Competitors Analysis

Competitive Forces: Porter's five forces

 

Micheal Porter identified five forces that determine the attractiveness of a market or market segment: Industry competitors, Potential entrants, Substitutes, Buyers and Suppliers.

• Segment Rivalry: A segment becomes unattractive if it already contains a strong or aggressive competitors. In this case the strong competitors for Amul are Britannia, Nestle and Mother Dairy. This leads to price wars and ad wars.
• New or Potential Entrants: The local or new entrants will have tough time entering the market as the entry barrier would be quite high due to the existing tough competition. I feel this is quite an attractive segment when it comes to entry of potential customers.
• Threat of Substitute Products : Threat of substitute products means the threat of a new product substituting the company's product. In case of butter  a substitute could be margarine or low fat/ calorie/ cholesterol butter options. In this way a threat to Amul butter could be Nutralite butter.
• Bargaining power of buyers and suppliers:  The segment becomes unattractive if the buyers or suppliers have high bargaining powers. In the case of Amul Butter, due to competition and enough buyers and suppliers, I feel the segment is quite attractive.

Analyzing competitors:  Amul Butter as a market share of around 86% clearly making it a winner in the butter segment. The only competition for Amul are Nestle, Britannia and other small players(including local players) which together comprises of 14 % .

During competitor analysis companies first identify primary competitors and group companies with similar strategies together. After identifying main competitors, the company identifies its rivals objectives, weaknesses,strengths and driving force.

Due to its strong brand image and years of expertise in the industry, I feel Amul Butter will continue to dominate  the butter segment in the future.