Colgate palmolive company Marketing anti-cavity toothpaste Case Study Solution
Competitive Strategy of Colgate Palmolive:
Cost Leadership: Under this strategy, the organization wants to capture the market share by offering extensively low prices to its customers. This policy is commonly followed by the large organizations because they have the resources available to obtain economies of scale; they also charge minimum markups which make it difficult for the competitors to compete with organization. Colgate can market its products under this strategy, but it is likely that this approach will not suit Colgate because the customers might perceive that the quality of their goods has been reduced.
Differentiation: In this strategy the companies’ offer something unique in its products which would differentiate them from its competitors. However, the companies who follow this strategy might charge a premium to their clients because they are providing unique features in their products. This strategy might suit Colgate, but they have to charge reasonable prices for it.
Low-Cost Focus: This strategy is similar to cost leadership, but the primary factor which distinguishes this strategy from cost leadership is that in this strategy the organization just concentrates on a particular segment of the market. This might be a disastrous strategy for Colgate-Palmolive because Oral health products are sold in such a manner that puts them in the reach of all segments of the market.
Differentiation Focus: This strategy is similar to Low-Cost Focus, but the primary element which distinguishes both strategies is that in this strategy the products of the organization are not the cheapest but are innovative and different from the products of the competitors and are marketed to a niche segment. This strategy is also not beneficial for Colgate-Palmolive because the products of Colgate-Palmolive are by default of this nature and this strategy is used by almost all segments of the market.
Porter’s Five Forces Analysis:
Bargaining Power of Supplier: Porter’s five forces analysis is considered the most strategically important analysis of a company. These five forces analysis addresses all of the components of the organization. As per Michele Porter, suppliers are the most important factor of the organization, they play a vital role in the success of the organization. It is crucial for the organization to maintain good and profitable relations with the suppliers to grow operations. If the bargaining power of supplier is high, it might be possible that the vendors may vary their prices, as per their desire without considering the loss of customers because they know pretty well that the chances of losing clients are very low. The bargaining power of supplier is also high when there is less competition in the market and when there is a little number of suppliers.
In the case of Colgate Palmolive, the bargaining power of suppliers appears to be low because of multiple factors. First, Colgate-Palmolive can easily considered an industry giant. If the organization is huge, the confidence of suppliers may be undermined by this fact. The other factor is that the products of Colgate appear to be very similar to those of its competitors and because of this factor they might be relying too much on Colgate Thus, this dependence reduces the bargaining power of supplier.
Bargaining Power of Customers: Customers have a real power to influence the strategy of the business because the revenue and profit stream of the organization is directly associated with them. It is estimated that products of Colgate-Palmolive are used by approximately 350 million customers and consumers around the globe in just a single day. It can be argued that the customers of Colgate-Palmolive are loyal with the organization, this may be possible due to many reasons which may include many factors.
Firstly the customer likes the products of Colgate due to the innovative nature of the products, Colgate-Palmolive has a history of launching fruitful and innovative products which fulfills not only the medicated requirements of the customers but also meet their needs of something new with the same quality.
The price of the goods of Colgate-Palmolive appears to be reasonable as compared to the high quality it possesses. The competitors of Colgate, charge slightly more than Colgate which makes customers more loyal to Colgate. The products of Colgate are up to the mark regarding their quality, and they are not charging any premium for this high quality. This factor also plays a vital role in reducing the bargaining power of customers.
The Customers of Colgate are also satisfied with the social and ethical values of Colgate;The customers acknowledge that Colgate is doing some extensive work for the betterment of the society especially for dental health of children.
COLGATE PALMOLIVE COMPANY MARKETING ANTI-CAVITY TOOTHPASTE Harvard Case Solution & Analysis
The threat of New Entrants: In the oral care industry, the threat of new entrants appears to be high because of little barriers imposed by the government and regulatory authority. The industry giants who are operating in the industry take continuous steps to reduce this threat to an acceptable lower level. They regularly update the quality of their products and also frequently update the technology which is used in the manufacturing of their products. They also extensively increased the research and development of their products and maintain healthy relations with all the suppliers and customers..............
This is just a sample partial case solution. Please place the order on the website to order your own originally done case solution.
