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Incase they feel that ASOS is not paying them reasonably for their popular designs they could go to ASOS’ competitors. This gives them a high supply power. However, ASOS has a vast range of suppliers they can choose from in the current economic climate as the majority of clothes sold on asos.com could be supplied from an array of companies. 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.
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ASOS’ target market is 16-34 year olds globally. Customers of this age are fashion enthusiasts no matter which country they are from. They are influenced by celebrities and follow the latest fashion trends. ASOS is thus their preferred shopping destination. It not only offers its products at the best prices but also offers very fast deliver service including same day delivery through the Meta Pack software and City Sprint’s Same Day Courier. There are various strategies companies have to implement in order to have a smooth and profitable functioning. ASOS follows the Niche Strategy; to select a narrow-scope segment (niche market) and be the best in quality, speed and cost of products in that market (Turban et al, …show more content…
In order to achieve this they work on continuously improving their resources and services. To meet their anticipated growth targets, they moved into a 530,000 square foot warehouse in Barnsley. They developed their operational efficiencies and introduced ASOS into the US, Australia and France through a direct injection model. Their delivery times have improved across the world and new customs processes haven been introduced to improve returns services. Their country list has increased to 196; 236 territories.
To achieve their global growth targets, a Buying and Merchandising system was introduced to change manual and labor intensive procedures to less time consuming and more structured ones. They continuously improve their website and in the previous year spent 10 million pounds to ensure state-of-the-art software. They increased their staff costs by 38%, marketing costs by 54% and technology costs by 72% to prepare for the demand. Resources have been dedicated to lead the mobile channel which is an important growth factor.
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. …show more content…
ASOS’ target market is 16-34 year olds globally. Customers of this age are fashion enthusiasts no matter which country they are from. They are influenced by celebrities and follow the latest fashion trends. ASOS is thus their preferred shopping destination. It not only offers its products at the best prices but also offers very fast deliver service including same day delivery through the Meta Pack software and City Sprint’s Same Day Courier. There are various strategies companies have to implement in order to have a smooth and profitable functioning. ASOS follows the Niche Strategy; to select a narrow-scope segment (niche market) and be the best in quality, speed and cost of products in that market (Turban et al, …show more content…
In order to achieve this they work on continuously improving their resources and services. To meet their anticipated growth targets, they moved into a 530,000 square foot warehouse in Barnsley. They developed their operational efficiencies and introduced ASOS into the US, Australia and France through a direct injection model. Their delivery times have improved across the world and new customs processes haven been introduced to improve returns services. Their country list has increased to 196; 236 territories.
To achieve their global growth targets, a Buying and Merchandising system was introduced to change manual and labor intensive procedures to less time consuming and more structured ones. They continuously improve their website and in the previous year spent 10 million pounds to ensure state-of-the-art software. They increased their staff costs by 38%, marketing costs by 54% and technology costs by 72% to prepare for the demand. Resources have been dedicated to lead the mobile channel which is an important growth factor.