In the fast fashion industry


In the fast fashion industry, the threat of new entrants is low. While the entry to the market does not require a huge initial capital outlay technology might be easily available. However, big players enjoy economies of scale advantages such as lower production cost, which smaller new entrants do not have due to its lower level of output. This makes it difficult for them to compete. The potential introduction of a price war by big existing players, as a form of retaliation would also make the market less attractive to new entrants. Moreover, existing brands have already established a considerable amount of brand resonance; which makes it difficult for the new entrant gain market share quickly. Reputable brands like Zara and H&M have brand values of $18.6 billion and $20.5 billion respectively may restrict new entrants with the intention of securing market share quickly (Interbrand, 2017).