Marketing and Key Competitive Advantages
ORTER’S 5-FORCE ANALYSIS OF THE SPORTSWEAR APPAREL INDUSTRY | | POTENTIAL ENTRANTSMINIMUM High economies of scale required (High capital requirement). Industry dominated by huge companies likes Cheetah and Hing Yiap which both have economic advantages of durability in market. Brand identity easy to create but hard to maintain in competition with “powerhouse” brands such as Cheetah and Antioni. Greatest access to suppliers of raw materials and efficient distribution channels High switching costs. | |
SUPPLIERSMODERATE POWER Low concentration of suppliers Huge number of buyers High switching costs as there is contractual obligation. Large availability of substitute. Suppliers can integrate forward. Close relationship with suppliers | |
THE INDUSTRYHIGH DEGREE OF RIVALRY Small number of local competitors. Marketing strategy must be good to face high competition,. Eg. Promotion Low product differentiation - Only design and colour are provided as basis for differentiation. They are mainly relying on branding and marketing efforts to differentiate products within the market. Exit barriers from industry are moderate due to restrained fixed costs, capital investment and inventory. | |
Threat of New Entrants | |
BUYERSLOW POWER Buyer concentration is low. Large volume of customers and buy in low volume. Switching costs between brands low. Low brand loyalty. Low product differentiation. Low threat of backward integration. | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | SUBSTITUTESHIGH SUBSTITUTE PRODUCTS High degree of substitution. Eg. International brands and imitated brand of sportswear High switching cost for international brands and low switching cost for imitated brands. | | |
Key competitive advantages for Cheetah Strengths | Weaknesses | Market Leadership: 40% market share Early-entry in Malaysia (local sportswear): Cheetah brand was
SUPPLIERSMODERATE POWER Low concentration of suppliers Huge number of buyers High switching costs as there is contractual obligation. Large availability of substitute. Suppliers can integrate forward. Close relationship with suppliers | |
THE INDUSTRYHIGH DEGREE OF RIVALRY Small number of local competitors. Marketing strategy must be good to face high competition,. Eg. Promotion Low product differentiation - Only design and colour are provided as basis for differentiation. They are mainly relying on branding and marketing efforts to differentiate products within the market. Exit barriers from industry are moderate due to restrained fixed costs, capital investment and inventory. | |
Threat of New Entrants | |
BUYERSLOW POWER Buyer concentration is low. Large volume of customers and buy in low volume. Switching costs between brands low. Low brand loyalty. Low product differentiation. Low threat of backward integration. | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | SUBSTITUTESHIGH SUBSTITUTE PRODUCTS High degree of substitution. Eg. International brands and imitated brand of sportswear High switching cost for international brands and low switching cost for imitated brands. | | |
Key competitive advantages for Cheetah Strengths | Weaknesses | Market Leadership: 40% market share Early-entry in Malaysia (local sportswear): Cheetah brand was