STRATEGIC MANAGEMENT

Porters 5 Force Model Analysis for Toothpaste Industry in India

PREPARED BY : MMS-2ND YEAR (2012-13) - MARKETING NAME BAKHTIYAR ANSARI ASIM MOMIN FAZLUR RAHMAN YAQUB FAROOQUI SAUD GAZALI ROHAN MOMIN ROLL NO. (05) (18) (33) (40) (41) (46)

SUBMITTED TO : PROF. A.K.KHER

1. INTRODUCTION

Brushing has become a habit. Global Oral Care market estimated at over $12.6 billion. 97% of the population in developed countries use toothpaste. In india, over 60% of the population use toothpaste.

In Ancient India, oral hygeine was taken care by home made and
ayurvedic products. Current toothpaste market in India stands at over Rs.3000 crores.
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CONTD
Tooth Decay- primary oral problem in India as per World Dental Federation. Per Capita Consumption of toothpaste in India 127 gms.

Per Capita Consumption of toothpaste in Europe over 300

gms. Toothpaste Market in India- over Rs.3100 crores. Toothpowder Market in India around Rs.450 crores. Mouthwash Market in India around Rs.85 crores.

2. PORTERS 5 FORCE ANALYSIS

3) COMPETITIVE INDUSTRY RIVALRY

KEY PLAYERS
48-50% of Market Share

28-30% of Market Share

5-7% of Market Share

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OTHER PLAYERS
15% of Market Share

4. BARGAINING POWER OF BUYERS

The Bargaining power of buyers is very low. Since it is a personal care product, there are no real fluctuations in the consumption volumes. The various brands have successfully differentiated themselves from each other.

Although there are no real switching costs involved as such, people still
consciously or sub-consciously continue to purchase the same brand. The price is more or less constant, although there are at times some offers such as Free Toothbrush, 50 gm free etc.
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5. BARGAINING POWER OF SUPPLIERS

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Bargaining power of suppliers

Bargaining power of Suppliers - Low. Existence of big players like Colgate-Palmolive, Hindustan Unilever and Dabur. Manufacturing is largely outsourced. Most of the manufacturers in the Industry are integrated Backward as it helps them to cut transportation costs, improve profit margins and make the firm more competitive. There is no real uniqueness in the resources of various suppliers.

No real differentiation in the inputs.

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6. THREAT OF POTENTIAL ENTRANTS

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THREAT OF POTENTIAL ENTRANTS

Sector is not Capital Intensive. Colgate has continued to maintain its leadership all these years.

P & Gs CREST

CREST is the biggest oral care brand in the US. CREST Pro-Health Toothpaste received the ADA seal of acceptance for protection against six different dental health conditions: cavities, gingivitis, plaque, sensitivity, teeth stains, and bad breath.

Company CEO Bob Mcdonald has earlier said he intends to add a billion new customers from countries like India and China to the companys existing customer base of 5 billion.
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7. THREAT FROM SUBSTITUTES

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THREAT FROM SUBSTITUTES

There are traditional methods available as substitutes. However, they are not very threatening as it is very unlikely that toothpaste users would shift to traditional methods whereas traditional method users shifting to toothpowders and then to toothpaste is very much possible.

Plant Leaves

Plant Twigs and Stems

Fruits and Its Parts

Other Plant Parts

Powders

Mango Cashew Coconut

Babul Neem Banyan

Coconut

Walnut Bark Walnut Shell Rice Husk Coconut Shell

Salt

Other traditional Powders

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TOOTPOWDERS

Around 24% of Indian Households use Toothpowder.

Around Rs.500 crore market. Lal Dant Manjan toothpowder boasts of around 30 per cent of the market share whereas Colgate claims 38%. In the long run MNCs are looking to this product as an upgradation process, for example, to upgrade people who still use a datun to toothpowder and then to toothpaste.

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