Clothing Industry and Competitive Strategies
Introduction
Clothing industry in the U.S is a big but very competitive industry. It has a very high potential for firms to generate million dollars of profit. However, it is also a very tough environment to survive. Express Inc, Gap Inc, and Guess ? Inc are three of the U.S clothing companies who are experiencing the extremely competitive environment. Each company has its own competitive strategy to fight in the market. With Express, the firm tries to differentiate its products by creating unique, formal, luxury and sexy image in their minds. Gap, on the other hand, try to provide customers with high variety of products and prices. Guess tries to follow the fashion trend investment to attract its customers. Whatever the strategies are, the most important thing is archive huge market share and generating profit. This paper will provide some background, analyze the market condition, the strategies as well as give some recommendation for each of the three companies above.
Overall Market Conditions
Threat of New Entrant: Clothing industry has a very high threat of new entrance. Because the U.S population includes many of different cultures, races, and regions, fashion tastes can vary widely among people. Moreover, U.S is an open-minded country, so new styles of clothing will more likely to be accepted in U.S than other countries. U.S is also the world's leading apparel market with $338 billion sale in 2012, so there are very high opportunities for companies to make great profit. Thus, there is a high change that new or foreign companies will come in and compete with traditional firms.
Buyer power: Individually, a retail customer has very low bargaining powers. However, the view of a group ...
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...shion trends, but it only makes up around 17 % of the company profit. The other two brands, Old Navy and Gap, usually provide customers with somewhat basic clothes in many kinds ( hood jacket, pant, T-shirt, shirt …). Those basic traditional clothing styles last very long in traditional customers' view of fashion. However, they have nothing special in fits and designs. Thus, the two brands only attract unfashionable customers who do not care a lot about their clothes. Those customers will rarely go shopping for clothing compare to the people who dress fashionably. They are also very price sensitive who might change their clothing brands for cheaper prices. Moreover, basic styles can be easily imitated by competitors. Therefore, If Gap Inc does not add specialty in its clothes' styles, the competitors will take advantage of that to take some portion of market share.
This nationally recognized mass merchandiser that stood as Kohl’s other leading adversary in the market has everyday low prices that were able to compete with Kohl’s promotional events. Wal-Mart also outdid their competition when it came to number of store locations around the country. The weaknesses of this reputable company come to light when shoppers are looking to buy clothes and are not presented with nearly the selection that the department store can offer. Also, their service is not considered to be as helpful as the department stores that can input more expertise when trying on
Bargaining power of customers looks at the power of the consumer to affect pricing and quality. (Arline,
The relationship with powerful suppliers can potentially reduce strategic options for the organization. 2 Bargaining Power of Customers Similarly, the bargaining power of customers determines how much customers can impose pressure on margins and volumes. Customer bargaining power is likely to be high when They buy large volumes, there is a concentration of buyers. The supplying industry comprises a large number of small operators.
Analysis of sports clothing industry, including its main features, key market drivers and competition within industry.
Lululemon Athletica, Inc. (Lululemon) is renowned for its technical, high-quality yoga-inspired apparel for women. However, the company is growing beyond this niche market and is therefore altering its competitive strategy. Lululemon utilizes a broad differentiation strategy because its target market is broad and its product line is varied, it stresses product innovation, and its community-based marketing and retail experience sustain its differentiation from competitors.
Primark has a huge customer base for being one of the largest clothing retailer in the UK. Nonetheless, the bargaining power of buyers is relatively high due to the large quantity of competitors in the industry. Buyers are price sensitive and they will probably seek for the lowest price before purchasing an item. There is no switching cost in the market so customers are likely to buy products in other store once they discover a cheaper price.
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.
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...
The business model that sets Zara apart from other clothing retailers is how rapidly the company changes stocks and releases new product lineups. The company averages 12-16 collections annually which equates to more than one lineup a month. Due to stock being limited and the rapid production Zara brings forth, their items are viewed as exclusive promoting further business. Their customers are happy knowing that their specific article of clothing is more “rare” due to only having an average of a two-week window to purchase the clothing. The company specifically targets current trends and has them in the store within 30 days. This maintains the brand’s uniqueness and relativity in fashion.
Profile My cousin sister, Punam Sharma runs a clothing store in city centre, Kathmandu, Nepal. We were growing together, and I know how she has grown her business from a small retail shop to a big clothing store. It is all possible due to her hard work. Before, she could not afford to buy more products, but now she imports products from Thailand and Bangkok. Her good interpersonal skills helped to earn many customers and she is a successful independent woman.
Buyer power is very low in this market because one customer’s decision to use the service or not to use it will not affect the overall market. Likewise, one customer’s dissatisfaction will not influence a significant number of other c...
New entrants to an industry, with a desire to gain market share, will put pressure on prices, costs and capital needed to compete. It can affect the profit potential.
The Apparel or clothing industry is a very dynamic market where changes occur in a daily basis. So, rivals within this industry assist to an extreme competition. To make sure that, they stay relevant in the market scene, businesses have to develop creative, innovative and sustainable marketing strategies to attract more customers and increase their brands awareness. Because, this industry has many players, we have chosen one well known company to make our research more specific and well centered. Hennes and Mauritz AB commonly known as H&M is our best choice because, this
U.S. Congress, Office of Technology Assessment, The U.S. Textile and Apparel Industry: A Revolution in Progress–Special Report, OTA-TET-332 (Washington, DC: U.S. Government Printing Office, April 1987). <http://www.wws.princeton.edu/cgi-bin/byteserv.prl/~ota/disk2/1987/8733/873306.PDF>
Threat of new entrant is a business or company thinking of entering the market, that haven’t yet. Mr Price must close any gaps leading to opportunities for a new business by ensuring customers are satisfied and getting all that they need. There are no new threats known yet, but with some online stores such as ‘Apparal.com’ offering free worldwide shipping, Mr Price will need to monitor their public opinion/popularity. The threat will be destroyed if the government implicates a law against importing clothing in order to protect the local market.