Porter’s 5 Forces Based on Appendix 4, Diesel faces the highest level of threat from its competitors (Levi’s, Replay, and Pepe Jeans). With similar product offerings in the denim wear, brand positioning may not be sufficient in maintaining Diesel’s competitive advantage (Crane et al., 2014). As its competitors gain economies of scale, price competition may succumb consumers to opt for products with cheaper alternative. This is because if consumers are seeking for luxury products, there are various substitutes such as Versace, Yves Saint Laurent, Givenchy, and many more (Burnes, 2009). Therefore, Diesel is also facing medium level of threat from the luxury counterparts in the fashion industry. Nevertheless, Diesel’s successful creation of a sense of community through its brand values would be able to sustain customer loyalty effectively as compared to its competitors (Burnes, 2009).
In the fashion industry, new entrants would pose little threat; this is because it requires a large amount of capital to enter the market due to well-established players. However, Diesel should constantly monitor for potential suppliers to cooperate with in the foreseeable future (Conway and Steward, 2009). This is because reliance on selected suppliers would lower the brand’s bargaining power, which would disrupt the company’s profit margin. As a result of lower profit margin, a shift towards higher buyer’s bargaining power could cause Diesel to lose its market share to rivals easily
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