Professional Documents
Culture Documents
SUBMITTED TO – SUBMITTED BY –
DR. MITALI TIWARI Tushar Verma
ASSISTANT PROFESSOR Enrollment No.-210101158
(ECONOMICS) B.A. LL.B. (Hons.)
Dr. Ram Manohar Lohiya National Law University 1 st Semester, Section ‘B’
ACKNOWLEDGEMENT
I have taken efforts in this project. However, it would not have been possible without
the kind support and help of many individuals and organizations. I would like to extend
my sincere thanks to all of them. I am highly indebted to Prof. (Dr.) Mitali Tiwari for her
guidance and constant supervisions as well as for providing necessary information
regarding the project, also for he support in completing the project.
I extend my gratitude towards the seniors of my course, who constantly helped me
find the best sources for research. Finally, I acknowledge the authorities as well as the
care-takers of Dr. MadhuLimaye Library, who provided me with the means to make
this project in the form of books, computer system, internet access, access to online
paid law reports et cetera. This project is a result of my efforts combined with all the
means and environment that has been provided to me by Dr. Ram Manohar Lohiya
National Law University, Lucknow and its authorities and I an thankful to them.
DECLARATION
FASHION INDUSTRY
ABOUT THE INDUSRTY
• The fashion industry has significantly evolved, particularly in last 20 years. The changing
pattern of the fashion industry has forced the retailers to desire low cost and flexibility in
design and speed to market. Fashion industry, multibillion-dollar global enterprise devoted
to the business of making and selling clothes. Some observers distinguish between the
fashion industry (which makes “high fashion”) and the apparel industry (which makes
ordinary clothes or “mass fashion”), but by the 1970s the boundaries between them had
blurred
• The fashion industry consists of four levels: the production of raw materials, principally
fibers and textiles but also leather and fur; the production of fashion goods by designers,
manufacturers, contractors, and others; retail sales; and various forms of advertising and
promotion. These levels consist of many separate but interdependent sectors, all of which are
devoted to the goal of satisfying consumer demand for apparel under conditions that enable
participants in the industry to operate at a profit.
• China is the largest textile producing and exporting country in the world. With its rapid
growth over the last two decades, the Chinese textile industry has become one of the main
pillars of the country's economy.
TOP FASHION BRANDS AROUND THE
WORLD AND IN INDIA
BRANDS BRAND
VALUE
• NIKE $36.8b
• LOUIS VUITTON $32.3b
• HERMES $18.3b
• GUCCI $18.2b
• ZALANDO $17.9b
• ADIDAS $16.2b
Brand Value(Billion)
Adidas
Gucci
Louis Vuitton
Nike
0 5 10 15 20 25 30 35 40
Brand Value(Billion)
INTENSITY OF INDUSTRY RIVALRY
The fashion industry is remarkable for its intense level of competitive rivalry in
it. There are large no of brands with similar offerings which make it a hard job
for the consumers to choose from. However some brands also drive loyalty
based on quality and features which other brand may fail to provide. Fast
fashion is the emerging area. Brands that have strong brand image are able to
attract consumers despite of their products higher prices. Still the race of
attracting new customers has grown so much that there is hardly any room for
new comers.
Overall the competition in the fashion industry is pretty much higher, brands
use the discounts, advertisements, appointing brand ambassadors to attract
large pool of customers.
THREAT OF POTENTIAL ENTRANTS
Bargaining power of the supplier refer to the pressure that suppliers can put
on companies by raising prices, reducing quality etc. Here the bargaining
power of the suppliers are not the significant forces in the fashion industry.
Mostly the suppliers are from the third world and mostly follow the set rules of
the buying brands. Brands have the bargaining power and can easily switch
from one supplier to other as they seem fit. Overall, the suppliers have little
control and therefore their bargaining power is significant.
BARGAINING POWER OF BUYERS
Bargaining power of the buyers refers to the pressure that consumers can put
on businesses to provide higher quality products, better customer services etc.
Individual customers may have very little bargaining power in the fashion
retail industry. However, there are various factors that make the customers as
a group an influential force. 21st century has handed over the switch to the
customers who are well informed, can choose from several alternatives and
can switch easily between the several brands in the market.
Brands are in race to satisfy their customer in best possible manner
technology is being utilized to improve customer experience. And in recent
times website and apps have became indispensable for the brands to reach
millions of customers.
THREAT OF SUBSTITUTE GOODS
Trade in counterfeit goods is perceived as a substantial threat to various
industries. No longer is the emergence of imitation products confined to
branded luxury goods and final markets. And it is true that the threat to
substitute goods come from within the industry. Not even a one brand ca be
assured that they can keep on selling their product to celebrity without
focusing on consumers.
From high to low end fashion industry has paved its way. Though there may
not be any counterfeit goods but substitute brands may be available from
luxury items for the rich to the affordable brands accessible to common
consumer. Even those who can not afford luxury these substitute brands can
make high end stylish available at low price.
POLITICAL FACTORS
Political factors play a significant role in determining the factors that can impact footwear industry
long term profitability in a certain country or market. The achieve success in such a dynamic Retail
industry across various countries is to diversify the systematic risks of political environment.
Government of India supports the footwear industry in enhancing its competitiveness through up
gradation and modernization by providing financial assistance.
The Government departments make several policies viz. pricing policy, credit policy, education policy,
housing policy, etc. that do have an influence on the marketing strategies. A company has to keep
track on these policies and make the marketing programs accordingly.
The Government had also approved a special package for textile sector with an outlay of Rs. 6000
crores to boost employment generation and exports particularly in Garmenting and Made-ups.
Textile and apparel sector in India have one of the most liberal investment policies for foreign
investments. Through Automatic Route 100 per cent foreign direct investment (FDI) is allowed in India.
With the arrival FDI, India increased to $55.56 bn in 2015-16, $60.22 billion in 2016-17, $60.97 bn in
2017-18 and in 2018-19 India noted its highest ever FDI inflow of $62.00 bn. Moreover, India has been
able to attract more than $74 bn investments across sectors during 2019-20.
ECONOMIC FACTORS
Economic factors have a significant impact on how an organization does
business and also how profitable they are. Economic factors include - economic
growth, interest rates, exchange rates, inflation, disposable income of
consumers, employment etc.
As following the trends as the income level rises the people tend to buy more
fashion goods. The economic scenario also started showing positive signs of
recovery leading to consumers increasing spend.
Value of the global fashion industry: 3,000 billion dollars (3 trillion dollars), 2
percent of the world’s Gross Domestic Product (GDP).
Retail value of luxury goods market: 339.4 billion dollars
Value of the menswear industry: 402 billion dollars
Value of the womenswear industry: 621 billion dollars
Bridal Wear market: 57 billion dollars
Childrenswear market: 186 billion dollars
Sports footwear market: 90.4 billion dollars
SOCIAL FACTOR
The fashion industry has not been an exception. The technological advent
has made it possible for the growth of the fashion sector. Technology has
made it easier for fashion brands to showcase their fashion trends to a
wider audience. Technology is not just a benefit to the brands but
consumers as well.
Back in the day designers would create similar designs without their
knowledge. However, with the advent of designing apps, it has become
rare for designs to be similar or to be exact. Brand outlets and Mortar
shops have always been popular. However online shops have taken the
drill. You do not have to walk into a store to get your favorite designer
shoe. Now it’s a matter of a click to make an order and a purchase.
SWOT ANALYSIS (STRENGHTS)
Include any strengths or any formulas that a company may use to gain an edge
in their brand recognition and greater reach to wide public. For example may
designers have to lines of clothing one the couture line and the other ready to
wear line for the consumer who cannot afford the high priced end products ( like
the brand louis Vuitton brand sells its product through high priced couture and
ready to wear line exclusively sold through retail target.
The fashion industry also have many other strengths like:-
• Massive institutional support for technical services, designing, manpower
development and marketing.
• Easy availability of low cost of labor.
• Tax incentives, government policies offered by the government to help
fashion industry grow.
WEAKNESS
Any unusual cost, price and degradation of quality may act as a weakness of the
fashion industry. And it might also depend upon the availability in a particular
region and the most important part is that in fashion industry keeping pace with
the changing trends everyday is must otherwise it will act against the growth of the
industry.
If your brand currently caters to a couture only market, it is missing the
diversification of two avenues of distribution, a weakness for all but the most
established brands – Chanel.
Here are some other weakness:-
• Low level of labor productivity due to inadequate unskilled labor
• Uneconomical size of manufacturing units, little brand image, lack of fresh
investment in the sector and delayed deliveries.
OPPORTUNITIES
Look at the politics of each region, both in itself and in relation to the U.S., to
identify opportunities. Watch for the repeal of trade embargoes, a new or
newly accessible source of raw materials, such as fabric or thread, or a newly
green source of raw materials like sustainable natural fabric fiber.
• Use of information technology and decision support software to help
eliminate the length of production cycle.
• Growing fashion conscious globally, there is a lot of scope for diversification
into other products.
• Growing international and domestic markets and exposure to newer
markets through Fairs/BSMs.
• Aim to present the customer with new designs.
THREATS
Lacking behind the trend which is at peak at the present time is the most
important threat for the fashion industry. Politics and economies are primary
sources of threats to a brand in the fashion industry. Trade embargoes,
political unrest in an area of raw material supply and economic downturns that
lead to restricted consumer spending are all threats to the accessibility of raw
materials, brand exposure and name recognition, distribution and consumer
purchasing.
TRAITS OF ENTREPRENEUR
(BERNARD ARNAULT)
• He is the chairman and chief executive of LVHM Moet Hennessy-Louis Vuitton
SE, the world's largest luxury goods company. Arnault is, as of 19 September
2021, the third-richest person in the world, with an estimated net worth of
US$178.4 billion. In January 2021, LVMH completed a deal for American
jeweler Tiffany & Co for $15.8 billion, believed to be the biggest luxury brand
acquisition ever.
• LVMH spent $3.2 billion in 2019 for luxury hospitality group, Belmond, which
owns or manages 46 hotels, trains and river cruises.
• His father made a small fortune in construction; Arnault got his start by
putting up $15 million from that business to buy Christian Dior in 1985.
• Four of Arnault's five children work in corners of the LVMH empire: Frédéric,
Delphine, Antoine and Alexandre.
TRAITS