Porter’ s five Essay
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Padini is currently facing the highest level of rivalry from its competitor due to a large number of competitors operating in the same industry as the company. Nowadays, more of the company has expanded its scale in order to rivalry fit. Many companies now are more advanced in terms of scale, they will have to compete for the similar products and services such as brand image, customers’ loyalty, and other factor.
This would cause in a high competitive rivals and a threat for Padini Holdings Bhd, they face rivalry from Zara Holdings Bhd, and Esprit Corporation Bhd.
Therefore, Padini can have competitive advantage as keep innovating and satisfying their customer’ expectation. Due to the rivalry among existing competitor would lead to PADINI sales volume decrease. As the result, PADINI facing high treat of rivalry among existing competitor.
3.2 Potential entrants
In the point of changing in consumer preferences and behavior in the social factor has cause to high threat of new entrants.
According to Antonio Centeno, he said that people pay attention to their basic appearance every day, people realize that clothing not only is the primary instrument in creating a positive first impressions but also can increases people perceived status among their peers.
Due to the changing in consumer preferences and society, there are growing number of competitor entrance into the market such as Zara. In brief, this would cause the PADINI marker share decrease so that PADINI faced high threat of new entrance.
3.3 High Bargaining Power of Buyers
The industries in which Padini facing high competition will lead to the bargaining power of the consumer become higher. Because of the low switching cost, most of the consumers are increasing their awareness in the fashion retailing industry become higher. If the quality, and service offered are not satisfy on customer, they will support its competitors and purchase from them.
On the other hand, they can influence fashion and trend. Because of the high bargaining power of buyer lead to PADINI profit reduce. As the result, the high bargaining power of buyers will bring high threat to PADINI.