Below is an essay on "Five Forces In The Beauty Products Industry" from Anti Essays, your source for research papers, essays, and term paper examples.
Five Forces in the Beauty Products Industry
L'Oreal, Shiseido, Nivea, Elisabeth Arden, Max Factor; question of time in this industry the history of the company is important because it proves the reliability of the company, all of those companies have been present in the market since about 1900. More than 100 year of tenacity, patent, brand recognition. It is a market of habit, women especially are used to one product one brand; it's a market with an important loyalty aspect. If there is a result they will not change brand. Financial capacity, innovation, ability to reinvent continuously, possibility to create different game and different target.
Entrants have overcome barriers by entering as luxury or high end brands, relying on department stores to sell their products. Prices are higher, target market is smaller than L’Oreal or P&G but, they serve them well. Brands who want to go toe to toe with P&G or the L’Oreals’ of the market; it will be hard to gain market share from the brands that have such a loyal following and cost advantage. Current incumbents should focus on their product, financial capacity and ability to supply the market demand easily. Relying on their brand loyalty and history is a strength.
Retail chains gain bargaining power as buyers because their selling costs are low and sales are increasing. Retail chains usually only want to deal with a handful of big suppliers and combining the changing consumer behavior, a no- frills, low cost approach is the most effective and profitable for industry incumbents.
I think traditional competitors should focus on expanding in new country markets in emerging economies because there is a vast potential of opportunity. This way companies who already have their successful products and financial capacity to supply an emerging market. In already established economies, women may already dedicated to a particular brand, whereas an emerging economy essentially provides a blank slate to lay the foundation of...