Example for Porters five forces: fictionary loungewear industry called ‘Sosleeve’ The loungewear industry is mature and there is no decline in this industry. People need it at home and sometimes for also leaving the house, doing grocery shopping, going on walks etc. Let’s assume that the expected growth by 2022 is 200 billion dollars. Factors that positively influence the market are style and fashion trends, economic growth and the unstoppable globalization. In the life cycle the industry would be currently at the Maturity stage. If we look at the competitors we could say that could be Lululemon, ASOS, SKIMS and Free People. Asos owns for example several other brands and its possible that thousands of other firms are competing at a local level. The threat of new entrants is relatively low because new competitors are not likely to imitate established players within the industry.
The company has invested billion dollars in marketing communication and we can clearly see that the brands are global. A new entrant has to spend a high amount of money to compete in the market which means that they have to invest in human capital which is not easy. That means that the entry barrier is not easy to enter. New brands would have an easier task if the only way is to compete at a local level because then you only need a limited amount of resources and additionally, it is easier to get access to distribution channels who are local. If the company wants to act as a global player it should enter smaller niches of the market connected with smaller investments.
Inhaltsverzeichnis (Table of Contents)
- PESTEL Framework
- Political
- Economic
- Social
- Technological
- Environmental
- Legal
- Porter's Five Forces
- Threat of New Entrants
- Bargaining Power of Suppliers
- Bargaining Power of Buyers
- Threat of Substitute Products or Services
- Rivalry Among Existing Competitors
Zielsetzung und Themenschwerpunkte (Objectives and Key Themes)
This document aims to provide a comprehensive overview of the PESTEL framework and Porter's Five Forces, two widely-used tools for strategic analysis. The objective is to demonstrate their practical application in understanding the external environment and competitive landscape of businesses.
- External Environment Analysis
- Competitive Advantage
- Industry Structure and Dynamics
- Strategic Decision-Making
- Market Analysis
Zusammenfassung der Kapitel (Chapter Summaries)
PESTEL Framework
This section introduces the PESTEL framework as a strategic tool for analyzing the external environment. It details each of the six components: political, economic, sociocultural, technological, environmental, and legal. The document highlights how these components influence industry opportunities and threats, which can be further analyzed in a SWOT analysis.
Porter's Five Forces
The chapter delves into Porter's Five Forces, a framework for analyzing the competitive environment. It outlines the five forces: threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products and services, and rivalry among existing competitors. The chapter explores how the strength of these forces impacts an industry's profit potential, making it more or less attractive.
Schlüsselwörter (Keywords)
Key terms and concepts discussed in this document include PESTEL framework, Porter's Five Forces, external environment analysis, competitive advantage, industry structure, industry dynamics, threat of new entrants, bargaining power of suppliers, bargaining power of buyers, threat of substitute products or services, rivalry among existing competitors, SWOT analysis, and strategic decision-making.
- Quote paper
- Talisa Gassmann (Author), 2022, Strategic Management. Fundamentals with practical examples, Munich, GRIN Verlag, https://www.grin.com/document/1421023
