BACHELOR OF ARTS (HONS) IN BUSINESS MANAGEMENT

BABM BARTCH 07

STRATEGIC MANAGEMENT
ENVIRONMENTAL ANALYSIS

ODEL

GROUP MEMBERS
SATHEESHA RAJALINGAM
FAZLAN MARIKKAR
ADHUHAM RASHEED
KARTHIGA THURAIRAJAH
PRASAD FERNANDO
SAAD HUSSAIN
ZAIN NOORDEEN
 ENVIRONMENTAL ANALYSIS OF ODEL

Executive summary

Odel is one of the most successful brands that have emerged from Sri Lanka till this date.
Odel SELECT is a department devoted to dressing customers with a taste for high fashion. It
displays international designer wear by world renowned fashion icons. The analysis of
potter’s five forces on Odel revels that Odel has high bargaining power towards their
suppliers yet the competitor rivalry in the industry, thereat of the new entrant, and consumer
bargaining power is high. Meanwhile the threat of a substitute remains at medium. The report
does not contain a full SWOT analysis but only the strengths and weakness of Odel. It is
important for Odel to maintain these strengths mean while re-designing their strategy to
overcome their weakness.

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Table of Contents
Executive summary.........................................................................................................................i
1 Introduction...................................................................................................................................1
2 Potters Five Forces Analysis for ODEL.........................................................................................1
2.1 ODEL’s five forces analysis..........................................................................................2
3 SWOT analysis of ODEL..............................................................................................................4
3.1 Strengths................................................................................................................................4
3.2 Weaknesses............................................................................................................................5
4 Conclusion.....................................................................................................................................6
5 Reference.......................................................................................................................................7

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1 Introduction

One of the most innovative brands that have originated in Sri Lanaka to this date “Odel”
was first established in 1990. However the concept of Odel began to take shape in 1989
when Otara Gunewardene started selling clothes to her family and friends, from the boot of
her own car. During the time Otara saw something only a few could see, which is the
immense potential for retailing a range of stylish clothing to the fashion conscious Sri
Lankan. In 1995 the first branching out of the Odel chain of superstores was opened at
Majestic City. Yet the business got its momentum in 1999 when the flagship store at No. 5
Alexandra Place, Colombo 7, was launched in 1999. The splendid colonial architecture
build with modern glass and metal extensions which spans across 33,000 sqft, not only
provided a solution to lack of space to operate at larger scale but an emergence of seamless
and eclectic fusion of culture. Tired feet and hungry tummies can treat themselves to a host
of refreshing goodies located around the store, as well as at the food court, Boulevard.
Today at the stores of Odel offer its customers Ladies wear, Menswear, Kids wear, Home
ware, Delight - Sweet indulgences from chocolates to exotic nuts, Perfume & Cosmetics,
Books & Music, Shoes & Handbags, Jewellery & Accessories, Luggage, Food and
Stationery, Gift Wrap & Souvenirs (Odel, 2011).

2 Potters Five Forces Analysis for ODEL

Porter’s five forces is a strategic model which was developed by Michael Porter to determine
the state of competiveness in a market (Tony, 2006). The model is a flexible tool which could
be used to analyze a firm opportunities and overall competitive advantage no matter which
industry or market the firm operates. The model is comprised in five forces which are

 Revelry

 New entrants

 End users/Buyers

 Suppliers

 Substitutes

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A graphical representation of potter’s five forces model are shown on next page in figure 1.

Potential Entrance

Bargaining Threat of rivalry

power
Intensity and rivalry

Buyers
Suppliers

Bargaining power
Threat of
substitution

Substitution

Figure 1 Potter Five Forces model

2.1 ODEL’s five forces analysis

Five Forces Impact Description

High Medium Low
Bargaining Power of -The power of ODEL in the market place and
Suppliers the large quantities it purchases from the
suppliers and the suppliers are not ready to
lose the opportunity to supply to such a
powerful dealer.
-There are over 1000 suppliers and 200 plus
factories locally and globally supply Odel
with the incredible range of products which
give Odel the leverage and Options (Odel,
2011)
-Odel has their own manufacturing facilities

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Bargaining power of -The degree of moving toward other options

Buyers is very high where there are lot more
fashionable wear stores in the island such as
Hameedias, Crocodile, Levis, Roma Four and
House of fashion who offers similar product
with no or little difference and are also
located in several places
Threat of -As stated earlier customers have many
substitution options to choose.
-But the advantage which ODEL has is the
reputation that they have gained by offering
quality goods, where this has made ODEL to
thrive in the market place yet other fashion
chain market has the capacity to distribute
international brands like Gucci, Prada, Armani
yet their target market currently is different.
Threat of new -The fashion industry is expected to
entrance experience a growth in the Sri Lankan
economy, thanks to the influence of social
media and the end of civil war. Hence this
growth might attract international companies
and brands to such Marks and Spencer to
enter the market.

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Threat of inter -The main players in this industry are

rivalry Hameedias, Crocodile, Levis, Roma Four,
House of fashion, Fashion bug, Glitz etc..,
where some of them markets own brands and
well-known brands such as Levis, Reebok,
Adidas. Some of them only market well-
known brands where they are the authorized
distributors in the island for those brands who
have built their brand image in the market. All
these competitors offer similar product with
little or no difference to customers. Hence this
has created a price war in the industry.

3 SWOT analysis of ODEL

3.1 Strengths
 An affluent customer base and a good tourist customer base
 Recognized Own brands like ODEL, Otone, Backstage and Embark
 A diversified product Mix with over 1500 products
 Being the ambassador for reputed global brands like Doir
 Being the only major global designer brand retailer in Sri Lanka
 Having their own manufacturing facilities
 High brand equity
 Good relationship with local designer wear brands
 A qualified marketing force with knowledge and experience in designing effective
advertising and promotion campaigns
 Having an online shop

3.2 Weaknesses
 Lack of stores – the stores are only located in Colombo which limits the customer
acquisition
 Main target group is tourists
 Lack of brand recognition in international market

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 Lack of customers loyalty towards the business

 Spending a huge expenses on interior designing

4 Conclusion
Since the potters five forces identify that, threat of inter rivalry, threat of new entrance, and
bargaining power of buyers are high the authors believe that Odel should go building their
strategy on differentiating their product image. Also the overall the biggest threat to Odel is
form international brands entering the market or a launch of a substitute product from

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international company. Another area where odel have to stay focused is overcoming their
weakness. In a situation where Odel has the weakness of lack of customer’s loyalty a new
entrant from a branded company could easily lead a huge loss the market share of Odel.
Meanwhile it is also important for Odel to be focused on maintain their strengths.

5 Reference

Odel (2011), Cooperate Odel - About us[ONLINE] Available http://www.odel.lk/corporate-

odel/about-us [Accessed25th May 2013]

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Tony.L(2006). Michael Porter’s “Five Forces” Model[ONLINE] Available

http://www.cbe.csueastbay.edu/~alima/courses/3551/MurderCleaners/FiveForcesPorter.pdf
[Accessed 25th May 2013]

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