Sunday, February 23, 2020

Porter's Five Forces of Burberry Assignment Example | Topics and Well Written Essays - 500 words

Porter's Five Forces of Burberry - Assignment Example The most common barrier that may be faced by new entrants include; cost of entering this industry is very high given the fact that there has been new technological advancement. Secondly, Burberry tends to have cost advantage and well established channels for distributing its products. The cost advantage may acts as a major entry barrier to the new firms. Further, Burberry has well differentiated products such as; Trench coats that its competitors may not be able to emulate. However, fashion industry tends to be very dynamic. This means that entry barriers are low and therefore, Burberry should work to increase internal and external strength to compete with new entrants more efficiently and effectively (Totallyan, 2011). Burberry Company need to have numerous suppliers than it has currently. There is a need for the company to have numerous suppliers so that incase one supplier fail to deliver raw materials for manufacturing fashion products another supplier may be contacted. This may help to reduce loses emanating from prompt delivery of raw materials. In addition, having numerous suppliers may ensure that there is seamless flow of products into the fashion market (Merrill, 2008). In this case buyer’s power is relatively high in the fashion industry under which Burberry is operating. This is because the numbers of large players are increasing making it possible for buyers to switch into brands produced by other companies. However, most of the new entrants do not have differentiated products as compared to Burberry Company. This provides Burberry a competitive advantage over its competitors because of customers brand loyalty. In addition, the buyers are well informed about the products produced by Burberry. This tends to influence their power. Moreover, economic forces such as inflation may affect buyer’s power whereby, during inflation buyers power tend to be low as they become more sensitive to higher price changes (Kotler, Keller, and Lu