Case Study : The Denim Case Essay
Date of Submission
Assessment of the Industry Attractiveness of The Premium Jeans
The Industry Attractiveness of The Premium Jeans can be analyzed by the Porters five forces. The porter’s five forces framework seeks to analyze the level of competition within an industry and business strategy development. The porter five forces are: Threat of New Entry, Buyer Power, Threat of Substitution, Supplier Power and Competitive Rivalry. These forces are discusses here in for the case study of the True Religion jeans. The model draws upon an industrial organization economics to obtain five forces that are the determinants of the intensity of the competitiveness and, therefore, the attractiveness of the industry. The attractiveness of a company can be said to be an overall performance of a brand regarding the profitability.
From case 1-4, the threat of new entry is clearly exhibited. True Religion Brand Jeans was established in 2002 by Jeff and Kym Lubell and became the second largest premium denim brand in the United States by 2010. Despite the competitiveness due to the profit margin in the industry, the company had previously been holding the largest market share of about 25% of the total market share. However, the premium Jeans industry started to experience the first slowdown with sales down by about -5% in 2007 after years of skyrocketing sales). In 2009 the industry ‘s revenues deviated even further…