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1. MANAGERIAL ECONOMICS
PRESENTATION
Topic- TEXTILE INDUSTRIES
By-
SURYANEEL DAS

2. Sustainable
Industry
Profits
POWER
OF INPUT
SUPPLIERS
INDUSTRY RIVALRY
POWER
OF
BUYERS
ENTRY
SUBSTITUTES AND
COMPLEMENTS

3. ENTRY
1. ENTRY COST
2. SUNK COST
3. NETWORK EFFECT
4. SWITCHING COST
5. SPEED OF ADJUSTMENT
6. ECONOMIES OF SCALE
7. REPUTATION
8. GOVERNMENT

4. POWER OF INPUT SUPPLIERS
1. SUPPLIER
CONCENTRATION
2. PRICE-PRODUCTIVITY OF
ALTERNATIVE INPUTS
3. RELATIONSHIP SPECIFIC
INVESTMENTS
4. SUPPLIER SWITCHING
COSTS

5. POWER IF BUYER
1. BUYER
CONCENTRATION
2. PRICE OF SUBSTITUTE
PRODUCTS OR SERVICES
3. RELATIONSHIP
SPECIFIC INVESTMENTS
4. CUSTOMER
SWITCHING COSTS

6. INDUSTRY RIVALRY
1. CONCENTRATION
2. SWITCHING COST
3. TIMING OF DECISION
4. INFORMATION
5. GOVERNMENT
RESTRAINTS
6. PRICE, QUANTITY,
QUALITY OR SERVICE
COMPETITION

7. SUBSTITUTES AND COMPLEMENTS
1. PRICE OF SURROGATE
PRODUCTS OR SERVICES
2. NETWORK EFFECTS
3. GOVERNMENT
RESTRAINTS
4. PRICE OF
COMPLEMENTARY PRODUCT

8. STRUCTURE

9. PORTERS FIVE FORCES MODEL
1. THREAT OF NEW
ENTRANTS
Powerful source of competition
(New capacity & product range)
Bigger the entrant - more severe
Limit prices, affect profitability

10. 2. BARGAINING POWER OF
CUSTOMERS
Groups/ cartels (Industrial
products), formal/informal groups,
Pressure on price, quality,
delivery
Affect cost & investment
(demand by customers)

11. 3. BARGAINING POWER
OF SUPPLIERS
Specialized product
Limited supply
Affects cost of raw
materials Industry
attractiveness &
profitability

12. 4. RIVALRY AMONG
EXISTING PLAYERS
Influence price
Cost of competing in
industry
Production facilities -
product development
Advertising, sales force etc.

13. 5. THREAT FROM THE
SUBSTITUTES
 Price advantage
 Performance improvement
 Coir decreased demand synthetic
fiber
 Substantial invest - R&D
 Limit price & profitability

14. Threat from new entrants (low)
1. Retailing not allowed for foreign
players
2. Huge investments in infrastructure
is required
3. Availability of skilled labors and
technical know-how is low

15. Availability of substitutes (high)
1. Unorganized retailing
2. E-retailing
3. Catalogue sales

16. Bargaining power of buyers (moderate)
1. Individually, customers have very
little bargaining power within the
organized retail stores
2. Various shopping formats
available to shop from
3. Lots of brand choices available
for similar qualities with different
price

17. Bargaining power of suppliers (low)
1. Being bulk purchases done by
organized retailer’s suppliers have very
little bargaining power in organized
retailing.
2. Many retailers are doing backward
integration and coming out with private
labels, thus decreasing dependence on
traditional suppliers.

18. Competitive rivalry (moderate)
1. Very few national level players
2. Growth rate
3. Presence of regional and local
players
4. High competition between the
national brands and retailer’s
own

19. TO SUM UP…
Industry competitors
Rivalry among existing
players
Potential
entrants
Suppliers Buyers
substitutes
Threat of new entrants
Bargaining power
of
Bargaining power
of
Threat of substitutes

20. THANK
YOU