You have been listening about the porter’s five forces model. If you are an owner of a business, then you need to understand this model for the reason that it assists business managers as well as marketers to closely look at the balance of power in the concerned market place. It also helps to analyze the potential profitability as well as the attractiveness of a sector in any concerned industry. This model is really simple but the most powerful one, which helps you a lot in reviewing the power of market position, merely with the help of 5 key forces.
How one can make use of Porter’s five forces model?
Porter’s five forces model necessitates working on the following forces.
The first force deals with the threat of some new entry.
The second force deals with the power of buyer.
The third force deals with the substitution threat.
The fourth force deals with the power of supplier.
The last but not the least force deals with the competitive rivalry.
One of the leading Indian company’s sideburn India Ltd majorly focuses on personal care, health care, and foods. The company is proffering the natural solutions for the holistic and healthy life of the consumers. Porter’s five forces analysis is a very useful and effective tool for your business. Following is the porter’s five forces model for Dabur India Ltd.
The Threat of New Entrants
What is this force all about? As a matter of fact, if it is easy and unproblematic for any new business to get started in your concerned sector, for instance, if the entry doesn’t necessitate any sort of investment, then it’s a threat, for sure. In various sectors, the presence and easy access to the internet have made this really easy. So, in this case, you need to ask yourself a few questions, for instance, the funding needs to take a start for a new business, specific rules, and regulations, the barriers to entering, the ease to take a start, etc.
The most important things to consider about Dabur India Ltd are its 100 years legacy, learning curve, brand loyalty; the economies of scale, patents, first mover etc and all these points come in favor to the Dabur. Keeping all these things in mind, we conclude that there are no potential entry barriers thus there is no threat for new entrants.
Substitution Threat
The substitution threat increases in case if there are other alternatives available too. For instance, you need to consider is it easy and unproblematic to search out the alternative to your service or product? Another thing to consider is that is it can be easily automated or outsourced?
The presence of the substitutes in the market can lead the consumers to switch to other available alternatives, in any case, for instance, the increment in the price of products. Dabur being one of the leading Indian companies is really very competitive as it doesn’t compromise the quality and have the competitive rates. Being the most experienced company, Dabur India has won the trust of its customers and the customers are loyal to the company. For instance, he Dabur amla hair oil is the most used oil in the whole country for many years.
Competitive Rivalry
If we talk about a specific market or industry, you will see it excellent as a newcomer if there are a few competitors but as a matter of fact, if it has a few competitors, it will have a short lifespan, definitely. At this stage, you need to identify the competition level in the concerned sector, or where you stand in all the competitors.
Yes! There are competitive rivals of the Dabur Ltd, for instance, Tata tea, Nestle India Ltd, Hindustan Unilever Ltd, Marico Ltd, etc. So, the company needs to relook its strategies constantly and regularly to maintain its presence in the market. However, the demand for the Dabur products in the rural areas is somewhat low as compared to its competitors.
The Power of Buyer
At this step, you need to keep in mind the following things to get an estimationof the power of the buyer.
For instance, you need to consider how powerful the buyers are in your concerned sector? Consider the number of potential buyers as well. Also, consider the power of buyers in bringing the costs down; for instance, ask yourself if the buyers are able to do so or not.
The global, as well as the local competitors of Dabur India Ltd, has dramatically increased the customer’s bargaining power. As a matter of fact, there is a vast range of available competitors and this regard, the Dabur Ltd has to maintain its strategies in such a way that it could stand out of all the competitors for its customers. This is possible if the company lower its prices without any compromise on quality.
The Power of Supplier
The suppliers preserve the power in case if they are more than a few in numbers. In this regard, you need to consider the number of suppliers in the concerned marketplace or industry. Consider the number of those suppliers who control prices. Consider if the suppliers hold the power or not. The last but not the least thing to consider in this regard is that if it’s easy to switch or not, also consider the cost required for switching.
With we talk about the Dabur’s Ltd bonding with the suppliers, it’s really very strong for the reason that Dabur has been present from 100 years and has a huge network of reliable vendors and suppliers as it purchases over 7000 products yearly. Volume really matters for the suppliers as high volumes are profitable for them, for sure.
Conclusion
Being a largest FMGC company in India, Dabur has strong brand equity and can expand its business in rural segments. With increased customer preference towards natural and herbal products , it can expand its market through winning competitive strategies.
References
1. Singh, B. and Gopal, R.K., 2016. Demystifying the Brand Patanjali-A Case on growth strategies of Patanjali Ayurved Ltd. PES, 11(1), p.68.
2. Sahaf, M.A., 2008. Strategic marketing: making decisions for strategic advantage. PHI Learning Pvt. Ltd…