Which provides itself an edge to brake power of its suppliers and make them weaker to negotiate at its own terms.
HUL's brands, spread across 20 distinct consumer categories, touch the lives of two out of three Indians. Conclusions and Recommendations Unilever is operating in a highly competitive and volatile environment and especially current economic crisis have made it difficult for many businesses to operate profitability.What are the potential reasons behind? An "unattractive" industry is one in which The following external factors create the weak force of the threat of new entrants against Unilever: Low switching costs strong force High cost of brand development weak force High economies of scale weak force The low switching costs enable new entrants to impose a strong force against Unilever. For instance, the customers can compare the quality of products as well as their prices and decide on the better option for them, from all available options. Consequently, the HUL remains in really strong position and the threat of new entrants is really low. The global segment provides an enormous opportunity for Unilever. This famous framework was contributed by Michael E. It is very crucial for the business to ensure survival, differentiation and competitive advantage. The main purpose of this analysis is to support the organization to locate the strategic aspects
In addition, these firms are generally aggressive, further adding to the intensity of competition. Threat of Substitution Continuous research and development in the consumer and household products has brought about a revolution in the consumer market and today customers like to try something new and better.
It is however a bit like saying that we had success for over a thousand years in predicting the movements of the planets with the geocentric model of the universe, so why should we accept that the earth revolves around the sun?
Also, the customers have all the information regarding product quality as well as its prices.The first stage is the assessment of the attractiveness of the industry in which a given company is embedded based on a structural analysis of the industry. So the environment where Unilever operates is with higher level of competition and low level of profit margins. These competitors have the power to attract and influence the customers by more attractive substitute, prices and marketing techniques. Threat of Substitution Continuous research and development in the consumer and household products has brought about a revolution in the consumer market and today customers like to try something new and better. References Wheelen, T. Bargaining Power of Suppliers When we talk about the bargaining power of suppliers for HUL, it is considered moderate. Threat of New Entry As Unilever operates in different geographical markets so threat of new entrants varies in different markets.
Each of the force is classified as low, medium or high depending on the nature of those parameters. As a result, the company remains strong despite new entrants.
It is original to the fullest of my knowledge.