Porters Five Forces

(Marketline)
1. Buyer power
Buyer power in the Spanish apparel retail industry has decreased
because of the small size of buyers.Mostly the clients of the retial
stores are individual whih weaknesses the buyer power.
Buyer loyalty is mostly connected to the the specified designer and
not that really to the retailer. The market for non- designer apparel
in Spain is big and it is mostly focused to people with lower income.
Retailers can differentiate themselves through the styles of clothes
and the the price range of the cloehing , meaning buyer power is
decreased.
Retailers are obligated to offer buyers what they demand in a
unpredictable market like the fashion industry, which strenghten
the buyer power.
Overall, the buyer power is moderate.
(p.14, Apparel retail in Spain, Marketline)
2. Supplier power
The main suppliers in this industry are the clothing manufacturers
and the the wholesalers.With the liberalaization of the international
trade, the supplier power in Spain has decreased , because most of
the retailers are outsourcing their production in low-wage regions
like China and India. The lack of diversity between the suppliers also
weakens the supllier power. The existence of minimal wage slightly
increases the supplier power. Overall,the supplier power is
moderate.
(p.15, Apparel retail in Spain, Marketline)

3. New entrants
The spanish apparel retail industry has shrunk in the past years.This
makes the the spanish market less attractive for new investors.
Entry barriers and capital requirements are low. The largest share of
this industry is big companies Inditex and H&M.
Low switching costs and the low level of products diferentiation
makes the market penetration easier for the new entrants
The increased VAT from 18% to 21%, lead to higher unemployable
and lower sales. Overall, there is strong threat to the new entrants.
(p.16, Apparel retail in Spain, Marketline)
4. Substitutes
Most of the major apparel companies now have online shops, which
is an alternative to the conventional distribution chain. The people
acceptence of the online shopping makes the internet an alternative
shopping channel.
This means that some copanies can operate directly through the
internet , without need of opening a retail store.
Couture clothing is also a niche alternative.Another option is buying
second-hand clothes from sites like eBay.
Overall, the threats of substitutes is low.
(p.17, Apparel retail in Spain, Marketline)
5. Degree of rivalry
The spanish appareal retail indusstry is composed of a lot of similar
retailers. Increasing the capacity of the smaller players in the
market could be costy for them. The face pace of change in fashion
makes the rivalry stronger. The diversified product line of the
retailers, increases the rivalry. The sales in the spanish appareal are
forecasted to be lower because of the higher unemployment which
makes the rivalty stronger.
Overall, the rivalry is assessed to be strong.
(p.14, Apparel retail in Spain, Marketline)