Simone Rocha benefits from the large UK market, which gives it a wider reach. However, the retailer faces competition from established brands such as Zara. Considering this level of competition, consumers have diverse choices when making purchase decisions (Binet et al., 2019). Most of Simone Rocha’s customers are rich people with little direct bargaining power. However, the retailer has many competitors providing similar products, which means that the customers have little or no incentive to become loyal to Simone Rocha. The clients, therefore, have an indirect bargaining power working to the disadvantage of the retailer.
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Similar to many of the high-end fashion retailers in the UK, Simone Rocha sources its products from manufacturers in third-world countries at low costs. Supplier power is, therefore, relatively low, resulting in an insignificant force for the company. The extent of control that the suppliers have over the fashion industry is small (Rashid and Barnes, 2017). Therefore, Simone Rocha is likely to incur low capital costs to guarantee the potential of remaining competitive.
The Threat of New Entries
Products sold by fashion retailers tend to be relatively the same, which means that new entrants have nothing unique to offer to customers. However, Binet et al. (2019) believe that the upcoming retailers offer lower prices, use social media platforms to popularize their products, and practice immense imitation. The new retailers, therefore, pose an endless threat to such established brands as Simone Rocha.
Threat of Substitution
Fortunately for Simone Rocha, there are no options to substitute the supply of apparel. From the perspective of the products, the threat of substitution remains almost negligible (Donnelly, Gee and Silva, 2020). However, competition from existing and new entries creates the need for Simone Rocha to form special value in its products or risk substitution.
UK’s fashion industry experiences intense competitive rivalry given that many retailers are offering similar products as Simone Rocha. The fashion industry has little room for innovation, which explains the market saturation (Chan, Ngai and Moon, 2017). The industry is, therefore, difficult to dominate, which is not good for Simone Rocha.
Binet, F. et al. (2019) ‘Fast fashion and sustainable consumption’, in S.S. Muthu (ed.) Fast fashion, fashion brands and sustainable consumption. Singapore: Springer, pp. 19−35.
Chan, A.T., Ngai, E.W. and Moon, K.K. (2017) ‘The effects of strategic and manufacturing flexibilities and supply chain agility on firm performance in the fashion industry’, European Journal of Operational Research, 259(2), pp. 486−499. Web.
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Donnelly, S., Gee, L. and Silva, E.S. (2020) ‘UK mid-market department stores: is fashion product assortment one key to regaining competitive advantage?’, Journal of Retailing and Consumer Services, 54, 102043. Web.
Rashid, A. and Barnes, L. (2017) ‘Country of origin: reshoring implication in the context of the UK fashion industry’, in A. Vecchi (ed.) Reshoring of manufacturing. Switzerland: Springer, pp. 183−201.