The Fashion Channel Marketing Analysis Harvard Case Solution & Analysis

1.      Bargaining Power of Buyer: HIGH

The bargaining power in the industry is high as several channels come up with novel ideas in the content that they broadcast, diverting the viewership to their networks. The customers also have easy access to world media, which changes consumer preference for the content within a few months. Moreover, the industry provides a lot of exposure to the customers through word of mouth, which is vital and can turn the business upside down. Furthermore, the factor that can strengthen the buyer power is their large quantity due to which they can ask concessions. This can be turned down only when the subscriber fees are paid and now the subscriber needs to avail the network till the subscription period ends.

2.      Bargaining Power of Supplier: HIGH

The supplier power is high in this industry. The potential of power of content providers is high given the autonomy to manipulate the facts. The issues arise due to information asymmetry between the people who deliver the content and the people who prepare the content. The premium ad spaces and the so called prime time broadcasting is limited and supply too is less versus the demand. The high bargaining power of supplier is also because of the threat of forward integration by the cable network providers and the high supplier to firm concentration ratio.

3.      Threat of Substitutes: MEDIUM

There are no direct substitutes to the channels; however, the evolution that takes place in the industry is promoting E-commerce. The social media networks, etc. offer tools to advertise free of cost on their portals which is directing revenues from the channels. Moreover, the other mediums through which the ads can be conveyed are low cost options, enhancing the threat of forward integration. The threat of substitutes as in internet is a medium and for mobile phones is low.

4.      Threat of New Entrants: MEDIUM

The industry is subject to higher capital requirements and adoption of advanced technologies to reach the viewers and increase their industry’s ratings. Further strong brand names are better endorsed by the viewers. The media industry is subject to low exit barriers and customer loyalty, however, there is always a possibility that the particular segment might prefer a particular channel, e.g. POGO and cartoon network are preferred by children, resulting is strong loyalty form this segment. The industry has high profitability due to extensive advertising and marketing trend in businesses through this communication medium. However, the sunk costs associated with the industry are also high.

5.      Competitive Rivalry: LOW

The competition is high, diverse and influential in the industry. As the world is going global, so are the consumers. Taking into consideration, for example the fashion industry. It needs to organize ramp walks on different cultural perspectives, reflecting regional trends in fashion. For this the channel needs to equip itself with information on almost everything and room every part of the world like CNN. Focus on a single content might hurt the channel’s reputation.

1.      CRUX:

The competitor analysis for the company shows that new networks are also popping in the industry, with addition of advance fashion, molded content in their line ups (Baker, 2008). This has caused the change in the competitive dynamics of the industry. The foremost competitors for the company is CNN and the Lifetime channel which accumulated a great chunk of notable viewer ratings as soon as they launched their fashion related up to date content (Ries & Jack, 2000). As Lifetime channel has succeeded in attracting huge female viewer base, which, according to the demographic analysis is the most fashion savvy segments, the channel is also attracting ad revenues from the fashion channel because of their demographics specificity e.g. Female. As Lifetime is focusing on female oriented content, the CNN channel is focusing on attracting men by broadcasting men oriented fashion updates on its channels. Both of the targeted segments can be sold at a premium CPM.

1.      Ratings for peers and the Fashion Channel

According to consumer ratings, the Lifetime scores the highest (4.5) on a rating for the extent of viewer interest in switching to the fashion oriented channels. In the line for rating, standing next is CNN with a rating of 4.3 and then is Fashion Channel with a 3.8 rating. On the awareness parameter, CNN scored highest with a 4.6 rating, the next is Lifetime with a 4.5 rating, and the list is for the Fashion channel with a rating of 4.1. Moreover, when the three channels were measured for their perceived value, again Lifetime and CNN won the race with 4.4 and 4.1 ratings and the fashion channel again ranked last with a rating of 3.7................................

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