Porters Five Forces on Retail Industry Essay
Porters Five Forces on Retail Industry
Five forces Model
1) Suppliers power
2) Buyers Bargaining Power
3) New Potential Entrants
4) Threat of Substitutes
5) Industry Competitors
1) Suppliers power
A segment is unattractive if the company’s suppliers are able to raise prices or reduce quantity supplied Ss in apparels section have major brands like, Arrow, Levis, lee, Provogue, Pepe, loues Philip, Zodiac
2) Customer Buying Power
The bargaining power of customer at SS can be a weakness if customer shift to substitutes.There are various other brands which could act as a substitute to SS for eg: Zodiac, Raymonds, Color plus, and Arvind Mills
3) Industry competitors competitors like Globus, Westside and Lifestyle, Wills Lifestyles, Rpg ,Pantaloon who catered to the same segment of customers, entered the market.
4) New potential entrants
Preferred Partner for Foreign Players
SS is the preferred partner/retailer for foreign brands entering India. The company has already signed an agreement with UK retailer Mothercare to retail their products. The company has tied-up Estee Lauder’s MAC brand of cosmetics with one strongly performing outlet opened so far. SS has also tied up with Austin Reed for both manufacturing and retailing its brand in India. We expect many more opportunities for similar tie-ups, particularly as the government has allowed up to 51% FDI in single brand retailing.
Shoppers’ Stop has 4 division the Men’s apparels, ladies apparels, kids wear and the Non-apparels. Following is their contribution to the turnover.
* Men’s 43% of sales
* Women’s 18% of sales
* Kids 8% of sales
* Non-Apparels 31% of sales
SS LOYALITY PROGRAMES
SS PIONEERED INDIA’S first loyality programes
They have 3 tier loyality programme 1) classic moments for entry level 2) silver edge 3) golden glow, members fall in different cateogory dependimng on theior spends with the company, they also receive reward points which they can redeem later on.