Fashion industry is one of the very most flourishing and profitable companies of the world. The development of globalization has resulted in better penetration of fashion in to the mind of people. Mega fashion shows are being placed in many nations across the world which has made considerable interest among the individuals. The present study handles the style industry of UK. The choice of the nation assumes significance as it is one of the greatest fashion hubs of the world. The nation also houses a few of the most popular brands in the style industry. A report conducted by research organization 'Grail' places UK as among the most notable hubs in the global fashion industry along with USA, France, Italy and Japan. London Fashion Week which happens to be the most significant fashion related event in the nation is the one fashion event that promotes works done by students thus highlighting its commitment and existence in the global fashion industry. Prestigious awards like 'River Island Platinum Prize' have their origins in UK (Grail Research, 2009, p. 6, 8). Today's study would give attention to the industry examination of the fashion industry especially that of the UK market. The record would include an industry analysis along with the analysis of the competitive framework prevailing in the united kingdom market. Subsequently the main element success factors and strategic categories would be analyzed in the article. The record would also feature examples of the strategies that have been used by the marketplace leaders to continue their sustainability in the industry.
Fashion industry includes designer homes, retail chains and the businesses involved in the production of apparels. A written report shared by Levis Strauss & Co has pegged the value of the global fashion industry at US $ 1334. 1 billion as on 2008. The record also predicts a northward craze for this shape in the next years. Apart from being a style statement, fashion also generates creativity, wellness and identity. The record also claims certain shortcomings of the industry which mainly includes aspects like poor working condition of personnel on the market, wastage of resources and also encouragement of unrealistic intake. Certain other shortcomings include unavailability and high prices of raw materials which also emerge as a significant challenge for the firm's engaged in production of fashion apparels around the world. Numerous opportunities also exist for the industry from the growing marketplaces like India, China, Brazil and Russia which have started appearing as fashion hotspots of the world (Levis Strauss & Co, 2010, p. 5).
UK has been on the list of pioneers in the global fashion industry whose association with the world of fashion dates back to the 1960's popularly known as the "swinging sixties", the "punk and passionate 1970's" and "Cool Britannia Image" of 1990's. Present get older designer label brands like Vivienne Westwood, Burberry and Mulbery, to name a few, are some of the numerous brand names housed in the country (English Council Fashion & Oxford Economics, 2008, p. 9).
A recent development seen in the industry is the fact that the nation is shifting from your home based manufacturing systems to sourcing products from international retailers. This has been related to the areas of high labour costs in conjunction with the surge in prices of recycleables which has compelled manufacturers to outsource their creation units to countries like China which give you a significant pool of talented resources and raw materials at cheaper rates (Uk Council Fashion & Oxford Economics, 2008, p. 16).
UK is one of the pioneers in the style industry, and the country is approved with numerous improvements on the market segment. A research research conducted on the style industry in UK states that consumer shelling out for fashion apparels in UK noticed a growth rate of 6. 5 percent in '09 2009 with sales numbers reaching 2. 5 billion Pound. Among the major market players in the united kingdom market Newberry reported 19. 1 percent expansion on an annual basis. The progress of fashion industry has been fuelled by large degrees of spending by the local people. During the last ten years spending levels of individuals have grown up by approximately six percent on a genuine term basis. The style industry also offers made significant contributions to the overall economy of the nation. In the entire year 2009, the industry is thought to have contributed approximately 20. 9 billion pounds into the economy of UK which forms about 1. 7 percent of the total GDP body of the nation. Retailer GVA by themselves has contributed roughly 6. 5 billion pounds into the market of UK. Indirect efforts to the economy include providing employment options to about 816, 000 individuals in a primary or an indirect manner. This number symbolizes about 2. 7 percent of the total workforce in the country which highlights the growth and need for this sector for the economy of the country. On the standalone basis i. e. , excluding the employees at the retail stores, the sector employed about 155, 000 individuals or about 0. 5 percent of the total workforce located in the nation. The fashion industry is also one of the major contributors to the nation's exchequer with contribution information varying about 13. 2 billion pounds which stands at 2. 6 percent on complete percentage conditions. These contributions have mainly result from VAT and through the income tax paid by the employees involved in this industry (Uk Council Fashion & Oxford Economics, 2008, p. 14).
The magnanimity of the fashion industry can be adjudged from the actual fact that the contribution of fashion industry towards the GDP of the nation is significantly greater than chemical and posting industry. Fashion industry is the fourth major employment specialist in UK and comes only next to travel and tourism, telecommunications and real estate (English Council Fashion & Oxford Economics, 2008, p. 20). This implies the huge probable of the fashion industry in UK. The next chapter would provide an research of the competitive platform prevalent in the UK market.
Competitive framework for any industry can be analysed by using Michael Porter's five makes framework. The examination of a market using the platform proposed by Porter helps a business to analyse the marketplace probable of other players in the market. This helps in generating ecological competitive benefit for the businesses. According to this platform, the competitive framework can be analysed by using five factors specifically,
- Bargaining Ability of Suppliers
- Bargaining power of Consumers
- Competition from existing players
- Threat of new entrants
- Threat of substitutes (Haag, 2007, p. 72)
Suppliers have a higher barraging vitality when the raw materials can be purchased in scarce quantities. In addition, it rises when the number of suppliers for a particular product or natural materials is quite limited. In case there is fashion industry, suppliers constitute of sellers who provide fresh material like cotton and other textiles which provide as raw material for apparels. The UK fashion market is characterised by the presence of a few suppliers which is normally anticipated to high costs of recycleables. The suppliers also use traditional methods which again enhances the price tag on goods sold (Karra, 2008, p. 27). High cost of real estate also will serve as a significant source of matter to the fashion retailers. This research means that suppliers have a fairly high bargaining ability. Market leaders in UK have started outsourcing their making departments to sellers based in countries like China and India where cheap natural material is present at affordable cost of labour (PricewaterhouseCoopers, 2004, p. 2).
Bargaining electric power of consumers arise when the market is characterised by the existence of several players who have a large product line. Presence of large numbers of competitors places consumers in the driver's chair as they have got numerous options. Today's status of the buyer market in UK discloses the occurrence of lot players. Most of these players have high brand beliefs products to suit every type of customers. This gives ample selections for the consumers. Hence it can be figured consumers have a higher bargaining power in the united kingdom market.
Major players in the market like Grades and Spencer, Austin Reed have started out providing value added services to consumers to woo them with their stores. Celebrity campaigns have also been used to focus on consumers like Lane Crawford roping in supermodel Maggie Cheung because of its promotions.
UK is characterised by the presence of large number of global players like Grades and Spencer's, Next, Arcadia, Matalan and Bhs which have formidable brand image and an impressive product line to target consumers. Competition is available in nearly every segment of the target market. Therefore that competition from existing players has a significantly high impact on the fashion industry in UK. Market leaders have formulated plans that have a tendency to get the consumers in favour of their brands. Fierce competition has prompted leading market players to vouch for newer locations like for example Grades and Spencer's eyeing the Indian market.
New entrants do not create sufficient dangers to the existing players. This is due mainly to the actual fact that today's market in UK is totally saturated with big brands like Markings and Spencer's, Next etc. In addition, high cost of building a company deters new players from coming into the UK market. This implies that new players don't have significant capacity to challenge the existing players.
Substitutes are those products that have attributes that are highly similar to the original products. The client segments of companies like Markings and Spencer's are highly area of interest in aspect and are unlikely to change to substitutes which in essence constitute reasonably priced products. Hence it can be figured substitutes do not present significant threats to the existing players present in the market.
The key success factors for the fashion industry are mentioned below:
- Government support
- Customer Awareness
- Ability to generate continuous innovations
Government support is an integral component in the success of the style industry. Pro productive policies by the federal government favour the introduction of new players as well as raise up the existing players by creating market conditions that tend to provide increased value to the clients. Creation of competition would automatically make improvements which is the backbone of the style industry.
The success of fashion industry depends on high levels of consumer understanding. Consumer awareness implies that consumers get regular changes about the services that are being innovated by the style industry. Occurrences like London Fashion week, Paris fashion week and other such celebrations have emerged as a platform for fashion designers and merchants to showcase their products and imagination. These festivals are characterised by existence of high profile superstars who endorse products of different designers and fashion brands. In these events, awards and accreditations are given to talented people who generate creativeness in their designs (London Fashion Week, n. d. ). This also serves to stimulate individuals to create greater creativeness.
Innovations are the key to success in the fashion industry. The basic tenets of the industry are based in continuous innovations. Firms like Hilfiger have created competitive advantage by introducing continuous enhancements in their product line (Manlow, 2009, p. 242). Improvements in fashion include amalgamations of modern and traditional fashion. Mega happenings like Paris fashion week and London fashion week serve as major message boards where market players can showcase their products to the prospective audience. Firms are also roping in stars and supermodels to promote their designs. These enhancements and subsequent endorsements by popular stars generate substantive interest among the mark audience with regards to the diffusion of innovation among the general masses. Broad appeal and glamour of the events generate eagerness among the mark markets in relation to adopting new products.
The evaluation of key success factors unveils the importance of factors like federal, awareness among the mark market audience. The aspect of innovation also creates sufficient interest on the list of companies to innovate their products. The UK market presents numerous prospect of the market players as all the three key success factors can be achieved by organizations. The right mixture of the three key success factors would assist in generating lasting competitive advantage for the companies in the highly competitive market.
Strategic groupings are defined as several companies and organizations which operate within a specific industry who've similar strategies. It's been noticed that in the majority of the conditions the difference among the different market players is normally captured by the presence of strategic categories within the industry (Kim & Mauborgne, 1999, p. 86). The style industry in UK is characterised by market players like Markings and Spencer's, Next, Arcadia, Matalan and Bhs who are global market players having procedure in all major markets across the world. All these organizations have the same target market and have a similar marketing mix because of their products. The foundation of building a strategic group is dependant on the fact that all the above explained market players operate in an identical macroeconomic set up and have an identical target market. These firms intend to have similar positioning strategies. The presence of a tactical group also creates access obstacles for new entrants as well as generates ecological competitive edge for these firms in the market. Presence of tactical groups will stabilise consumer preferences, it also creates higher competition and rivalries among the market players, as all the players in the proper group are known to concentrate on the same customer portion. This causes intense marketing by the organizations to defeat their rivals in the business markets. The scenario in UK market resembles a similar situation with companies aiming to use every possible technique to beat their rivals and capture the market (Hoskinsson, Hitt & Ireland, 2008, p. 87-88).
The concept of fashion has been common in UK since forever and the nation has been one of the pioneers in relation to creative imagination in this sector. The analysis shows that fashion industry is one of the most happening market sectors in UK. This can be gauged from its contributions towards the economy of the country both in immediate as well as in indirect terms. The UK market also symbolizes great opportunities for market players as it has a big customer foundation with high levels of disposable income which makes it an attractive destination for fashion brands around the world. The analysis also shows certain difficulties which mainly happen due high cost of recycleables and labour. Occurrence of proper group also will increase the competitive rivalry among the marketplace players. Regardless of this, the huge probable of the prospective market serves as an incentive for the majority of the market players to eye the rewarding market of UK. Hence, it could be concluded that success of organisation accurately that of fashion, lies in its ability to generate continuous innovation and also to mould the advantages of the market to generate sustainable competitive advantage.