Dove Porter Five Forces Analysis

Published in Companies category by MBA Skool Team

Here is the Porter’s Five Forces analysis of Dove that covers threat of new entrants & substitutes, bargaining power of buyers & suppliers and competitive rivalry.

Threat of New Entrants:

The threat of new entrants in the Dove Porter Five Forces Analysis can be explained as follows:

In the beauty product industry as Dove, consumers are more open to trying new products to know about their benefits on skin, and if they find them fit on their skin, they are more likely to give them a chance. So, there are more variety-seeking consumers in this category who respond to the market's innovations and new product offerings. As Dove claims to be gentle on skin, all other brands across its range of products, but products from big players like L'Oréal, Bodyshop, etc., are quite popular among the consumers. Also, consumers choose different types of soaps according to their body structure and do not always like moisturizing soaps, as they may be having acne or oily face.

There is increased awareness about specific ingredients of the product and their effect on skin by new natural brands and are replacing chemical-filled soaps. So the threat of new entrants into the product category of the Dove is medium, but a customer who is loyal to Dove and likes the smoothing effect they provide is likely to stay with the brand as it is. It is one of the dermatologist recommended brand in the US, Canada, and France and is strongly endorsed by dermatologists worldwide.

Image: Wikimedia

Threat of Substitutes:

Below are the threats of substitute products of Porter’s Five Forces analysis of Dove:

Dove is premium soap priced much higher than the normal soap used in the industry. It has the distinct positioning of providing a much clearer and moisturized skin than other soap and patented the blend of mild cleansers with ¼ moisturizing cream.

So, no other brand offers the same poisoning in the market. The audience with a lower budget generally buys lower price soaps for their body and keeps Dove for use on their faces to get the soft and clearer skin it offers, which is even better than facewashes as claimed by the company. But recently, many players have started entering the premium brand industry of soaps and using the consumer consciousness of natural and purpose-driven brand offering to woo customers. With their natural and pure chemical-free positioning, this type of brand has started to attract customers and grow fast and can be a threat of substitute for the Dove brand. However, the Dove has also begun initiatives like the Dove self-esteem project to make young women and their parents aware of it and be their first choice. With a reach to almost 19,4 million people in 138 countries, it enjoys a wider reach band audience. So, the Threat of substitutes for Dove is low to medium and natural brands can offer a substitute in the future.

Bargaining Power of Customers:

In the Dove Porter Five Forces Analysis the bargaining power of the customers can be explained as:

Customers are price sensitive and look for the best value they get from the minimum price they pay as beauty product is not a one-time use product and they have to buy it a regular period. So, a difference in price of two similar offering soap can shift the customers towards a lower price shop. Also, customers are easily swayed up by the media and advertisement offering of different brands similar to Dove and are ready to switch and try making the other brand to come up with certain unique associations to be in the mind map of the consumer.

So, there is high bargaining power of customer in the category of beauty products and the brand shave to shift and experiment withier pricing strategies at different time in order to be in the value providing segment of the consumer to which he is ready to pay.

Bargaining Power of Suppliers:

Following is the bargaining power of suppliers in the Porter’s Five Forces analysis of Dove:

Dove is a beauty cleaning bar that contains a certain part as a moisturizing cream. It has distributed its supply chain across multiple suppliers to avoid any shortage of ingredients at any point in time. Also, there are many suppliers available in the FMCG products industry, offering competitive prices and negotiating with large players. Dove is one of the flagship and premium products of Unilever, which has volume buying power. On the other hand, the Dove has adopted an initiative of responsible sourcing, further buying from suppliers responsible for every manufacturing practice. This has led many suppliers to develop themselves and make them less harmful to the environment and more employee friendly. So, this industry's bargaining power, especially with large FMCG giants like Unilever, is low.

Competitive Rivalry:

The impact of key competitors in the Dove Porter Five Forces Analysis is as follows:

There is an intense rivalry among the brands similar to Dove in marketing their product and adopting different promotional strategies to reach as broad audiences as possible in the beauty industry. Some of the key Dove competitors are L'Oréal, Pantene, Nivea, Fiama, Olay, Pears etc. There have been several social media wars among brands to interact with customer offer them their value and associations with them. Different sets of online and offline advertisements with various celebrities and models with a well-crafted story help create space in the audience's mind in a temptation to buy and try their products. Also, all the brands try to prove their product best recommended by dermatologists and lab-tested by bringing the concepts of doctors to make the consumer attracted toward their brands. As we know, consumers are a variety seeking in the beauty industry.

They are ready to experiment with the product's claims, so promotional and advertisement channels create high rivalry among the brand, depicting how they are best in the industry.

To conclude, the above Dove Porter Five Forces Analysis highlights the various elements which impact its competitive environment. This understanding helps to evaluate the various external business factors for any company.

This article has been researched & authored by the Content & Research Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.

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