Colgate Palmolive Company has actually obtained a variety of business that helped it in diversity and growth of its product's profile. This is the extensive description of the Porter's model of five forces of Colgate Palmolive Company Company, given in Exhibition B.
Competitiveness
There is extreme competition in the industry of food and beverages. Colgate Palmolive Company is among the top company in this competitive market with a variety of strong competitors like Unilever, Kraft foods and Group DANONE. Colgate Palmolive Company is running well in this race for last 150 years. Each business has a guaranteed share of market. This competition is not simply restricted to the price of the item but also for quality, development and variation. Every market is aiming hard for the maintenance of their market share. Nevertheless, the competition of other business with Colgate Palmolive Company is quite high.
Threat of New Entrants
A number of barriers are there for the brand-new entrants to happen in the customer food industry. Only a few entrants succeed in this market as there is a need to understand the consumer need which requires time while current rivals are well aware and has advanced with the consumer commitment over their products with time. There is low hazard of new entrants to Colgate Palmolive Company as it has quite large network of circulation internationally controling with well-reputed image.
Bargaining Power of Suppliers
In the food and drink industry, Colgate Palmolive Company owes the biggest share of market requiring greater number of supply chains. In response, Colgate Palmolive Company has actually likewise been concerned for its suppliers as it believes in long-term relations.
Bargaining Power of Buyers
Therefore, Colgate Palmolive Company makes sure to keep its clients satisfied. This has led Colgate Palmolive Company to be one of the devoted company in eyes of its purchasers.
Threat of Substitutes
There has actually been a great threat of alternatives as there are alternatives of a few of the Nestlé's products such as boiled water and pasteurized milk. There has likewise been a claim that a few of its items are not safe to use resulting in the reduced sale. Hence, Colgate Palmolive Company started highlighting the health advantages of its items to cope up with the alternatives.
Competitor Analysis
Colgate Palmolive Companys covers a number of the popular consumer brand names like Set Kat and Nescafe and so on. About 29 brands among all of its brands, each brand made an earnings of about $1billion in 2010. Its huge part of sale is in The United States and Canada making up about 42% of its all sales. In Europe and U.S. the top significant brands offered by Colgate Palmolive Company in these states have a great respectable share of market. Colgate Palmolive Company, Unilever and DANONE are two big industries of food and beverages as well as its primary rivals. In the year 2010, Colgate Palmolive Company had actually made its yearly earnings by 26% increase since of its increased food and beverages sale specifically in cooking things, ice-cream, beverages based on tea, and frozen food. On the other hand, DANONE, due to the increasing prices of shares resulting a boost of 38% in its earnings. Colgate Palmolive Company lowered its sales cost by the adjustment of a brand-new accounting procedure. Unilever has number of employees about 230,000 and functions in more than 160 countries and its London headquarter also. It has actually ended up being the second biggest food and drink market in the West Europe with a market share of about 8.6% with only a difference of 0.3 points with Colgate Palmolive Company. Unilever shares a market share of about 7.7 with Colgate Palmolive Company ending up being very first and ranking DANONE as third. Colgate Palmolive Company attracts regional customers by its low cost of the item with the local taste of the items preserving its top place in the global market. Colgate Palmolive Company company has about 280,000 workers and functions in more than 197 nations edging its competitors in many areas. Colgate Palmolive Company has also minimized its cost of supply by introducing E-marketing in contrast to its rivals.
Keep in mind: A brief comparison of Colgate Palmolive Company with its close rivals is given in Display C.
Exhibit B: Porter’s Five Forces Model
