Penshoppe Porters Five

PORTER’S FIVE FORCES: PENSHOPPE

Threat of Substitute (HIGH)

Bargaining Power of Suppliers (WEAK)

Competitive Rivalry (INTENSE)

Threat of New Entrants (LOW)

Bargaining Power of Consumers (STRONG)

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

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 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.