Firstly, let us analyse the industry with respect to the threat of new entrants. It seems that for a new industry, there are potential new entrants that wish to enter the industry. However, there are various threats to a new entrant to restrict their entry into the industry. For the fast fashion industry, the potential threats can be huge capital requirements which product differentiation because there are already too many players dominating in this industry. The second factor is the threat of the substitutes. It is analysed that the threat of substitutes for the fast fashion industry may be in the form of buyer propensity to choose alternate brands for a lot of factors. These may be the need for better sizes or a variety of colours. There is always an increasing demand of products available at lower prices. Promotional offers are circulated by different brands every now and then. Hence, relative price performance of other brands can be a major threat for the other brands since customers might be more attracted to choosing and buying products during discount offers, sales or other promotional offers. Slashed prices which clubbed with other attractive offers can draw the attention of even loyal customers easily to choose another brand. In the times of cut throat competition, it is almost an impossible task to create brand loyalty (Porter, 1979).
The third factor to be considered is the bargaining power of customers. It is defined as the ability of customers to put pressure on a firm. It also affects the sensitivity of customers to price changes. In the fast fashion industry, the customers have a much higher bargaining power since they have a plethora of alternatives to choose from. Also, attractive offers and a large number of substitutes give additional power to the customers to choose from. The next factor to be considered is the bargaining power of suppliers. The supply of labour, components, raw materials and special services like expertise, can be a major source of power to the firm if the market has fewer substitutes. However, this is unlikely for the fast fashion industry because there are countless alternative brands in the market and hence the customers have high bargaining power. Thus, a large number of substitutes in the market give to the customers to choose their products. The last factor in Porter’s five force model is the industry rivalry. In today’s times, the fast fashion industry is severely affected by this factor. There is so much competition between online and offline companies in this industry. The level of advertising expenditure is very high. This is due to the high competition presented in the market. In addition, firms have to deal with the constant need of customers to change and be in-line with the latest trends and fashion in the market. Thus by looking at Porter’s five force analysis of the fast fashion industry, it is seemingly interesting to deduct that the industry is in huge demand in today’s era. It is one of the most booming industries of today. Nevertheless, with high demand, a lot of factors which have to be in place for a new entrant to enter in this industry are involved. The huge amounts of capital required in this business and the constant need to be in line with the latest fashion as it changes some of the biggest hurdles to enter this industry. This is because fashion is a fad and changes quickly. Hence, brands need to be constantly in line with the latest fashion to be a good market player. This is the five force analysis of the fast fashion industry in brief (Porter, 1985).
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