The threat of substitute of products and services

Schuh is the only website that sells a wide variety of branded shoes that is also on the high street for their customers to shop in. The Schuh name is a well established company so customers would use the website as they know it would reliable to place orders. The website is regularly updated to let customers see the latest fashion trends and give them an opportunity to make their purchases.

If the company regularly assess the threat of substitute of products and services then they will be able to offer competitive pricing and promotions to ensure that the keep their customer base.

The threat of the entry of new competitors (barriers of entry)

New competitors are a worry to any company, although Schuh have a big place in the market as they have been established for over 10 years. Schuh also offer a wide variety of products to suit most of their customers, including male shoes. They also have a presence in many shopping centres and high street shops to entice customers in to buy a pair of shoes that they hadn’t planned on purchasing. Having a website Schuh is reducing their barriers of entry as competitors can see what their competitors are selling on a regular basis.

The intensity of competitive rivalry

Competitive rivalry is something that no company wants as this could reduce the amount of business done by the company as another company could offer the same product for a lower price. Although this is beneficial for the customers as it means that competitive pricing is introduced  meaning that the customer can get the product for the lowest price they find by shopping around. This could also help the company as if they were the one to offer the lowest price then their business could increase.

The bargaining power of customers and buyers

The customer has the power to change their mind and to shop on a different company’s website if it means that they are getting better value for their money. The customer has the right to cancel their account with any company and select a different company to set up an account with, as this is a costless process for the customer. Any company can offer incentives to keep their customers from using other company’s such as discount vouchers and promotions. Schuh could do this by offering free post and packaging or vouchers for 10% off or even student discount.

The bargaining power of suppliers

With such a competitive market the suppliers also have to have competitive pricing. If the suppliers product can come from another supplier hen they have to ensure that they have the lowest price or a good offer to encourage the company to shop with them and to increase business numbers.

However if the product is unique then the supplier has a very strong market enabling them to set their prices to ensure that profit is made as they have no competitors for the business.

Schuh have a number of different suppliers as they sell a wide variety of different branded shoes.