Industry Analysis (personal care)

Industry AnalysisCosmetics Industry BY,

GROUP-8

MAZHAR

PAVAN

PIYUSH

Potential Growth Rate

Rapid growth over last 2 decades.

Industry is growing at around 20%.

According to ASSOCHAM, India’s cosmetics market has been growing at an annual pace of 20% and is expected to reach Rs.20, 000 crore by 2014.

Ease of entry of new firms into industry

Total 66 skin types, India has 40 types of skin tones.

Huge opportunity.

Growth with new products.

Intensity of competition among firms:

Cosmetics Industry has high competition Intensity.

Low in men's segment

Company ( product ) Market Share ( % )

Emami ( Fair & Handsome ) 50%

HUL ( Fair & Lovely Max ) 25%

Nivea ( Men Whitening ) 10%

Garnier ( Men’s Powerlight ) 10%

Others 5%

Degree of product substitutability High degree of product substitutability

Presence of many players

Degree of dependence of complementary or supporting products and services Degree of dependence of complementary or supporting products

and services is moderate.

Degree of customer bargaining power: Customers bargaining power is very high & they demand for favorable prices

To retain customers is a very challenging task for the cosmetic companies

Consumers do not always stick to one brand of skin care or hair care because the switching costs are very low

Brand awareness is more in urban India, but brand loyalty is less towards the products

whereas brand awareness is less in rural India, but brand loyalty is more

Degree of technological sophistication in Industry: There is high need for technological sophistication in this industry

New synergetic actions with different ingredients.

Rate of Innovation: Remarkable increase in R&D investments in this industry in recent years.

P&G is considered to be one of the companies dealing with cosmetics with the best innovation strategies.

Management team of Emami

Name Designation

R.S.Agarwal Chairman & Founder

Prashant Goenka Head International business

N H Bhansali CEO – Finance strategy and business development

AK Joshi Company secretary and AVP Legal

Shyam Sutaria CEO - International business

Dhiraj Agarwal Head Media department

R K Surana President - Operations and commercial

Krishna Mohan CEO - Sales supply chain and human capital

Punita Kalra CEO R & D and innovation

Chandra Kant Katiyar CEO Technical (Healthcare division)

MACRO ENVIORNMENT

Effects of the changes in national economic activities

The Indian market for high-end products and services is estimated at over 400 billion rupees in next three years on the back of rising per-capita income and evolving consumer trends.

A study by Nielsen in 2012 found that 77% of the Indian women are willing to use their extra income in buying health & beauty care products and increasing working women numbers suggests that the skin care industry is in boom even the national economic activity is slow.

Effects of changes in local economy for the business:

According to RNCOS Industrial Research Solutions, “Indian Skin Care Market Forecast to 2015”, people, in India, now gives more importance to branded products.

So they are increasingly shifting towards more customized skin care solutions even when the Local Economy is down.

Competition from overseas:

More chances for foreign companies to enter into India

Highly attractive market

Impact of Legislation on Business:

Drugs and Cosmetics Act and the Animal Cruelty Act.

The Fair Packing and Labelling Act, established in 1966, require consumer products to contain a proper informative label.

Effect of demographic changes on business:

Age: Direct impact on cosmetics industry

Income: As income increases spending on cosmetics will increase and will

have a bad impact during Recessions.

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