3.

COMPETITORS AND THE INDUSTRY

3.1 Major Competitors Who are the major Competitors for the chosen business? Sl No. 1 2 3 Competitor Hindustan Unilever Limited Godrej House of Malhotra

3.2 Porters 5-Force Analysis of the Industry Power of Suppliers The bargaining power of suppliers of raw materials and intermediate goods is not very high. There is ample number of substitute suppliers available and the raw materials are also readily available and most are homogenous. There is no monopoly situation in the supplier side because the suppliers are also competing among themselves.

Power of Buyers Bargaining power of consumers is also very high. This is because in FMCG industry the switching cost of most of the goods is very low and there is no threat of buying one product over other. Customers are never reluctant to buy or try new things off the shelf.

Power of Substitutes There are complex and never ending consumer needs and no firm can satisfy all sorts of needs alone. There are plenty of substitute goods available in the market that can be replaced if consumers are not satisfied with one. The wide range of choices and needs give a sufficient room for new product development that can replace existing goods. This leads to higher consumers expectation.

Power of New Entrants FMCG industry does not have any measures to control the entry of new firms. The resistance is very low and the structure of the industry is very complex that new firms can easily enter and also offer tough competition due to cost effectiveness. Hence potential entry of new competitors is highly viable.

Competitive Rivalry In FMCG industry rivalry among competing firms is very fierce. There are scarce customers because the industry is highly saturated and the competitors try to snatch their share of market. Market players use all sort of tactics and activities from intensive advertisement campaigns to promotional stuff and price wars etc. hence the intensity of rivalry is very high.

3.3 Applying Porter's 5-Force Model to the Business Power of Suppliers It is indeed enjoying greater supplier power due to its sole presence in the organized, premium technology shaving razors market in India. Also there are no close substitutes to their razors. The only substitutes in terms of the product per se are in fact very poor on the technology and quality. There Are several twin blade razors in the market but none would match the superior technology of a sensor excel, or the triple blade offering by Super-Max 3 is in no comparison with the Mach 3 So in reality there are no potential threats.

Power of Buyers The buyers as a result are not very powerful as there are no close substitutes, they buy in small numbers, switching to an alternate product is not easy (as onecartridge does not fit another razor, and also because once an investment is made on a premium Gillette razor, it is difficult for the consumer to leave it as such and move on to another razor), and customers of Mach 3 razors are not price sensitive. However, the only thing the customer can do is to revert to lower versions by compromising on technology or switch over to barber shaving.

Power of Substitutes As of date there are no close substitutes to any of the Gillette razors. The only close substitute could be the American Safety Razor entering the Indian market soon. But then again that would depend on the marketing strategies of the company.

Power of New Entrants The Indian shaving razor market is completely dominated by Gillette. Any new entrants should very carefully launch themselves because they would be directly pitting against a monopolist kind of market giant. Also the barriers to entry are

notmany except minimum size requirements for economies of scale, high initial investments and above all the retaliation by Gillette which could be anything .However, there is news that the American Safety Razor would be soon entering the Indian market. We can only wait and watch what would happen then.

Competitive Rivalry There is virtually no competition in most of the segments except in the flat blades segment, low income segment, traditional double edged users (laggards), and technology-illiterates. Only Malhotra Group competes in flat blade segment and Gillette has taken a step to takeover Malhotra Group. This shows that there is no rivalry in the business.

3.4 PESTLE Analysis

PESTLE Dimension Political Current situation Likely changes in the future

Economic

Social

Technological

Legal

Ecological

4. RESOURCES & COMPETENCIES 4.1 What are the resources of the business? a) Tangible Assets Physical Resources Human Resources b) Intangible Assets Reputation 4.2, Undertake VRIN Analysis to the Resource you think is most important. Comments

Valuable

Organizational reputation brings value to the firm and can be source of competitive advantage. Gillette has acquired good reputation among the customers Because It offers high quality products and services It is ethical in doing its business It constantly focuses on the consumer preferences Financial performance of Gillette are stable over the years These factors have led Gillette to gain the competitive advantage. Also Gillette sometimes uses its reputation to neutralize the threat of new entrant by creating the global product awareness, since it offers high quality products and services it charges premium price for some of its products which helps to increases revenues.

Rare

Rarity is when firm has valuable resource i.e. absolute unique among the different set of the competitors. Organizational reputation of the Gillette is been increasing over the years since its inception, because of its ability to provide innovative products to cater the needs of the

consumer. The reputation built by the Gillette in blade market is rare enough such that till now perfect competition has not set in in that segment it is clear market leader because of its innovative capabilities. This distinctive Capability has made Gillette to continue its function over the years and hence achieve sustainable competitive advantage. Inimitable

Intangible Resource are usually more costly to imitate than tangible resources. Strategies ,style of functioning can be copied but Gillettes reputation cannot be copied from its compete ting firm, because Gillettes reputation is built in the basis of first mover advantage and getting access to the patents, licenses, trademarks for their products which adds substantial value to the Gillette development.

Non-substitutable

Gillette has created the brand name in the global market because of its Reputation. It has built a reputation with the consumers for quality and reliability, reputation with suppliers for the fairness all these have paved a way for a Gillette to attain sustained competitive advantage hence it is difficult to be substituted by competitive firms.

4.3 Resources as Capabilities

4.4 SWOT Analysis Strengths Long Standing History "Long Standing History" has a significant impact, Gillette has got very good reputation all over the world. Most of its customers are loyal towards to this brand because of quality and long history of establishment. High Market Share High Market Share" has a significant impact. "High Market Share" will have a long-term positive impact on the entity, which adds to its value. Innovative Technology The company has a team of experts who have been designing to ways to improve products over the years. The innovation allows for them to test out new products to customers and gains market share. Market Leader Gillette has been around for a while and has become a market leader in the industry. "Market Leader - Gillette" will have a long-term positive impact on the entity, which adds to its value. This qualitative factor will lead to a decrease in costs. Weaknesses Male Products only Presently Gillette has product which satisfies the needs of men. Company is not ventured into any products such as its competitor has in their female category. Environmental Issues After the product reaches the end of its life cycle it is disposed of. A waste of material into our environment is always harmful to us and the environment in which we live. Costlier than other Razors Gillette razors are costly as compared to its competitors. Everyday use item is required to be cheaper. Therefore it cannot meet the expectation of all classes of people.

Opportunities Importance of Personal Hygiene As more people learn about the importance of personal hygiene, the company may benefit for the fact that they provide the products necessary. Gillette could profit tremendously as more people become aware and educated on the importance of personal hygiene. "Importance of Personal Hygiene" has a significant impact. Fashion Look Gillette has been noted in fashion magazines as to," how to look" in different seasons. Being a tool for the clean shaved look promoted by the fashion guru's. This gives the company free publicity to use their products. Its an opportunity for the company to attract new customers. Increasing Demand Now days people are very price sensitive. They are ready to pay maximum for the best quality products which are available in market. .Increasing demand for high quality products with different technology.

Threats Manufacturing Prices Increase If price of commodities increased this would increase cost for the company to manufacture goods. When cost rises this would lower profits for the company. Lower Cost Products The company has to deal with other competitors charging a much lower price for products. This will cause Gillette to lose market share and this could lower profits. Competitors for Gillette The company has competitors that it has to deal with. Any time competitors are on the scene this takes away market share from the company.

Rivalry between Firm and Competitors 1) Male Products 2) Gillette products are more costly than its competitors

4.5, Rivalry Anticipated

What rivalry can you anticipate between the firm and the competitors