Clothing Industry and Competitive Strategies

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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.

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