Kathmandu Ltd
PART 1 SWOT Analysis
1.1 Industry Analysis
Porter’s five forces analysis is presented as below for industry analysis of Kathmandu: Industry Competition→High | * Leadership in clothing and equipment retail in Australia and New Zealand. * Competitors within this area include | Barriers of entry→Medium-High | * Relatively low level of product design differentiation * High barriers for technically credible products | Threat of substitutes→Medium-High | * A wide variety of other substitute to choose from * The popularity of indoor activities | Bargaining power of customers→Medium | * A broad customer base and the customer spans a wide range of ages and demographics * High customer loyalty to the brand, especially from Summit Club, Kathmandu’s successful customer loyalty * Few switching costs | Bargaining power of suppliers→Medium | * Kathmandu is reliant on suppliers. The Company’s top 10 supplier’s account for approximately 58% of its product and 45 suppliers account for 90% of the Company’s product. The order may take three to six month to delivery. * Kathmandu has relatively strong relationships with the suppliers over a long time period. This is the low bargaining power. |
1.2 Internal and Core Competence Analysis
Internal environment is also evaluated from different perspectives: Resource | Examples | Capabilities | Core competence | Financial | -Sales Revenue and cash flow increase 11.8% and 9.2% respectively compared with last year-reduce existing debt levels to pro forma net debt (as at 31 July 2009) of NZ$70 million (A$57.4 million) | Strong financial capabilities | Yes | Organizational | -Strong and efficient board of directors-Summit Club, Kathmandu’s successful customer loyalty program. had over 285,000 members at 31 July 2009 | | Yes | Physical | -Kathmandu had 82 stores at 31 July 2009 across Australia, New Zealand and the United Kingdom-There are 70 locations in Australia and New Zealand to
1.1 Industry Analysis
Porter’s five forces analysis is presented as below for industry analysis of Kathmandu: Industry Competition→High | * Leadership in clothing and equipment retail in Australia and New Zealand. * Competitors within this area include | Barriers of entry→Medium-High | * Relatively low level of product design differentiation * High barriers for technically credible products | Threat of substitutes→Medium-High | * A wide variety of other substitute to choose from * The popularity of indoor activities | Bargaining power of customers→Medium | * A broad customer base and the customer spans a wide range of ages and demographics * High customer loyalty to the brand, especially from Summit Club, Kathmandu’s successful customer loyalty * Few switching costs | Bargaining power of suppliers→Medium | * Kathmandu is reliant on suppliers. The Company’s top 10 supplier’s account for approximately 58% of its product and 45 suppliers account for 90% of the Company’s product. The order may take three to six month to delivery. * Kathmandu has relatively strong relationships with the suppliers over a long time period. This is the low bargaining power. |
1.2 Internal and Core Competence Analysis
Internal environment is also evaluated from different perspectives: Resource | Examples | Capabilities | Core competence | Financial | -Sales Revenue and cash flow increase 11.8% and 9.2% respectively compared with last year-reduce existing debt levels to pro forma net debt (as at 31 July 2009) of NZ$70 million (A$57.4 million) | Strong financial capabilities | Yes | Organizational | -Strong and efficient board of directors-Summit Club, Kathmandu’s successful customer loyalty program. had over 285,000 members at 31 July 2009 | | Yes | Physical | -Kathmandu had 82 stores at 31 July 2009 across Australia, New Zealand and the United Kingdom-There are 70 locations in Australia and New Zealand to