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Fast Fashion and Barriers to New Entrants

Autor:   •  September 21, 2017  •  770 Words (4 Pages)  •  334 Views

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Product differentiation

In the case study, it has mentioned Gap is produce the woman’s sports and active apparel. Zara is concentrate on junior fashion (Regner & Yildiz, 2014), H&M is concentrate on all aspect of the fashion apparel and have own designer to design the clothes and UNIQLO concentrated on casual clothing (Regner & Yildiz, 2014), each brand represent different kind of clothing include sport wear and casual wear which people always buy, so that it can see there is no space for new entrants to have innovation as it has well develop in the fashion industry. Although there is innovation, the cost will expensive and reduce attractiveness of consumers. Therefore, the barrier is high.

The barriers

In conclusion, the barrier to new entrants is high. For the expected retaliation is high and it will cause the competition of market share, and it is impossible to win the large international companies in the price war, but the competition have not only the large company and also the small player joined from the period that was in the slow growth of the apparel industry. Also, although there are a lot of suppliers, it still have the risk that new entrants cannot find large amount of supplier and have the economics of scale. And for the product differentiation, the product should have the own style, however, the development of this industry is already mature, innovation is difficult, although there is innovation, the cost must too high for new entrants and heighten the price and reduce attractiveness of the consumers. Therefore, no matter how cheap of the capital requirement to enter the fast-fashion industry, but keen competition, half chance to success of economics of scale to lower the cost and difficult to have product innovation tells that it is not easy and not recommend to enter this industry as the development have already be mature.

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