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Five Forces Analysis for Surfstitch

In: Business and Management

Submitted By jemmaa
Words 446
Pages 2
Industry Analysis (Porter’s five forces)

Threat of new entrants
Threat of new entrants is very high in online fashion retail industry as the following reasons:
The industry has low barriers to entry. People who want to start the business do not have to own a large amount of capital or a physical store. People do not have to build their own brand or factory. One thing needs to do is contact to suppliers of products and then build your website to display products, and then you need to tie up with the express company to decide how to deliver your products to your customers. The last thing you need to do is tie up with online payment provider.
The industry presents an upward trend. The money Australians spend online is projected to increase by about $10 billion within the next five years. (Metrics, 2016) More people would like to start in this industry, and no one would like to miss this huge opportunity.

Threat of substitute products
Threat of substitute products for online fashion retailer is low. The reasons are that:
One main substitute for this industry is the physical store. However, there are an increasing number of people choose to shopping online. This is because shopping online can save your time, money and energy. What’s more, it is more convenience for consumers to compare products on the Internet. Under the help of smartphone and WIFI, people can do shopping online anytime, anywhere.
The product’s quality actually is almost same as you buy from physical stores, and online stores would offer more discounts to attract customers.

Bargaining power of buyers
Buyers in this industry are customers who purchase goods online. People search in the Internet can know many similar online stores. Customers will have many choices when they shopping online. What’s more, it is very easy and no cost when customers want to switching online store from one to…...

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