Threats of Intense Segment Rivalry
Esprit faces competitors such as H&M, Uniqlo, Zara, Mango, Giordano, and Gap. Esprit’s goal is to make its own enterprise gain advantage relative to its competitors. So when they implement their plan to achieve their goal, conflict occurs with their competitors. Competition is often manifested in the price, advertising, products, services and so on. Many “Fast Fashion” brands have different product lines. Their products are more innovative and stylish. Also those brands can meet the needs of middle-class consumers. Therefore those brands can occupy the market share and gain the market value. In 2011, Esprit lost more than 90% income from 2007. It is because Esprit lost its brand positioning, continuously slipping in popularity, less consumer demand, lack of innovation and unable to meet diverse needs of consumers. To solve these problems, Esprit decided to exit its North American retail operation. They cooperate with new competent license partner instead. However, they did not give up on North America entirely. Because exit the competition is more costly than continue to participate in the competition. There are some reason will mainly affect Esprit such as economic factors, global strategy and emotional effects. Socio-political factors include asset specificity and costs of exit. Threats of Buyer’s Growing Bargaining Power
Esprit exists in fast fashion industry and there are few competitors in the industry. The products of fast fashion industry have similar style. Therefore buyers would have lots of choices. Buyers would like to get higher-quality products at an affordable price and this will affect the profitability of companies in the industry. In China market, China has a huge market size and demographic differences among provinces. However, China is a “Red Sea”. Esprit cannot get a desirable profit because there are too many competitors. This affect the buyers in China have more choices to make their...
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