Threat of new entrants (High): • Competitors: new comers from Eastern Europe offering a lower price product but also of lower quality (e.g. Slovakia) • Low barriers to entry • Retailers encourage sale of low quality products • Potential of differentiation of product offered • Easy access to suppliers and distributors • Economies of scale

Bargaining power of suppliers (Low): • Many suppliers both local and international • Long history offers high bargaining power

Industry Rivalry (High) • Large number of competitors, big players present on the market • High product differentiation • No switching costs • Brand identity

Bargaining power of Customers: • No switching costs • Existence of big retailers with high bargaining power • High number of firms supplying the product

Threat of substitutes: • Competitors: new comers from Eastern Europe offering a lower price product but also of lower quality (e.g. Slovakia) • Rapidly changing tastes according to new fashions • Many substitute products (tennis shoes)

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Private family-owned business with flat organizational structure (only two layers) Weakness of the chain of command (succession problem) Due to the external (little town) and internal (few employees) environment, the firm is run like a family Four generation small enterprise with no market orientation and no innovation Highly experienced craftsmen able to produce high quality hand-made products No R&D, no internal design department, no differentiation of the product (only Oxford men shoes), no investment in technology

Generic needs feet protection for walking

Need derivatives shoes

Expectations fashionable, low price, just for one season

Preferences specific brand

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Each consumer buys different shoes for different purpose Consumer prefers to buy more cheap shoes than one expensive pair of shoes