Sunday, June 16, 2019

Gap Case Study- Analysis current strategy Essay

Gap Case Study- Analysis current strategy - Essay Example45). The demographic trend include factors like the number of target consumers, age mix, distribution of people across target geographical areas, population composition by ethnicity and trends in income within target market. These factors brook significantly remained constant for the industry, except income distribution that could have been caused by the economic recession in the year 2009. The industrys target market that defines its geographical environs is also global due to regional and international trade. Its economic environment is however variable and depends on factors such as interest rates, splashiness rates and recession (Ireland, Hoskisson and Hitt, 2008 Thompson and Strickland, 2009). The industry is also significantly influenced by political factors that include legal systems and governmental agencies that protect consumer interests and include legislations and regulatory bodies and sociological and heathen factors such as general attitudes, health concerns, and cultural beliefs among the target market that significantly affect the industry and are particularly influenced by morality, taste, and preferences. Industrial operations dependence on technology for production and marketing also identifies technological trend as a factor to the family clothing industrys environment besides globalization that facilitates international competition (Ireland, Hoskisson and Hitt, 2008). Porters analysis of the industrys free-enterprise(a) forces The industry operates in a free competitive market. Its competitive forces can be explored through the Porters approach of that identifies threats of new entrants, bargaining power of suppliers, competitors, bargaining power of buyers and threats of substitute products or serve (Henry, 2008, p. 71). Threats to new entrants into the industry are weak because of the nature of the industry that includes established participants with consumers retention stra tegies. One of the factors that make it difficult for new entrants is the stigmatisation strategy that name players have adopted. With five major firms in control of the market and their established branding efforts, consumers have developed preferences and are reluctant to try products from new firms. As a result, inability to penetrate the market discourages voltage new entrepreneurs and those that venture into the industry do not exert significant pressure on real market players, especially the major players. The small profit margin factor in the industry that requires economies of scale for sufficient profitability is another factor that regulates potential new entrants into the industry, as small-scale ventures are largely unprofitable and new firms finds it difficult to command a large percentage of the market. Developed preferences through branding also ensures consumers strictness on supply chains or outlets from which they acquire brand commodities, as new channels and o utlets are treated with suspicion. This preserves vivacious participants position in the industry (Thompson and Strickland, 2009 Henry, 2008). Buyers bargaining power is another factor in the Porters forces model. It defines the collective ability of a group of buyers or a single buyer to dictate relations with an enterprise in sales terms such as prices and other terms and

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