PRACTICE 03_DAIC

PORTER´S COMPETITIVE RIVALRY MODEL

Alba López, Inés Magariños, Carmen Magariños and Dani Noya
MASS MARKET
 PORTER´S COMPETITIVE RIVALRY MODEL

BARGAINING POWER OF SUPPLIERS BARGAINING POWER OF

CONSUMERS
-LOW
Primark distributes and sells its products, -LOW
buying them directly to manufacturers Primark consumers´ prefers
Supply chain without intermediaries: quantity before quality
ensure to reduce the price through the Customers don't have costs to
cost change to another brand
There are few so, it is easy to change to Low brand loyalty in mass market:
another one people search for the lowest price
THREATS OF SUBSTITUTE PRODUCTS

-HIGH
Most important factor in fast fashion
market: the price
Brands compete aggressively to improve
the price
Short life cycle prodcuts since
tendencies are changing all the time
They don´t care about brand
differentiation
 PORTER´S COMPETITIVE RIVALRY MODEL

THREATS OF NEW ENTRANTS

-HIGH COMPETITION OF THE INDUSTRY

Risk: constantly facing new market
entrants
-HIGH
-Rivalry is on the price
New entrants competing on:
-Primark's main competitors: Inditex,
-location, convenience, specialty
H&M and C&A with many sections
-following new trends
-Inditex has created Lefties to compete
-upscale product
more aggressively with Primark
-following the needs of the consumers
- Uniqlo competition on the future
PREMIUM MARKET
 PORTER´S COMPETITIVE RIVALRY MODEL
THREATS OF SUBSTITUTE PRODUCTS BARGAINING POWER OF CONSUMERS
- Low -Low
- Low -Low
Cheaper substitutes are available but the quality is Suppliers>firms>buyers --> not control over prices
downgraded Less price sensitive because of quality
To deal with the threat of substitutes Product differentiation within the industry is high
- Provides high quality and ‘high value for money’ products
-Differentiating its product offering
-Better customer experience
Still a major threat of counterfeiting because it makes the
brand looks mediocre and affordable to everyone

THREATS OF NEW ENTRANTS

- Low
-Low
Strong brand image and customer loyalty
Extensive supply chain and differentiated product offerings
Capital investment
Marking global presence and attaining market share
Tthe industry require strict licensing and legal requirements to be fulfilled
 PORTER´S COMPETITIVE RIVALRY MODEL
BARGAINING POWER OF SUPPLIERS
- Low -Low
Outsources its product rather than manufactures
A lot of suppliers compared to the buyers
Products of suppliers are fairly standardised, less
differentiated and have low switching costs
No other substitutes for the product other than the
ones that the suppliers provide (strong force within
industry)
COMPETITION OF THE INDUSTRY
- High -Low
Players are few but customer loyalty is intense
Louis Vuitton competes with its rivals by
differentiating its products and offering innovative
‘absolute quality’ products
Switching cost of customers is high
GROUP CONCLUSSIONS