Kankatala Textile: Porter’s Five Forces Analysis
Competitive Rivalry. As Kankatala Textile’s is established in the society around six decades ago there are a number of competitors who come into the market and sometimes also become a tough competition to Kankatala. But one of the main strengths of this company is the quality of products. But in this decade, Kankatala Textiles currently faces a major competition from Kalanjali. However, competition is also advantageous because it helps the company use its research and development funds to innovate new products and set up mew fashion trends. Customers who see new products that suit their tastes and preferences are thus incentivised to increase their consumption of these products, leading to greater profit for the company. Competition thus helps the company to realize its full economic potential and find its stand in the society amid the sea of competitors
Supplier Power. The Company only buys the raw material and produces the different kinds of clothing by using its own man power and there is not much risk in purchasing this raw material because it has various substitutes.
Buyer Power. There is no voice of the customers in changing the prices of the goods as it is a retail shop where all the prices are fixed and there is no question of bargaining. However, buyers are able to choose which shop out of the many they choose to derive their consumption of textile goods from and in this sense, they do have a degree of autonomy in choosing the products they desire based on their tastes and preferences.
Threat of substitution. As Kankatala Textiles is a clothing shop it surely has many substitutes or competitors which is a threat for the company but the company’s innovative and unique patterns and designs and the pricing strategy makes the goods quite affordable for the consumers makes the company stand out from others.
Threat of new entry. If a new fashion trend comes up or if there is a paradigm shift in the tastes and cultures of the people, this would lead to a huge loss for the Kankatala Textiles as the company mainly focuses on the traditional clothing of Andhra Pradesh. The entry of new textile and clothing firms also poses a significant threat to Kantalaka Textiles because it operates in a monopolistic competition where there are numerous firms already in the business. If the products offered by the new firm are desirable to the tastes and preferences of the consumers, the market share of Kankatala Textiles will naturally fall as a result of the entry of a new firm.