Porters Five for TH

Threats of new entrants

Potential competitors would want to enter the undergarment industry as it is profitable and easy to
enter the industry. Thus, more competitors will be attracted and threat of new entrants will be
high.

Who are the entries?

Budget Brands: Jockey, Amul Macho, Rupa, Lux, Dollar , VIP and Hanes

Premium Rivals: UCB, Levis, M&S, fcuk, TH and Van Heusen

How to tackle

Developing brand loyalty by improving the CRM by introducing more varieties and uniqueness. If
product differentiation is high and customers place high importance to the unique experience, it will
build customer relationship and improve customer loyalty

By developing long term relationships with the distributors to widen the access to the target market

Improving the R&D to get valuable innovative products by improving technology and quality of the
underwear

Entry in the industry requires money investment. Thus, money investment is important criteria.

Threat of Substitute Products or services

The threat is substantially high for TH

How to tackle

TH can reduce the Threat of Substitute Products by offering product/service better than the
available substitutes.

It should provide better experience and high value for money by improving the quality and maximize
value for money to discourage customers from using the substitute product.

Improving the brand loyalty

Rivalry among existing firms

The Rivalry among existing firms is quite high as firms adopt aggressive targeting and pricing
strategies against each other.

Rivals for TH in India

Budget Brands: Jockey, Amul Macho, Rupa, Lux, Dollar , VIP and Hanes
Premium Rivals: UCB, Levis, M&S, fcuk, TH,CK and Van Heusen

Since TH is a premium brand, the company will face Rivalry among premium brands as they target
the same market (Upper class people and middle class that aspire to wear TH )

THU-M has remote competition and some direct competitor

By improving the product quality, assortment, promotions, innovation and CS , THU will stand out
and position itself

By Collaborating with CK for mutual benefit

Bargaining Power of Suppliers

Bargaining power of suppliers shall be high for TH

How to tackle?

TH can strengthen its position against suppliers by decreasing the dependency on one or a few
suppliers. Developing the long-term contractual relationships with suppliers from different regions
will lower their bargaining power.
Product redesign and diversification of the product lines can also help the organisation reduce the
suppliers’ power in the market.

Bargaining Power of Customers

Customer power is high in TH

A more concentrated customer base increases their bargaining power against TH

TH should manage the bargaining power of customer by increasing and diversifying their customer
base. It can be done by introducing new products, targeting new market segments and adopting the
product diversification strategies. Marketing and promotional strategies can also be helpful in this
regard. Building loyalty by embedding innovation and offering excellent customer experience can
raise the switching costs, which will ultimately reduce their bargaining power.

TH STP
S: Consumer seeking a new fashionable and quality underwear
T: Urban upper class youth and business executives-M and W (6 figure salary)

P: Rich and quality product for the premium customer

SWOT Analysis
Strength

1. Strong Recognition being a Global Brand

2. Strong distribution Network
3. Presence in all the regions across India
4. American Style designs
5. Associations and promotion from popular celebrities

Weakness

1. Segment has huge competition from established brands like CK, UCB etc thus, brand switching is
high

Opportunities

1. R & D and improving in CRM and product quality

2. Development of internet, and other mass media where brand penetration can happen

3. Great opportunity in countries like India

Threats

1. Customer needs and changing perception about the product

2. Global factors like high tax implications, High inflation which affects buying behavior of consumer
3. Customers look for high quality with low price hence high chances of brand switching is high as TH
is a premium brand