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Table of Contents

Business Plan: To introduce cosmetic products for men in Saudi Arabia - Part 3

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5. COMPETITORS ANALYSIS

The main competitors of Crystal Care Limited will Gillette, Revlon, L’Oréal,, Chanel, Dior, Lancôme, and Givenchy [1]etc. All these firms which have been mentioned have established themselves in the industry from a long time and they have excellent distribution chain along with stores located worldwide. The brands charge prices according to the markets in which they are selling their products. The assessment of the competitors will help the firm by identifying their potential strengths and weaknesses. Crystal Care Limited can learn from its competitors and can adopt a channel of network to enhance its efficiency.

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The company will use marketing tactic of enhancing product features, as competing with such brands will be challenging job. It will focus on being the only company that has products specially designed for men considering the rising needs of men in the domain of skin care products. Crystal Care Limited will adopt new practices to penetrate in the industry and expand globally in the future. Increasing sales as the time passes will enhance the potential of growth for the company. This will also increase the company’s stability and it will enhance the profitability of the company. This can be done by enhancing the public image of the company at more effective level than competitors. Well established position of the competitors also forms ground that Crystal has planned to carve its respective share by entering market with products designed specifically for the specific segment.

5.1. CORE COMPETITORS

The analysis of the competitors is necessary to assess the strengths and weaknesses. This helps in assessing the chances which are available as opportunities and threats for the new company to enter the market.

GILLETTE: 

Gillette has a long history with its establishment dated back in 1901. From 2005, Gillette is operating as a subsidiary of Procter and Gamble. Gillette has a wide range of product offerings for the grooming and skin care products for men. This includes razors both power and manual, shaving products and accessories. In addition, it also provides range of scrubs, face washes, moisturizers etc.[2]

Gillette is the dominating brand that is used by the men in KSA. Gillette accounted nearly 34 percent value of grooming product market share in KSA. Men in KSA have high level of trust on the brand of Gillette and consider its eponymous range in specific content to men shaving requirement[3]. Gillette have increased its share in the men’s grooming market just in the context of providing shaving related needs; Due to lacking on the front of skin care and hair care products it lost share percentage in overall market (9). However, company retains high potential to challenge the presence of Crystal Care products with the introduction of skin care and hair care products for men.

Best rating skin care products for men from Gillette are presented in images below:

cream

[4]GIVENCHY:

Givenchy is another brand with popular acceptance in class that has brand conscious. Givenchy is available in company outlets in three target cities in KSA. All these stores are present in shopping malls in the cities of Al-Khobar, Jeddah and Riyadh[5].

Givenchy also holds long history in luxury brands. Givenchy is known since 1987 as a part of LVMH. The brand operates in two directions of fashion and fragrance cosmetics. The brand has always retained its popularity for offering chic and fantasy touch to its products[6].

The skin care products that are specifically designed for men by Givenchy includes as follows:

men's skincare

men's skincare

[7] [8]

REVLON

Revlon is one of the major competitors in cosmetic, fragrance, personal care and skincare industry. The company was founded in 1932 by Joseph & Charles Revlon and Charles Lachman. The headquarters is located in New York, US. It is a major company with it’s with more than 6800 employees. Revlon offers range of beauty and skin care products for men and women including fragrances, skin care, hair color etc. The products of Revlon for men have strategically competitive pricing, natural ingredients and easy products to increase usage (Revlon, n.d).

This company is a major competitor because it has a large variety of products to attract customers. The company has several core competencies and competitive advantages along with affordable costs which makes sustaining of new entrants difficult.

L’OREAL

It is the largest company in the industry of personal care. It is headquartered from France and has sales and distribution channels located globally. It has a wide range of cosmetic and beauty products. The company was founded in 1909 by Eugene Schueller. Company also offers wide range of products for men along with being the dominant market player in women cosmetics (Loreal, n.d.). L’Oreal offers products for men for hair, skin and face care. Company also offers products at affordable prices in many countries of the world (Srinivasan, 2012)[9].

L’Oreal seeing growth in KSA market announced the development of subsidiary in KSA. The subsidiary will operate in joint venture with Al-Naghi group. This will also increase the presence of company products across the broad[10].

OTHER COMPETITORS

All companies mentioned as competitors hold standing in the cosmetics for men and women. Other companies such as Chanel, Dior, Lancome are all present in the KSA with dominant presence in malls of Jeddah and Riyadh mainly [11]. This competition from these brands will be dealt with by actively conducting marketing and increasing the awareness of the products as critically designed considering the hygienic and other sensitive factors affecting oily skin type of men. This differentiated marketing will enable Crystal Clear in developing its position in the market.

5.2. SWOT ANALYSIS ON THE BASIS OF COMPETITION

The biggest strength of the company will be its differentiated marketing campaign and product positioning. Where all competitors are increasingly focusing on the fashion orientation of the customers’, Crystal Clear will develop its position on being the necessary product for the type of skin it is targeting. Further, its superior quality will in term of specific product designed for the specific issues of men skin, will add value of brand among customers. Outsourced procedures for distribution and offering online sales will increase the potential growth of the business. Crystal Clear has strength that it is opening its own retail outlets that will provide it strong physical presence to deal the competitive pressure in terms of physical presence.


Weaknesses

The weakness of the Crystal Clear products lies in the fact this is a new business and other competitors are operating in the industry for a much longer period; hence can flex muscles to pressure the new entrant. And company in the initial years is already having cash pressures. Further, as compared to other competitors the product range of the company does not extended lines to offer. Crystal Care limited targeted Niche segment with brand consciousness hence it may take time to establish its brand equity in the market.

Opportunities

Crystal Clear business is available with increased number of opportunities in the market of KSA. Trends of the market in KSA today are changing. Men are increasingly taking care of their appearance and beauty extensively which will create chances for introducing new products in the industry. The double digit growth of the market has opened up avenues for growth in KSA. Operating online will increase the customers of the business.

Threats

Despite increased attraction, market of KSA for men grooming and skin care products are posing significant threats. Excessive dominance of big brands is the biggest threat for the company. Being a new company in the industry will make chances of survival and sustainability difficult. Company is posed with threat from the cultural factor that may increase pressure to accept the Halal products only as well factors that affect the beard to be resisted from adoption. Hence, any time if mandated by government or religious scholars or ban on use of such products may affect the business[12]

5.3. COMPETITIVE ADVANTAGE

The businesses today require acquiring the essential element of competitive advantage over competitors to survive in market. This is essential for survival of the company in the industry. Crystal Care Limited has a competitive advantage of being a company which has products for men with sensitive skin and are unable to deal with oil related issues of skin with ordinary product. All the cosmetics and skincare products company don’t primarily target the male segment with such detail. Crystal Care is unique because it is targeting the niche segment among the men. The changing trends in the attitude of men and their developing interest towards skincare have created new opportunities for the business. This has increased the chances for the businesses to expand in a new developing segment.

The competitive advantage which the company aims to acquire is minimizing cost and increasing its sales by targeting the high income class of KSA that is increasing attention towards the grooming of men with specific skin care products. Further, the product positing of the company will also remain as product designed for men’s need to deal with oily skin than being fashion product only. This will increase the sustainability of the company against adversely dealing competition. This is because the competitors are more established and they are operating in the industry for a longer period. Acquiring cost advantage will also improve the profitability of the company which will give it more time to survive the pressure of competition. Crystal Care will be newly incorporated company and it has a motto of customer satisfaction. It must be ensured that the quality of the product must be of superior with standards much higher than competitors. The target market for the product is the Niche segment hence it must be ensured that the end product which the customers receive is of quality meeting the demands of the target niche that will be paying higher price for the product. The customers must not be dissatisfied from the products. A satisfied customer will help the company in future goals and in acquiring its targets.

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[1] http://www.arabianbusiness.com/brand-cosmetic-sales-set-rise-in-middle-east-403524.html

[2] http://investing.businessweek.com/research/stocks/private/snapshot.asp?privcapId=29004

[3] http://www.euromonitor.com/mens-grooming-in-saudi-arabia/report

[4] http://www.gillette.com/en/us/Products/skin-care.aspx

[5] http://www.mystore411.com/store/listing/1264/Saudi%20arabia/Givenchy-store-locations

[6] http://www.givenchybeauty.com/

[7] http://www.givenchybeauty.com/skincare/skincare-bycategory-mensskincare

[8] http://www.givenchybeauty.com/skincare/skincare-bycategory-mensskincare

[9] Srinivasan, L. (2012). L’Oreal draws up 3 pronged strategy for growth. http://www.financialexpress.com/news/l-oreal-draws-up-3pronged-strategy-for-growth/1087089

[10] http://www.loreal.com/press-releases/loreal-creates-a-subsidiary-in-saudi-arabia.aspx

[11] http://www.mystore411.com/store/listing/2450/Saudi%20arabia/CHANEL-store-locations

[12] http://www.gcimagazine.com/marketstrends/consumers/men/12307996.html

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