MGM387 / MGM224

Strategic Management / Management

Mr. Dunstan Ang

INDUSTRY

Suwanda Kusuma (EW4710)

Pamela Teo Lie (EW4745)
 MGM387 / MGM224: Strategic Management / Management
Mr. Dunstan Ang

Table of Contents

Introduction ................................................................................................................................ 2

Five Forces Framework ............................................................................................................. 3

New Rival Entering the Industry ........................................................................................ 3

Competition Among Sellers in the Industry ....................................................................... 4

The Bargaining Power of Buyers .........................................................................................

The Bargaining Power of Suppliers and ...............................................................................

Competition From Other Industries That Have a Substitute Product...................................

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 MGM387 / MGM224: Strategic Management / Management
Mr. Dunstan Ang

INTRODUCTION

Streetwear is a genre of contemporary apparel, and it’s between sportswear and military
looks, and subcultures style of fashion that effuses and embodies characteristics of skate,
basketball, and hip-hop culture. Streetwear was accepted or born out of the California surf
culture of the late 1970s and early 1980s. The first brand that made the streetwear fashion
popular is Stussy from the local surfboard designer named Shawn Stussy and was begin selling
printed T-shirts collaboration with the same famous signature he placed on his custom
surfboards. Through word-of-mouth way to advertise, this kids made a powerful influence and
connected nature of the early urban streetwear/underground hip-hop, aftermath Stussy became
must-have stuff that anyone must wear on street culture.

Once popularity increased Stussy expanded his sales to boutiques, they move into
exclusive sales with the baseline of streetwear. Stussy took a multi-faceted, sub culturally
diverse, the two most integral components of what makes a brand streetwear are Southern
California lifestyle-based t-shirts brand and [mimicking] the limited feel of high-end luxury
brand.

Other brands such as Nike, Adidas, Gucci, Louis Vuitton, A Bathing Ape, Supreme and many
other brands took that advantages to compete in the streetwear market. Streetwear mostly focus
on “casual, comfortable stuffs, example like jeans, hoodie, baseball caps, sneakers, and most
of all, tees. Most of those brand only focus on t-shirts related to streetwear industry, the product
that they sell is considered expensive and it’s sometimes really difficult to get it. Nowadays,
streetwear has become one of the overrated product in the world and it might be become a
culture or a need.

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 MGM387 / MGM224: Strategic Management / Management
Mr. Dunstan Ang

MICHAEL E. PORTER FIVE FORCES MODEL

1. New Rivals Entering the Industry

With the development of the streetwear industry make the new comer want to compete
with other brands that has already exist and popular. In this industry a lot of new rivals entering
the industry because of the culture nowadays has changed, the people in this world has already
aware of the streetwear.

One of the famous streetwear website (Complex) stated that more than over 50 new streetwear
brand over the world entering the streetwear industry, one of them might success and might
not. Many beginner designer could easily print they shirt whatever they want and sometimes
just for fun, after that they could mass it to media social or other platform which could market
their product easily and could give attention to other people faster. Some of them would hire a
social media model just to market their product, social media or internet things is more easy to
use for young generation, those are the reason why there are so many new rivals entering the
industry.

Some of the rivals could even compete with other brands such as Off-White by Virgil
Abloh, the former art director from Jay-Z and Kanye West which he was nominated for a
Grammy Award for Best Recording Package. The first time launched his brand was in
September 2013, after 2-3 years later his brand became one of the most overrated streetwear
and most of the celebrity wear his brand with no exception young or old citizen. Some of his
product has already featuring one of the famous brand in the world Nike and even IKEA.

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 MGM387 / MGM224: Strategic Management / Management
Mr. Dunstan Ang

2. Competition among Sellers in the Industry

Since the popularity of streetwear industry grown up, a lot of sellers at the same time
keep increasing, it’s not become a rare thing anymore these days. The culture of streetwear has
influence a huge number of people, the needs of streetwear product became so high. For
example in New York, London, Paris, and many other place, every side of the city has their
own streetwear store and not including the online store that we believe that more than the
physical stores.

The easiness for new producers entering the market and the information about the
availability, price, and quantity of substitute good are the issues of competition among the
sellers in the industry. The volume of new product and a unique product shown up could also
make the competition among the sellers into a really tough situation. The number of physical
stores and online stores is getting crazy.

HYPEBEAST is an e-commerce and digital media based in Hong Kong stated 25 best
online stores for shopping quality streetwear, and that were only the best one, not include the
other sites around the world.

END. Union Los Angeles Slam Jam Socialism HAVEN Nomad

SUPPLY Goodhood Très Bien Need Supply Co. Firmament

KITH Notre RSVP Gallery 424 Concepts

Idol Brooklyn Nitty Gritty Wood Wood HBX Bodega

Commonwealth Perks and Mini Saint Alfred Hanon Grailed

HYPEBEAST also stated 10 luxury physical streetwear stores.

Dover Street
Maxfield LA colette KM20 KITH Manhattan
Market London
Slam Jam
HAVEN SSENSE END. GR8 Tokyo
Socialism

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 MGM387 / MGM224: Strategic Management / Management
Mr. Dunstan Ang

3. The Bargaining Power of Buyers

Personal customer may have a very limited bargaining power in the streetwear industry.
There are different factors that make the customer as a group an influential force. Nowadays,
customer switched to the customers who are well informed in all the information about what
they want, could choose from several option and could switch efficiently between the several
brands in the market. The large level of competition and the availability of so many brand and
options makes the customer tasks simple without wasting their times. Many of streetwear
brands compete to engage and keep the customers and that’s why the reason behind the high
spending on marketing.

For example, one of the richest kid in Dubai named Rashed Saif Belhasa 15 year’s old
kid just bought a Supreme collaboration with Louis Vuitton T-shirt, hoodie, and all of the
Supreme x LV product, the price of 1 t-shirt is about $2000 and the hoodie price is about $5000
USD. And the past couple month ago he made a social media is on fire, because he just got a
Ferrari covered in Louis Vuitton print and it cost approximately $250,000 despite being too
young to drive it. This mean that the buying power of streetwear industry is really high, he is
just one of the richest kids, not include all the richest person on this planet. This streetwear
industry sometimes didn’t make sense, but since the streetwear is becoming a culture on the
society, the person who in it don’t mind to spend their money that much.

Brands also apply several types of customer detention strategies including memberships,
birthday gift, and discount. So, overall the buying power of the customer is a huge force in the
streetwear industry. Even though, if the customers do not influence a brands position precisely,
they would do it indirectly. Brand are in a competition to serve and control the customers in
the best possible manner ways. And technology is being applied to improve the customer
experience and engage customers in buying the streetwear product as well. Websites and apps
have become essential if a brand wants to create space between its consumers hearts to keep it
long lasts.

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4. The Bargaining Power of Suppliers and

5. Competition From Other Industries That Have a Substitute Product

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