SWOT Analysis

HS
ing disposable
OPPORTUNITIES
incomes of the people
onscious
•Increasing
customersdemand for luxury brands from the middle class
ility •Research
of cheap and
finance
new product development can help the companies to
domestic
• market , increase in number of malls

THREATS
ESSES •Increased competition in the domestic ma
ominance of unorganized sector
nological obsolescence in the••Cheaper imports
supply chain
Changing Government ’ s policy on FDI
 Key Business Models for
Provogue
Manufacturing Stage Distribution Stage Branding Stage

Brand Owner may provide designs and / or raw materials

Outsourcing Manufacturing Distribute through own stores

Brand Name
Own Manufacturing

Distribute through multi brand ou

Sell to a brand owner or Purchase brand
 Distribution Strategy
D istrib u tio n C h a n n e ls

to re s / E x clu siv e B ra n d O u tle t R e ta ile rs

D isco u n t S to re s D istrib u to rs

E x p o rtsM u lti – B ra n d O u tle ts o r S h o p p in g

 Distributions Channels
• Owned Stores / Exclusive Brand
Outlets
• Advantages
•–direct medium of selling apparel

•–high realization for the garment sold

•–end-user feedback and knowledge of their preferences

• Disadvantages
• –requires greater advertising expenditure
• –greater fixed costs
•
•

•
•
 Distributions Channels
• ‘Multi-Brands Outlets' or Shopping
Malls
•

• •Organization sells apparels to multi-brand outlets, which in

turn sell them through large retail space
•

• •MBO’s are located in prime locations of the various cities and

towns ensuring maximum reach
•

• •MBO’s are chain of shopping malls having a presence in

more than one location
•

• •Realization from this channel is lower than those earned by

selling to the retailers; as MBO’s keep higher margins
because their costs are higher

•
 Distributions Channels
• Distributors
••This channel involves two middle agencies between the
seller and the end-user
••Organization sells it to the distributor, who in turn sells to the

Retailers or MBO’s
••Realization from this channel are low

• Discount Stores
••For selling apparels at lower prices to attract larger volumes
••Used for selling apparels with minor defects or for selling

slowmoving stocks
••Low realization from this channel as garments are old-

fashioned or sold at low prices for gaining big volumes

•

•
 Distributions Channels
•
• Retailers
••Company sells garment to Traders or Commission Agents
••Greater reach of the distribution channel

••Creation of a middle agency between the organization and

the end-user
••Lower realizations from this channel

•
 Distribution Channels
HIGH
Higher realizations than selling through distributors
R e tu rn s

ations, but lower advertising and fixed costs

MEDIUM

High realizations but advertising and fixed

LOWAdvertising and fixed costs are lower

D istrib u tio n C h a n n e ls
Porters 5 Force Model
 Porters 5 Force Model
• Bargaining power of customers
Ø Majority of the buyers are individual consumers
Ø With emergence of new brands consumers have vast range
of garments
Ø India’s consumer profile is getting younger
Ø Economy of the country is improving so is the income level
Ø With increase in disposable income, the size of India’s
middle class is also improving.
Ø Co – existence of different players in the market tends to
lower customer switching costs.
Ø
 Cont…
• Bargaining power of Suppliers
Ø Key suppliers are apparel manufactures, wholesalers and
raw material suppliers
Ø Suppliers are mostly small to medium sized enterprises
Ø With option to choose number of retailers rise in raw
material and inventory costs are also a threat.
Ø Since the cost of human labour is low, the supplier of man
power have strong supplier power
Ø The overall supplier power is moderately high in this sector

•
 Cont…
• Threat of new entrants
Ø Industry is attracting national and international players to
step up in the arena.
Ø There are diverse product lines, so product differentiation
provided by new entrant is high
Ø Entry into industry requires low capital outlay so it is a
growing stage which in turn eases up setting up
individual retail stores.
Ø Low switching cost of the customers implies they can
anytime easily switch from existing to new entry
Ø So entrance of new player in the market is high
•

Ø
 Cont…
• Threat of substitute products
Ø Purchases can be from manufactures, custom made
garments and online sales.
Ø The option of tailor made is cheap but due to many options
available, customers prefer retailers to fulfill their
shopping needs.
Ø Thus overall threat from substitute is low.
 Cont..
• Competitive rivalry within industry
Ø The industry is quite fragmented
Ø The low fixed costs, operational and maintenance costs
make it easier for new player to enter into the market
thus intensifying rivalry
Ø Due to changing trends in style and fashion, it is highly
diverse with respect to product assortment and product
width
Ø Major player tries to attain customers by competing on
price, quality, product width and depth, designs, store
ambience etc.
Ø All these factors make overall rivalry high