The Industry behind Sustainable Fashion Disruption
- Jennifer Zammit
- Oct 28, 2021
- 6 min read
Updated: Nov 25, 2021
How do you know if a business is truly a sustainable fashion disruptor? What does this industry look like?
Don't feel like reading the presentation? Listen to our audio file below.
Have you ever wondered what makes a sustainable fashion business different than the fast fashion industry? Look no further! Read on to discover what it means to be a sustainable fashion innovator. Learn about the sustainable fashion industry through Porter's Five Forces and the PEST Analysis model.
“Building on four basic pillars (i.e., ethical fashion, fair-trade, organic, recycled), sustainable fashion strives toward creating new values, integrating ecological ethics and providing green wealth for society and the economy”
Why do we need the sustainable fashion industry?
Sustainable fashion companies, mean fair labour practices, a healthier environment and a better future for all. By buying from sustainable fashion companies, consumers can have peace of mind that their strategic choice of clothing is making a big difference and pushing the fashion industry from fast fashion to a sustainable future. #slowfashion
Take a quick watch of Vice Asia's, "A Beginner's Guide to Sustainable Fashion" to learn about what you can do to make a difference:
“ [Professional Women] are more aware that a hang tag using the word “sustainable” does not mean the retailer is using clean processes to develop that garment
Instead, truly sustainable fashion innovators consider all factors of their business and entire supply chain, from raw materials sourcing and selection, suppliers, manufacturers, distributers, retailers and consumers.
In fact, sustainable fashion innovators spend hundreds of hours researching materials, production processes, and lean manufacturing practices that minimize waste, environmental impact and are fair labour practices. These innovators also spend ample time vetting their potential partners to ensure that all members of the supply chain comply with the businesses sustainable requirements.
Learn more about the extensive work and effort ethical fashion brands go through to make a difference from Clara Vuletich, the pioneer "The TEN" methodology used by companies including H&M : #sustainableliving
Is the sustainable fashion industry profitable?
According to sustainable fashion industry statistics, the market is expected to then grow to $9.81 billion in 2025 and $15.17 billion in 2030 at a CAGR of 9.1%. #musthave
One of the most famous models ever developed for industry analysis, famously known as Porter’s 5 Forces, was introduced by Michael Porter in his 1980 book “Competitive Strategy: Techniques for Analyzing Industries and Competitors.”
Porter's five forces is a model that considers five different types of industry forces to determine the competitiveness and attractiveness of the industry. This model is used by many large corporations to support strategic decision making of firms within the industry or looking to enter a industry. Porter's five forces are;
1. Intensity of industry rivalry
Both the number of market participants and their market share directly represent the competitiveness of the industry.
Low differentiation between market participants increases intensity of competition and the opposite is true about high levels of differentiation in the market
Low cost to enter and exit the market also increase competition, high cost decrease the level of industry competition
2. Threat of potential entrants
The threat of potential entrance is the ease at which firms can enter the industry
The easier it is for a company to enter an industry, the higher the risk of new competitors
When it is not easy for market entrance, this acts as a competitive advantage for companies within the industry, as they have stronger positions to maintain market share and produce products at a competitive price
3. Bargaining power of suppliers
If there is a large number of suppliers in the industry, suppliers have a little bargaining power to raise prices, provide poor quality products, and not comply with a business’s technical requirements
However, if there are only a few suppliers in the market, suppliers have a lot of bargaining power to increase prices and make their own decisions regarding the quality of their products
4. Bargaining power of buyers
In industries with more competition, buyers have more power to influence the market encouraging lower prices, and higher quality, which successful market participants will have to meet to remain profitable
In industries with limited competition, buyers will have little influence on the price and quality of products within that industry
5. Threat of substitute goods/services
The sustainable fashion industry competes with alternative industries that have the ability to provide substitute products similar to their own
This factor presents a risk that participants in other industries will become competitors, competing at lower prices, or providing higher quality
See the following infographic to learn where the sustainable fashion industry is positioned on each of Porter's Five Forces;
"There will always be factors outside of your control affecting how your business operates. One method for discovering and quantifying those factors is the PEST analysis.
PEST Analysis is another strategic business framework used by many successful organizations to assess the external industry environment in which they compete in. PEST analysis allows professionals to assess the impact external factors will have on their business, and allows them to mitigate risks, and take advantage of potential opportunities. The PEST analysis model assesses industry conditions based in the following areas;
1. Political Environment
An assessment of the political environment of an industry considers, tax policies, labour laws, environmental laws, and trading policies
2. Economic Environment
An assessment of the economic environment of an industry considers, inflation, and exchange, interest and economic growth rates
3. Social Environmental
An assessment of the social environment of the industry, considers cultural aspects, customer demographics, and customer attitudes
4. Technical Environment
An assessment of this technological environment of an industry considers R&D activities, automation, technology and centers, and the rate of technology change
Take a look at the following info graph, which provides an overview of the sustainable fashion industry using PEST Analysis;
Supplementary Information:
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About Content Creator:
"Hi! I am Jennifer, and I am a co-founder of Sustainable Fashion Threads! I am an avid outdoors person who closely connects with our beautiful environment and has an avid passion for environmental sustainability. I have an interest in hiking, kayaking, fishing, and fashion. I also love fire starters and industry disruptors, and there are many in the sustainable fashion industry that I look forward to sharing with you!?
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