PORTER’S FIVE FORCES: PENSHOPPE

Threat of
Substitute
(HIGH)

Bargaining Bargaining
Power of Competitive Rivalry Power of
Suppliers Consumers
(INTENSE)
(WEAK) (STRONG)

Threat of New
Entrants
(LOW)
Competitive Rivalry – INTENSE
 There is an intense rivalry in the industry where Penshoppe belongs because of

the large number of businesses that are competing offering similar products.

Most of its competitors are big brands such as Bench and Oxygen that use

customer loyalty and quality to their advantage. In addition, fashion is fast

changing so adapting is a must in this type of industry. Penshoppe is slow in

grasping the new trend that the consumers are looking for. Even though they

produce great designs and collections, they are behind a step from other foreign

brands. Foreign brands have strong brand equity which allows them to control

prices. Customers value brand and quality at the same time that’s why promotion

is the key to compete in the business.

Threat of Substitute – HIGH

 Since clothing is a primary necessity, the threat of substitute is low. Although

there are no substitutes, the variety of the product is wide which made the

competition among players intense. Branded Penshoppe clothing can be

substituted easily by cheaper and identical versions of it. For those who cannot

afford designer clothes, there are many substitutes that are available at a lower

price. Looking fashionable does not mean one should spend much.

 Foreign brands better design and better quality.

Threat of New Entrants – LOW

 The threat of new entrants is low in the because the population is saturated by

popular and generic brands plus stand-alone businesses for tailored clothes.

Opportunity in the industry is thin because of the strong competition. To be

successful, one must be aware of the changes and use it to find ways to be

innovative and unique. Also, investments to infrastructure, marketing/promotion,

distribution and human resource are significant barriers to enter.

Bargaining Power of Suppliers – WEAK

 Suppliers do not have the power to establish prices against business retailers.

Penshoppe have the purchasing power because there are many suppliers of

clothing. This allows them to switch from one supplier to another if their current

providers cannot comply with the standards they set.

Bargaining Power of Consumers –

 Consumers are well informed through different types of media nowadays which
WEAK
give them the advantage in choosing prices. Buyers can select from different

alternatives and can effortlessly shift between several brands prevailing and

available in the market. The number of competitors provide customers a wide

number of options. Businesses must find ways to attract and retain customers
and the best way to compete is through marketing. They utilize technology to

their advantage to easily engage and connect to their target segment customers.