Lacoste Market structure of Lacoste INC.

Market structure

According to Michael Porter's Five Forces analysis, five external pressures shape the apparel market of which Lacoste is a part. Lacoste is a high-end sports clothing manufacturer, famous for its pocket 'crocodile' logo. However, despite the durability of the brand, Lacoste faces a number of challenges. The bargaining power of suppliers, the bargaining power of consumers, the threat of substitutes, barriers to entry, and degree or rivalry between competitors can all impact the high-end clothing market (Michael Porter's five forces analysis, 2011, Quick MBA)

Effect of new companies entering the market

Within the high-end sports clothing market, barriers to entry are moderate. It takes a tremendous degree of organizational might to achieve the status of Lacoste, and the company is large enough to operate on economies of scale. However, smaller, more 'boutique'-oriented firms can also produce high-end sports clothing for customers within the Lacoste demographic, focusing upon even more exclusive shoppers to draw...

All of these companies have a similar image and price point which has generated intense rivalry within the industry. Still, demand for luxury goods, despite the anxiety about the economy, has rebounded after the recession, given that consumers within the 'high end' of the market tend to be less affected by upward and downward trends in the economy, as their income is less salary-dependent. Lacoste may have lost some of its lower-end consumers, but its ability to capitalize upon high-end consumers who love the Lacoste brand should continue to buoy it even during rough economic times.
Prices

Lacoste's prices are clearly at the high end of the men's and women's sports clothing market, averaging around 70- 80 dollars or more, even for a very simple polo shirt. Lacoste's price range clearly indicates how its 'image'…