of suppliers, and competitive rivalry within the industry. Theoretically, the more powerful these forces in an industry, the lower its profit potential. The strength of each force differs by industry and changes over time. The competitive advantage that 7-Eleven has using these five forces is it has raised the barrier of entry for other competitors to enter the convenience store market as new competitors will require a huge capital investment in order to implement the information technology in their business in order to be competitive. Also, hypothetically being the first in the market, 7-Eleven could have made contracts with the Malaysia government to not allow other 24-hour convenience stores in the market for a certain time period, such as Astro had done, thus having a monopoly market in the beginning of their operations which will allow them to target a bigger market share.
...enture into overseas market comes with expectations as well as uncertainties due to unfamiliarity. Charles and Keith, the fashion retailer, has to understand clearly that what appeals in one market might not be accepted in the others and this is almost the same for all industries. Thus, a thorough research on cultural background has to be done before entering an unfamiliar ground.