In an Industry, there are always going to be changing competitive pressures. Michael Porter (1979) highlighted these pressures in his 5 forces model. (Porter, 1979, P.)

4.1.1 Threat of New Entrants

The threat of new entrants to an industry establishes the capability to obtain market share, and other vital resources. As Porter (1979) argues that the emergence for threat of new entrants relies upon the barriers to entry that exists. If barriers are high, newcomers can expect rigorous retaliation from its competitors, therefore, threat of entry will be low. (Porter, 1979)

The UK Window Coverings market is highly vulnerable to the underlying economic trends affecting the housing market, therefore has an impact on consumer spending and also bring household spending under pressure due to the fact that less people will purchase curtains and blinds within their households, this having an impact on the Window Coverings market. This brings an impact on the market value. Market value peaked in 2007 at £1.34 billion before declining by over 15% over the 2008/09 period. The key fundamentals affecting this decline have been the fall in housing market since mid 2008, this having an impact on consumer confidence and spending on home furnishings Industry.

Curtains play a major part within the Window Coverings Sector and accounts for an estimated 48% of the market value. Furthermore, it is estimated that blinds play a major share of 30% of the market. The blinds market have undergone a difficult time within the conservatory field of the market and a gradual replacement cycle. Nevertheless, blinds do remain very demanding within the market with its unique premium ranges of fashionable styles and materials, offering a relatively lower price. (AMA Research Report, 2012)

It is suggested, that barriers to entry is becoming a major concern for new entrants who wish to enter the retail market. This has become evident of the fact, that raising the required capital and resources for new entrants is difficult due to having fixed costs and highly advanced development of supply chains. Furthermore, an example of large retail chains such as John Lewis, Tesco and Wilkinson who have long-term investments in the distribution of supply chains.

There are other factors that may be of concern to new entrants. These are barriers to economies of scale and product differentiation. Economies of Scale is achieved by giant retail supermarket chains that utilise the strategy of ‘bulk-buying’ products and differentiate themselves from their competiton in achieving better quality of products, development of products, lower prices, and accessing better distribution channels.

4.1.2 Bargaining Power of Suppliers

It is suggested, that the required cost of resources and capital and equipment needed in order to produce the products and services is exemplified by the suppliers’ power and pressures of bargaining. Suppliers are very powerful if they are the only source of the critical materials needed to produce the product or if they have very little price competition for the materials being purchased. (Rockford Article, 2012)

As there is a higher number of suppliers and higher concentration of buyers (blinds retailers) in the UK blinds industry it is relatively clear that suppliers have less bargaining power in the face of major supermarket retailers. Most blinds retailers even have their own factory to manufacture blinds. Their raw materials are manufactured within UK, although some suppliers may manufacture their raw materials from China in order to receive them at a cheaper cost. Suppliers in this industry tend to have very little power. (Rockford Article, 2012)

4.1.3 Bargaining Power of Customers

The bargaining power of customers is characterised by the cost of products and services buyers are being charged by retail businesses. Furthermore, buyers tend to possess higher bargaining power if they have a wider range of products to choose from, that offers the same quality, price and satisfaction level in order to meet and satisfy their demands. The power of buyers can also influence cost and investment because powerful buyers can demand costly service. (Rockford Article, 2012)

The bargaining power of buyers determines the prices that businesses can charge for their products and services. Buyers have a high bargaining power if they have multiple choices of products that can provide the same satisfaction or if they do not place a high value on the satisfaction provided by the product. The power of buyers can also influence cost and investment because powerful buyers can demand costly service. (Rockford Article, 2012)

The bargaining power of buyers in this industry is quite high, not on any individual level but as a whole the markets must be responsive to the needs of its customers, the cost and quality of products offered are important to the buyers. The buyers are low in numbers as mostly replacement sales , low switching costs and homogenous group of products means that consumers have the power to look for alternative supply companies without affecting product quality or cost. Since the recession hit in 2007, more power has shifted into the hands of buyers. (Rockford Article, 2012)

It is suggested, that due to declining housing constructions and renovations that occurred in 2009, the home accessories sector has experienced a significant fall within the past 5 years. This has brought a negative impact to the housing market and a decline in demand in the period of 2009 to 2010. This affecting the industry revenues with a drop by 27.2% to £2.11 billion. (Carpet, Rug & Curtain Retailers Industry, 2012)