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Strategic Management through Market

Analysis

Dr. Nancy Agnes, Head, Technical Operations, Tutorsindia info@ tutorsindia.com

Keywords: Strategic Management Assignment

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I. INTRODUCTION

According to strategy, everything would revolve

around the market environment and entities that are

outside the scope of an organization like;

prominent organizations like local and national

governments, customers, suppliers as well as

competitors1. Strategists in the past have agreed

and accepted that acquiring information about the

competitive environment in a market could prove

to be a vital element that allows the development of

strategic management. It is not just essential but it

is also logical to study the environment in the

market for an organization, mainly keeping three

reasons in mind. One main reason would the

several organizations competing with each other2.

The second reason would be that many

organizations would anticipate threats and

opportunities wherein they are required to control

threats and explore opportunities3. The third reason

being that there could be opportunities within

networking or linkages that could lead to

sustainable cooperation. In order to acquire a

detailed knowledge about the competitive

environment, it is imperative to execute a Porter’s

Five Forces analysis4.

Keeping these factors in mind, this report would

attempt to execute a Porter’s Five Forces analysis

for an apparel manufacturer (XYZ) that is keen to

enter the high end apparel segment in India.

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Porter’s Five Force Analysis

II. BARGAINING POWER OF SUPPLIERS

Every organization has their own raw materials or

services suppliers. In the garment sector, the

bargaining power of supplier is relatively low,

keeping in mind that a large number of suppliers

traditionally are made up of apparel manufacturers

who venture into new markets to safeguard their

businesses from other competitors that can eat into

their profits. In the case of XYZ, bargaining power

of suppliers would be less as it is a product that has

been initiated by XYZ which already has a

presence in India and they would be having their

own tie-ups and networks.

III. BARGAINING POWER OF BUYERS

As far as XYZ is concerned, buyers would be

having a superior level of bargaining power as the

business model of XYZ is buyer-centric. As a

result, XYZ would naturally be very sensitive to

any manner of qualitative or quantitative

modifications in terms of demand by buyers.

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IV. THREAT OF NEW ENTRANTS

While evaluating the competitive environment for

XYZ, an aspect that has come out very clear is that

they will be confronted with threat on the part of

new entrants that make a foray into the market in

India. Many global fashion houses are now making

an entry or have already entered into the high end

apparel segment across the world which presents

the threat of competition to XYZ. With

technological breakthroughs occurring almost

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every day several garment manufacturers are keen

to tap the high end fashion segment globally.

Therefore, threat of new entrants is high.

V. THREAT OF SUBSTITUTES

There has been an increasing interest in terms of

trying out something really new and innovative

than what is presently available in the market.

Therefore, there is every possibility that the apparel

products that XYZ intends to offer might be

provided by another apparel manufacturer. For

instance, if XYZ plans to sell a pair of high-end

denims for Rs.5000/- in the Indian market however,

if a similar type of denim that offers the same

fitting, same level of comfort as that of the XYZ

denim, is available to customers at comparatively

cheaper rates for example – Rs.3,500/-, the

customer will not think twice before making the

switch to a product being offered by a competitor.

Therefore, XYZ does face high level of threat from

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VI .COMPETITIVE RIVALRY

When XYZ enters into the high-end fashion

segment within the Indian market, they will have to

deal with other global industry players who already

have a presence within the Indian market. These

would include; Dolce & Gabbana, Yves Saint

Laurent, Versace, Tommy Hilfiger other than the

indigenous fashion houses such as; Manish

Malhotra, Rohit Bal etc. However, each of the said

industry players serve a different clientele for

instance, D&G, YVL, Versace and Tommy

Hilfiger serve the super-rich clientele while

indigenous brands serve the next level of

customers. XYZ on the other hand focuses on

capturing a share of market segment that is

presently dominated by indigenous brands.

Definitely, competitive rivalry would be high

considering the number of already existing

established players.

VII. CONCLUSION

This report has executed a Porter’s analysis for a

high-end fashion giant ‘XYZ’ that is keen to enter

into the fashion segment in India. On the basis of

the analysis, it has emerged that the market

environment for XYZ in India is just right. Tutors

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REFERENCE

1 https://www.amazon.in/Exploring-Strategy-

Cases-Gerry-Johnson/dp/1292145129 1 https://www.amazon.in/Strategic-Management-

Richard-Lynch/dp/1292064668 1 https://faculty.wharton.upenn.edu/wp-

content/uploads/2012/05/Concept-of-Strategy-40-Years-Later-Introduction_1.pdf 1

https://hbr.org/1979/03/how-competitive-forces-shape-strategy