Ryotaro Ota, COO, room2

In recent years, various companies have set "Sustainable Development Goals" adopted at the United Nations Summit. In addition, ESG, which means environment, society and governance, is rapidly spreading among shareholders. As a result, an increasing number of companies are operating with ESG in mind. For that reason, “sustainable” products and services are trending in companies around the world. Therefore, I think Green Tech should also make environmentally friendly products in order to realize a sustainable society.

 

Considering the fact, I think the eco-bags we are thinking of are very suitable for global trends. At the same time, I think it is a product that is in great demand in Japan, where plastic shopping bags are charged. When it comes to the question of what materials to use for eco-bags, I came up with the idea of using clothes that are in excess of stock in the apparel industry. I also considered using clothes, towels, blankets, curtains, etc. that are old and no longer used. Mass production, mass consumption, and mass disposal have become issues worldwide, and I think there are some areas that have been reviewed, but there are still many industries that have not been improved, and I think the apparel industry is one of them. In the apparel industry, it is said that over 1 million tons of clothing are in excess stock annually in Japan alone. This idea will help improve the problem of excess inventory in the apparel industry, and will also help reduce plastic waste such as plastic shopping bags.

 

Next, I did a five force analysis.

"Five Force Analysis" is an industry analysis method advocated by business scholar Michael Porter. Five factors, "threat of new entrants," "bargaining power of suppliers," "bargaining power of buyers," "threat of substitutes," and "competition between existing companies," determine the profitability of the entire industry. "Force" refers to "threat", that is, competitive factor, and the stronger the five powers, the lower the profit of the industry and the less attractive the industry.

 

1. Threat of new entrants

When entering the market, it may be argued whether the leading company or the second-ranking company has an advantage, but it is generally said that the leading company has the advantage. However, this threat depends on the size of the barrier to entry.

For eco-bags, this threat is considered very high due to the low switching and manufacturing costs. Therefore, I think the key is how to increase brand power and name recognition.

 

2. Bargaining power of suppliers

To make a product, we need to buy materials and services from our suppliers. However, if the suppliers is strong or the number of suppliers is small, the purchasing cost will be high and profitability will deteriorate.

In this case, the apparel company will be the suppliers, but I think that the cost will inevitably increase because the suppliers is considered to be very strong in this industry.

3. Bargaining power of buyers

When providing a product to a company, the greater the purchasing power of the company, the stronger the price bargaining power of the buyer. Also, if the product is not differentiated or the switching cost is low, the bargaining power of the customer who is the buyer becomes stronger.

We think our customers are mostly individuals, so I don't think this threat is a big deal. However, I am concerned about the low switching cost.

 

4. Threat of substitutes

Threat of substitutes is threats that have value in place of a product or service, but unlike competitors in the same industry. It refers to the threat of substitutes from outside the industry, such as e-books for books and magazines.

I think that a substitute for an eco bag will be a plastic shopping bag, but considering its cheapness and convenience, I think it is a very threatening existence.

 

5. Competition between existing companies

Competition between companies in the industry affects profits. As the industry becomes more oligopolistic, competition will be milder, and if there are many companies of similar size, competition will be fierce.

Popular brands have already released eco-bags, and it is expected that famous brands will continue to enter the market, so competition between companies will intensify. Therefore, Green Tech must make a highly unique eco-bag and steadily raise its name and brand power.

 

As a result of five force analysis, all five factors can be a threat, so Green Tech is considered to be in a very difficult position. I thought that we had to use good materials for eco-bags, devise highly original designs, and raise our name and brand power.

Fortunately, Green Tech has professionals in various fields such as textiles and Kansei engineering, so I am confident that this project can be achieved.

 

 

 

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