This is the detailed porter model or analysis of Unilever which is one of the strongest brand in the world. This article would be analyzing all external aspect of Unilever using the porter five forces model.
Unilever is a very strong and globalized well known company which is the stronger than the other multinational Companies. Porter’s five forces model is the most authentic way to analyze the most competitive environment is in the market for an industry. This model is most powerful tool for understanding the position of competitors and the position the company is deciding to achieve. The model also describes the less or high level of threats, attributes and opportunity power. Porter’s model always works for the best analysis of the concerning business, company or industry and this has five forces which are very effective. These are:
1. Buyer Power
2. Competitive Rivalry
3. Threat of Substitutions
4. Threat of New Entry
5. Supplier Power
Implementation of the Porter’s Five Forces on Unilever
These five forces model of Porter is very effective and this shows the real worth of the company and a worthy company is one which has a lot of competent in the market and these can be on high or low stance. So have a look on the implementation:
Buyer Power (LOW)
As we know Unilever is the company which has a lot of buyers and they are scattered in all over the world and as the quality of the company they have not the strength to pull down the price of the company products. But the customers are great in power than the buyers because they want to be satisfied on every level whether it is about the price or the quality of the product. They also have a strong power to make a company likeable and trustable and on the other hand may be the worst company ever. So Unilever should be very careful about this threat and maintain the prices as per the demand of the clients so that they can always happy and satisfied.
Competitive Rivalry (HIGH)
Unilever is a big company which is working as a multinational company and well known in all over the world. So the competition of the rivalry is very high and strong enough. They are not only the small shopkeepers but also the big giants in the market like P & G, Kraft and Nestle. They are also the bigger companies in the market and they mostly confuse the customers by introducing the equally attractive and best performer products in the market. Low switching cost allow customers to switch to other brands easily.
Threat of Substitutes (MODERATE)
This is the research about the consumer sector that it is human nature that they want to try the new and alternative products at least once in life. They will go for the other same usable products which the substitutes will introduce in the market for converting the mind of buyers from Unilever. These all things may attract the customer by the strategies which can be attractive alternative products, prices and quality of the product and ways of marketing. But the people who are used for the products of Unilever will once think about the brand name and reputation in the market.
Threat of New Entry (MODERATE)
Like Unilever is supplying its products and services in the world wide markets, the threat of the new entrants can not disturb it more. These things mostly depend on the place and the society and with different types of people it will vary. In the states and countries which are usually go for the working on brand names and images will never go for the new players. They are the players who are use to get approach on old is gold because they know how much experience the older have new ones never meet their potential. Unilever is the perfect example.
Suppliers’ Power (LOW)
Like the customers’ of Unilever it works on the loyalty and satisfaction of the suppliers so that reduce the chance of switching of the suppliers from it. It has a great strategy to do this all by providing them good rates at some extent. Unilever is a company which has a blanket agreement with its suppliers to entertain them with their concerns. This strategy will make the suppliers weaker in the stance and bargaining of the rates. The loyalty of Unilever and its suppliers makes a chain of good agreements and long time relation.
Conclusion
Even a strong brand like Unilever needs to keep its Research and development department updated in this changing era of customer needs. Having intense level of competition and less profit margins, all Unilever needs is to maintain the customer loyalty, controlling costs and act responsibly to competitors strategies.
References
Dobbs, M. (2014). Guidelines for applying Porter’s five forces framework: a set of industry analysis templates. Competitiveness Review, 24(1), 32-45.
Grundy, T. (2006). Rethinking and reinventing Michael Porter’s five forces model. Strategic Change, 15(5), 213-229.
Roy, D. (2011). Strategic Foresight and Porter’s Five Forces. GRIN Verlag.