• Bargaining power of suppliers Low
• High number of
suppliers
• Bargaining power of customers Mid
• There are lots of
competitors
• Best alternative of
value for money?
• Threat of new entrants Mid
• There are no strong
barriers to entry
• Growing market
• Main competitors
already established
• Threat of substitute products: High
• Market in constant
innovation and redesign
• Competitive rivalry within an industry High
• Leaders strongly
positioned
• Aggressive
competitiveness (price wars, heavy investment in advertising, ...)
You said that there are no strong entry barriers, but what's about initial costs? Like to build shops, for example.
ResponderEliminarWhat is the substitution for clothes? Market is innovating, there is no doubt, but you are the retail company and so you can simply change your products in accordance with market trends, don't you?
As you say, one of the entry barriers would be the initial capital, but it depends on the business model. You don't have why to own all shops from the begging, actually since our core business is not the real state and we are new in the russian market, we wouldn't start owning our shops to make things easier and avoiding risks.
ResponderEliminarYou are right about the threat of subsitute products, and that's why we identified it as high since it is continuosly innovating so we can not stop, and if we don't follow the new trends of the market, the new collections from other brands will steal all our clients, so the threat is high.
Ok, but the size of your shops is quite large. Is it possible to rent such a big places in a proper place? What is the average size of your shop?
ResponderEliminarAbout substitutes. I think it's more like direct competition, not the substitute. Don't you think so? And substitute may be like another form of distribution (like e-commerce) or substitution of your products as a product itself, like people will stop wear clothes and will do something else. So I meant this.
Shops for Primark are a very big issue, and that's why our entry strategy is by the hand of a partner with a lot of expertise and conexion on the real state market here in SPb and Moscow. We have to add a new entry on the blog about this strategy.
ResponderEliminarAnd about the substitut products, now I'm not very sure because I see your point, I'm going to comment it with my team :)
As I understand, substitution is the product that can serve for the same purposes but by the way to be absolutely different from first one.
ResponderEliminarFor example, train is substitution for the plane, or Skype is substitution for mobile phone in some cases and so on.
But new jet is not the substitution for old model of airplane or Iphone is not the substitution for Android based gadjets. It's direct competition.
So what I meant was that new trends, designs and so on are still in terms of clothes.
Nonetheless, it's not so important for marketing prospective in this case, I think.