In jeans market, the participants are required to value the industrial context and the developmental trend. Besides, in the process of expanding business scale, internationalization also refers to a strategy that is concerned much by the organizations in the market. In this report, the aim is to make research on the industry structure and internationalization process of Lee. As a competitive participant in jeans market, Lee’s measures and strategies will be analyzed and evaluated well in the research. There are three aspects in the report. In the first aspect, it analyzes the industry structure of Lee. In the second aspect, it discusses the internationalization process of the organization. In the third aspect, it makes evaluation and puts forward relevant recommendations to enhance these two aspects further.
2. Industry structure of Lee
Lee serves as a strong competitor in jeans market. With long history of development and management, the organization keeps its large sales volume and high profitability in both local market and the global market (Lee Jeans, 2014). In its operation and development, the industry structure makes significant influence on its development and growth directly. Porter has put forward five forces theory (Dobbs, 2014, p.34). There are five basic elements that are expected to be considered well in learning the industry structure. First, it is the bargaining power of suppliers. The suppliers are affected by the fierce market competition. Lee is strict in selecting the raw materials. Only the ones that are capable of providing raw materials with high quality and reasonable price will be selected. Besides, the agreement will be signed properly between Lee and the suppliers (Tavoletti, 2009, p.660). In this way, within a long period in future, the price of the raw materials will not be controlled and changed easily by the suppliers. Thus, the bargaining power of suppliers is maintained in a low level.
Second, it refers to the bargaining power of buyers. In the developmental process of Lee, the customer loyalty has been valued much. The high-quality products and service are provided by the organization for the customers. The large customer group is kept by Lee. In addition, the sales volume is kept stably. Starting with this perspective, the bargaining power of buyers is also maintained in a low level. Besides, in order to control the bargaining power of the buyers, the company expands its diversity of products. In the jeans market, product research and development are handled actively by the organization. In this way, the customers have many choices when making consumption decision. The bargaining power of buyers is kept low, and the competitive advantages are kept well through the product diversity.
Besides the two aspects above, the threat of new entrants, substitute, and rivalry are the rest three aspects in five forces model. These three factors focus on dealing with the market competition that is caused by...