Denim Case Analysis: Industry Attractiveness Of The Premium Jeans

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Case Study on the Denim Case

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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
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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 by -8% . The factor of the rivalry segment is mainly caused by the new companies joining in the industry. The attractiveness in the industry is due to the high profitability of the leading companies in the industry. For instance the True Religion Brand Jeans had sales of $311,001 and Levi Jeans leading with total gross profit of $4,105,766 (exhibit 1, 2009). The size factor is also exhibited in the case1-4. The leading two companies show a large difference in profitability relational to the smaller …show more content…
The true religion jeans though relatively expensive than the other brands have always won the market share. The premium jeans ranged from the traditional 100% cotton denim jeans to stretcher jeans and jeans made of the combination of the cotton and spandex. Most of the consumers prefer jeans made of cotton those which are made of other materials like polyester. The value of such a product is usually highly rated, and it stands the competition and imitation. The ultimate in product differentiation most companies try to create a lifestyle brand that transcends products category and wins profound consumer loyalty. The True religion premium has their denim transformed to lifestyle brands. The lifestyle brand status has become significance and critical to the company’s survival in the market. Another strategy for the survival is the market model used by the premium jeans. The use brand names o the popular persons and celebrities act as a marketing tool that many premium jeans companies

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