Competition

Porter’s model is a powerful tool to understand the model of an industry and how it is influenced by five key factors. A business manager should always an edge over its competition so as to sustain in the industry.

                                                         Porter’s Five Force Model

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•       Segment Rivalry- A manager should always know who all are his competitors and what are their capabilities. If a brand has tough competition and they have good product and services to offer then its little harder for the band to make its mark. Head & Shoulders strong competitors are Clear, Sunsilk, Pantene, L’Oreal, Nizoral, Palmovile, Vasiline.
•      New entrant- The entry of a new entrant can wobble your product position in the industry. It takes only little time or money to enter the industry and to compete effectively. If the new competition is good enough then it can hamper your product demand in the industry and can give a tough competition
•          Threat of Substitution- According to this model a threat of substitute exists when the demand of the product is affected by varying the price of the substitute product and by providing good quality with more quantity. Head & Shoulders was affected by those shampoos which are more beneficial and cost effective. In that ways L’Oreal total repair five, Clear, Pantene and Sunsilk was its competition
•       Buying Power – It is the power that a consumer has so that it can drive the price down. It is affected by the number of buyer, importance of each individual buyer to your product, the cost to them of switching from one product and services to someone else
•         Supplier Power- Power which a supplier has in order to drive the prices up. It is affected by number of the suppliers for a particular product, kind of services and good provided by them, the control of switching from you to some other company and the control over you. Fewer the suppliers you have fewer the choices and more powerful the suppliers.