Marketing Management

I. Threat of new entrant (Low)

According to Grant (2008), new entrants come into a market place when the profit margins are attractive and the barriers of entry are low. This will affect the competitiveness of the industry, hence, effecting profit. Analyzing through the barriers of the Indian textiles industry, it is hard for new entrants to enter the market without high capital requirements. For example, Suryalata S.M.L. produce in large economies of scale, hence new entrants with low capital will have a hard time breaking through. Besides that, if a textile manufacturing company produce high levels of product differentiation, it's harder for new entries to come in. (www.scribd.com)

II. Bargaining power of consumers (High)

The bargaining power of consumers should be viewed as a threat since strong bargaining power gives disadvantage to Suryalata Spinning Mills Ltd to increase their price (Hills and Jones, 2008). Buyers are powerful when:

* Small number of consumers purchase in large quantities

* Products are undifferentiated

* Switching cost are low

III. Bargaining power of suppliers (Low)

According to Henry (2008, pg74), suppliers are powerful when there is limited number of suppliers in the industry and when the supplier's products are differentiated or have high switching cost for the consumer. However in India, there are a large number of suppliers in the textile industry and this result in a weak bargaining position for the supplier. Besides that, the supplier in India lacks switching costs and has a low level of product differentiation. Hence, this will push the prices down and make the prices similar among the suppliers. (www.scribd.com)

IV. Threat of substitute products and services (High)

Grant (2008) stated that the existence of substitute means that customer will switch to substitutes in response to a price increase of the product or service. For example, if the price of coffee is expensive, consumers will switch to tea. As for the textile industry, there is no substitute for apparel.

V. Rivalry among competing firms (High)

When organizations in an industry exhibit a high degree of rivalry, this causes industry profits to be reduced (Henry, 2008, pg76). For instance, the textile manufacturing segment in India is made out of numerous manufactures and the market is highly competitive. By looking at Suryalata S.M.L.'s domestic competitors such as Baswara Syntex Ltd and Damodar Threads Ltd, they have equal size of market growth, hence they will compete aggressively in lowering prices and increasing advertising to attract customers. (http://economictimes.indiatimes.com) Besides that, India also