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The variety of flavoured waters and juices has increased substantially – putting pressure on Coca-Cola to evolve. Coca-Cola for instance has been facing increasing pressure from low-sugar beverages – taking away more health-conscious consumers. Yet it can still face a significant threat of substitutes. In fact, this is the epitome of a monopoly – it has unrivaled market power both up and down the supply chain. The potential for new entrants is high, bargaining power of buyers and suppliers is low and there is no competitive rivalry. There are firms that have a strong market position with its own market – perhaps even a monopoly. The threat of substitutes cannot be underestimated. The industry’s high instability would discourage new entrants to enter the luxury goods industry (Blog Euromonitor 2013) - LĪlso, the increase in the popularity of timepieces, i.e.
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The rate of development of the luxury goods industry is satisfactory but unstable the strong turbulences in the international market are considered as the key reason for this phenomenon. d) the industry’s complexity has been increased (D’Arpizio 2013), a fact that has resulted in the increase of competition (D’Arpizio 2013) - H.c) in 2012, a major part of the industry’s growth, about 28%, was achieved through ‘online sales’ (D’Arpizio 2013, par.11) - H.b) exchange rates tend to change constantly this phenomenon causes delays to the industry’s growth (D’Arpizio 2013) - L.a) continuous turbulence in markets worldwide downturns in the performance of markets have been proved as able to affect the buying power of the industry’s customers (Paton and Sanderson 2014) only the brands that can secure high quality, innovation, and uniqueness of their products are able to secure their market position - H.The industry’s competitors would have to face the following challenges: In any case, luxury products are, by their nature, related to costly materials the high cost of these products prevents those who would like to create substitute products of low price (Luxury Society 2012) - L
#Threat of new entrants in the retail industry series#
Popular luxury brands have taken action against those who try to develop cheap substitutes of their products for example, in a relevant lawsuit the courts ordered the owners of a series of websites that have developed such activity to pay an amount of $100 million to Hermes (Luxury Society 2012) - L Louis Vuitton has been the luxury brand that first supported this trend Richemont Group, the owner of popular brands such as Cartier, had followed (Luxury Society 2012) - L Since 2012 an important trend has appeared in the luxury goods industry: the emphasis is given to ‘fine jewelry’ (Luxury Society 2012, par.13) and not on ‘seasonal accessories’ (Luxury Society 2012, par.13). Suppliers who have access to fine materials/ pieces have become quite valuable, as a result of the industry’s turn to timepieces (Luxury Society 2012) - H The number of the industry’s suppliers tends to be continuously decreased due to the acquisition of the relevant firms by the most powerful luxury brands (Luxury Society, 2012) - HĬertain countries prefer to focus on luxury products based on local materials India is an example (Luxury Society 2012) - L Social Media has empowered consumers in all industries, including in the luxury goods industry because of the feeling that they can secure the support of many other people in regard to their rights, as consumers, customers in the luxury brand industry have become more powerful to influence the industry’s strategies (Deloitte 2014) – HĬustomers in the luxury brand industry seem to prefer ‘online purchase’ (Deloitte 2014), a fact that needs to be taken into consideration by the managers of the luxury brands (Deloitte 2014) - H
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Customers in the industry are likely to have ‘higher expectations’ (Deloitte 2014, p.10) as of the quality of the luxury products this trend also has been related to the potential of customers to search online for the exact characteristics of the luxury products (Deloitte 2014) – H