Management

Two frameworks for analyzing the external environment – the general environment and the competitive environment.

The General Environment: - The changes that occur in general environment will have an impact on firm’s strategy. The general environment consists of six segments: demographic, sociocultural, political/legal, technological, economic, and global.

Demographic segment:

- Government is concerned with aging population; therefore, they encourage young parents to give birth.

- Rising education levels led to later marriage and parenthood.

- Greater disparities in income levels

Sociocultural segment:

- Increased of the dual-income families

- Middle class consumers are more likely to have smaller families.

- New forms of family are emerging such as: single child family and rising divorce rates lead to “blended families”.

- With fewer children in the family, hopes of parents and grandparents are concentrated in their children.

Political/legal segment:

Technological segment:

* The Rise of internet retailing

* Innovation of new machinery on manufacturing

Economic segment:

Global segment:

* Retail structures are changing and supermarkets (Walmart, Kmart and Target) are replacing independent stores.

* Foreign brands are expanding their market to Australia.

The competitive environment:

Porter’s 5 Forces Industry Analysis Model

The threat of new entrants:

* The barriers to entry the children’s wear apparel is low in the manufacturing and production process.

* Strong product differentiation and marketing strategy can create high level of barrier to entry.

* The threat of new entrants will be high due to the children’s wear industry is attractive.

For instance, mature market, high profit-margin and low set-up cost.

* Licensing remains as a key issue in children’s apparel, particularly amongst toddler with popular cartoons, television programs and toy featuring on children’s clothing.

The bargaining power of...