Marketing and Key Competitive Advantages

ORTER’S 5-FORCE ANALYSIS OF THE SPORTSWEAR APPAREL INDUSTRY | | POTENTIAL ENTRANTSMINIMUM High economies of scale required (High capital requirement). Industry dominated by huge companies likes Cheetah and Hing Yiap which both have economic advantages of durability in market.  Brand identity easy to create but hard to maintain in competition with “powerhouse” brands such as Cheetah and Antioni. Greatest access to suppliers of raw materials and efficient distribution channels High switching costs. | |

SUPPLIERSMODERATE POWER Low concentration of suppliers Huge number of buyers High switching costs as there is contractual obligation. Large availability of substitute.  Suppliers can integrate forward. Close relationship with suppliers | |

THE INDUSTRYHIGH DEGREE OF RIVALRY Small number of local competitors. Marketing strategy must be good to face high competition,. Eg. Promotion Low product differentiation - Only design and colour are provided as basis for differentiation. They are mainly relying on branding and marketing efforts to differentiate products within the market. Exit barriers from industry are moderate due to restrained fixed costs, capital investment and inventory. | |

Threat of New Entrants | |

BUYERSLOW POWER Buyer concentration is low. Large volume of customers and buy in low volume. Switching costs between brands low. Low brand loyalty. Low product differentiation.  Low threat of backward integration. | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | | SUBSTITUTESHIGH SUBSTITUTE PRODUCTS High degree of substitution. Eg. International brands and imitated brand of sportswear  High switching cost for international brands and low switching cost for imitated brands. | | |

Key competitive advantages for Cheetah Strengths | Weaknesses |  Market Leadership: 40% market share Early-entry in Malaysia (local sportswear): Cheetah brand was