which create an advantage for Tenfold in term of cost of product. However, threat of new entrant for Tenfold is low considering they produce 100% organic textile which create a high barrier for new companies. Most of the companies will eventually mix their product with chemical substance unlike the one prepared by Tenfold. With low threat of new entrants, there is no strong influence from new competitors that could eroded Tenfold profit. Bargaining power of supplier. It is a threat that a supplier might reduce the quality of a product or services and increase their price. As for garment industry, the bargaining power of supplier is relatively low since the number of suppliers is high. This thus create an environment that favours to Tenfold as they have the power to demand high quality of product with lower price. Furthermore, it will become easy for them to search for a new supplier if the existing supplier unable to provide a product that meet their requirement. With this, Tenfold able to provide a high-quality product at a lower cost. Another positive outcome is that Tenfold can increase their profit margin as the cost is low. As an example, Tenfold may increase their profit margin by demanding the supplier to reduce the price or Tenfold can search a new supplier with lower price. Threat of substitution. For threat of substitution, there is a threat of substitution for Tenfold, the buyers could substitute natural textile for the chemical one. However, the positive outcome is that nowadays people more prefer to use the natural one rather than chemical. It is a trend for consumer and businesses to support product that is environmentally friendly. For example, supermarket like Giants use biodegradable bag instead of plastic one and McDonald also did not provide straw for their customer if they did not request for it.
Textile factory is considered second in the pollution of water, factories use various kind of chemical which later release in the water. The usage of natural ingredient could lead to reduction of pollution in the industry. It creates a strong factor for Tenfold to sustain in the market as their customer will unable to find the substitute of their product that thus not create pollution. Bargaining power of buyer. There is low bargaining power of buyer in garment industry as there is many buyers since cloth is a necessary for human. It makes the companies in the industry have literally high power as their range of customer are broad. Customer in the industry will unable to push the companies to reduce their price. As for Tenfold, the positive effect is that they able to place a reasonable price for their product and they able to sell it at higher price which is suitable since they sell a 100% organic textile. An example of companies that exert the power is Nike where their product could reach RM500 for a shirt. Low power from buyer give Tenfold more control over their product without the pressure from the customer to reduce the price or to increase quality of their product.
You've reached the end of your free preview.
Want to read all 13 pages?
- Fall '18
- cherry lady
- Marketing, Textile manufacturing, Tenfold