Application Of Porter 's Five Model On Michael Kors

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3. Application of Porter’s Five Model on Michael Kors
Four forces that affect Michael Kors
Porter’s five model is defined as the framework that evaluate the position of a company in the external environment with focus drawn on the level of competitiveness (Roy 2011). The framework considers factors such as rivalry, substitute goods, the power of suppliers and buyers as well as new entrants. Four forces can influence the success of Michael Kors. The first one is competitive rivalry. Here, the struggle is about maintaining performance despite different tactics used by different companies to increase sales. For instance, Ralph Lauren uses premium prices for quality products to differentiate itself, while Coach uses product variety within the line of handbags to remain competitive (Stewart 2016). Also, when the industry is flooded with similar companies producing similar merchandise, the probability of a company stagnating is high because consumers have a variety to pick from. Hence, the need to establish loyal customers.
Michael Kors is also facing the threat of new entrants. McClatchey and Murray (2011) observe that most talented designers working for big labels such as Stella McCartney and Gucci typically go on to create their own labels increasing the intensity of the competition. However, the newer labels take time before amassing a followership and loyal customers because of capital constraints, lack of experience, and retaliation by established brands. Bargaining power

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