Asos Case Study Essay

1971 Words Oct 17th, 2013 8 Pages
Markets, Marketing and Strategy
IB1170

Executive Summary

ASOS.com is a global online fashion and beauty retailer and offers over 50,000 branded and own label product lines across women’s wear, menswear, footwear, accessories, jewelry and beauty. It offers products that potential buyers see celebrities wearing and keeps up with the latest fashion trends. Compared to high street fashion, ASOS promises the best prices and free delivery.

In the past years, there have been numerous changes in the retail industry (Braatz, 2002). With the success of the Internet, retailers have quickly adapted to the online market and recognize
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This leaves the suppliers with a low bargaining power.

3. Barriers to entry

For a company to enter the online retail industry there are not many obstacles. It is comparatively easy to imitate retail websites. The new entrant must provide its customer’s with super quality goods at the cheapest prices. Because ASOS is such a cost-effective company, others will be tempted to enter the market and attempt to increase their profits while decreasing that of ASOS’. This force requires ASOS to be extremely alert about its competitors. ASOS needs to keep a close watch on the market to prevent new entrants from creating dips in their profit margins.

4. Substitution

In this market, substitution a major issue for ASOS. Because ASOS relies on the fact that they sell their products at cheaper prices than their rivals, customers are inclined to using their services. However, if someone with similar resources and services as ASOS decides to set up an online retail company selling its products at prices cheaper to that of ASOS, they can pose a strong competitive threat. Customers will not take long before they switch to this cheaper alternative. ASOS has to closely monitor any new such competitors who pose a threat to their company.

5. Rivalry

ASOS possesses a competitive advantage over its rivals who have traditional clothing’s stores as it is an online only retailer. However in this industry, rivals tend to

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