The strategic position and potential opportunities and threats of TOPSHOP in the future

The brand has also launched its own websites through which customers in USA gets an opportunity to shop. The website is updated 5 times a week and with over 300 styles (Topshop, n.d). Environmental analysis The environmental analysis is done with the help of PEST analysis. This tool helps in detecting the trend of the environment which can become issues in the competitive environment (Henry, 2008, p.51). Political factors The countries political factor in terms of clothing has been shaped by the international trading agreement. But the rules on trade remains complicated and changes rapidly. The trade blocks and trade agreements maintains distortions to free trade, which has resulted in rise in the Chinese exports and a drop in prices for UK consumers (Allwood et.al, 2006, p.8). Economical factors Economical factors have an adverse affect over the industry. … Social factors The social factors affecting the retail clothing industry includes the age range of buyers which helps the retailer to determine what kinds of product to offer. Topshop has targeted the students and thus they produce fashionable clothing. The disposable income creates an impact on the buying behaviour of the consumers. The buying habits of the consumers are also a matter of concern as the retail outlets needs to match up with the consumers taste and demands. Technological factors With the help of technological factors the retail industry are able to cut down cost, enhance sales and can access customer information by way of bar coding and scanning, by using LAN, utilising the point of sales terminals. The distribution of the products will be done electronically enabling reduction of price due to product supply lines (Wilson, 2001, p.7). Porter’s Five Force Model Porters five force model focuses on five forces that shape the industry. The forces includes bargaining power of buyer, bargaining power of supplier, threat of new entrant, threat of substitute, and rivalry among the firms. (Refer Appendix A). Bargaining power of supplier The bargaining power of supplier in retail clothing industry would be high because there are many buyers but few dominant suppliers. Topshop clothing is usually designed by fashion designer thus making the bargaining power high. Bargaining power of buyers In a retail clothing industry the bargaining power of the buyers are high because they can easily switch from one brand to another as they have a wide range of options available in the market. Topshop produces fashionable clothing and accessories which are easily available as the product are standardised with other brands thus