Premium Essay

Padini Porter 5 Forces

In: Business and Management

Submitted By ahwenx
Words 668
Pages 3
1. Threat of new entrants – high.
Malaysia is becoming an important expansion base for Western retailers. Even as big retail brands and labels focus their attentions on the emerging markets of China, India or even our ASEAN neighbors, they too have seen it fit to establish a presence in Malaysia as well. Increasingly, Malaysia will see more international retailers venturing into the market directly as opposed to via the traditional gateways of Hong Kong and Singapore. In the past year itself, there has been an influx of international brands, which compete on the same playing field as Padini, the most recent being Japanese behemoth Uniqlo and Swedish fashion retailer H&M, which have opened their flagship stores in the Golden Triangle. We believe that given the growing size of the pot, the main barrier to entry would be with regards to the prime retail space which is getting scarce.

2. Bargaining power of buyers – high.
The rising income levels, better education and greater access to a variety of brands and labels have resulted in a class of consumers more sophisticated in their needs and preferences. Where customer loyalty is of the utmost importance, retailers have strived to attain superior customer responsiveness by employing various methods of advertisements and promotions, loyalty programmes, as well as to increase customer’s perceived value of a brand. Brands catering to this expanding group of consumers have become numerous but more often than not, these brands pay more attention to the pricing strategies than to the perceived quality of the products under their brands. As a result, many brands fail rather than thrive.

3. Bargaining power of suppliers – low.

As with the trend in the fashion retail industry, Padini designs its garments while outsourcing the manufacturing operations to OEM manufacturers. Knitwear and graphic Ts are...

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