Industry Analysis

Dove and Axe, belonging to Unilever, regroup body, facial and hair care products. These brands are on an extremely competitive market. Competitive brands are numerous and belong to huge brand companies: Procter& Gamble, Johnson&Johnson, L’Oréal, etc… Moreover, if the growth of the body, facial and hair care market is weak, this rivalry between existing competitors is higher and each of them have to differentiate its business strategy from the other to reach their objectives.

The threat of new entrants on the body, facial and hair market, in the fast moving consumer goods industry is nearly non-existent: Procter& Gamble (Head&Shoulders, Pantene Pro-V…), Johnson&Johnson (Le Petit Marseillais, Neutrogena, Aveeno…), L’Oréal (L’Oréal, Garnier, Cadum…), Beiersdorf (Nivea), etc… are huge competitors who are not going to be dethroned so easily.

The threat of substitute products could be nonexistent because shampoos, soaps, shower gels and body creams cannot be substituted for another type of product. However, a shower gel could be replace by soap for example. Pharmaceutical products could also attract consumers with specific skins. Nevertheless, consumers stay loyal to their brands or change their habits to another brand with competitive price compared with product benefits.

Besides the fact that Unilever is a juggernaut in the fast moving consumer goods, the company has to follow the trend by proposing innovations. Suppliers have a strong power of negotiation referring to the number of competitors and the numerous references. By the way, suppliers have to deal with these huge companies (Unilever, Procter&Gamble, J&J…), thus their power are balanced.

Moreover, the customer’s power of negotiation is very strong in the Fast Moving Consumer Goods compared to the huge amount of products proposed in sales stores. Everyone needs care products, thus, Unilever has to offer products to a dedicated target, with attractive price, qualitative services associated to the target: Dove targets women and girls, promoting positive self-esteem and inspiring them to reach their full potential, with product promoting natural beauty with natural ingredients; whereas Axe targets young men, encourage them to “smell and feel their best”.

That is why, Dove and Axe focus on specific targets and promote specific communication to keep their customers loyal and recruit new ones.

By S.C

Sources : Porter’s 5 Forces, Axe official web site, Dove official web site