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Six forces analysis Retail industry : : - Coggle Diagram
Six forces analysis Retail industry : :
Industry competitors
Level of competition: High
Unconcentrated market share
Distribution of market shares between many small competitive players
Industry growth rate with no new products make it hard to differentiate
High fixed costs in retailer and manufacturing
Exit barriers can be costly. Costs related to investments made in expansions of retail industry
commodification of the product
Suppliers
Level of concentration: low. Many suppliers of the same product
Switching costs: low. Retails can switch suppliers at their convenience
Low information asymmetries
Low possibility of competition threat
Low proportion of the cost of the product/service
Buyers: (consumers and merchants)
Low level of concentration
Switching costs are very low. Merchants might have additional costs (e.g., shipping)
Possibility of competition threat (e.g., lack of product differentiation)
Potential entrants: (e.g., online retailers)
Ex-ante
Exogenous
Medium to high investments in manufacturing facilities, physical retailers
Barriers posed by governments regarding imports and exports (e.g., contain the covid-19)
Endogenous
Investments in research and development of textile substitutes (e.g., Pinatex)
High investments in marketing (e.g., loyalty card)
Experience developed by incumbents (design, trends)
High control of supply and/or distribution channels
High investments to reach larger scales
High investments in developing experience (service delivery)
Ex-post
Possible use of predatory pricing
Risk of tightening control on supply or distribution channels
Low risk pf litigation
Substitutes: other clothes replacement
Buyers' propensity to substitutes (e.g., replace sportswear with other clothes like coats or something more personalised)
Price-performance ration can determine the threat of the substitutes
Complements:(service experience or clothes complementary)
Many retailers capitalise on service delivery
Product commoditisation