Bargaining Power And Strategic Management In Business Case Study

Bargaining Power And Strategic Management In Business - Case Study Example Suppliers would have low bargaining power as they risk losing the account of one of their largest customers if the client is not satisfied by the terms offered. With many suppliers being present in the industry, it would be very easy for asos.com to switch suppliers thus weakening the position of suppliers in the market. Bargaining Power of Customers Asos.com is heavily reliant on the internet as its main channel of distribution. It does not have a presence as a traditional brick-and-mortar store and thus needs to target a young, fashion-conscious market segment and provide them with an interactive, pleasurable online shopping experience in order to drive sales. Secondly, the number of internet buyers in the UK has increased tremendously and with internet access spreading and the number of retailers offering online services also increasing at a fast pace, customers have more options to seek out the bet prices and switch firms, thus providing them with significant buying power over fi rms and minimizing the risk of exploitation. Fashion retailing being very concentrated in nature and the fact that asos.com does not have any differential advantage over its rivals suggests that the industry is highly competitive and customers exert a lot of influence over firms in the industry and dictate buying patterns. The threat of New Entrants A quick look at the group profits tells us that the industry is a highly attractive one and opportunity seekers will find it quite a lucrative industry to enter into. Thus profitability might eventually decrease if the number of players operating in the market increases further. However, it must be noted that customer loyalty, access to distribution, achieving economies of scale and capital requirements might present significant barriers to entry.