Nivea Porter’s 5 Five Forces Model: Detailed Analysis (2021)


Nivea Company Overview:

 

Nivea is a total body care producer, with its origins in 1911 Germany. It has expanded to become the number one seller of beauty and personal care products worldwide. Brands within Nivea include Beiersdorf, Labello, Nivea for Men, Aqua Velva, Creme 21,5,5, Nivea Sensitive, Q10, Sun Protection. L’Oreal acquired Beiersdorf in 2005 for 4.45 billion Euros ($5.3 billion). Today we will go over Nivea’s Porter’s Five Forces Model Analysis, so we can understand where the business stands in 2021 and beyond.

 

 

Nivea Competitive Rivalry:

 

 

There are several competitors of which are direct rivals with the company. Many companies have similar products, while some may pose a threat if it is able to expand their market more rapidly. The firms that have the same total body care products as Nivea are Johnson & Johnson, L’Oreal, Procter & Gamble Co., and Unilever ( Here is Unilever Porter’s Five Forces). While the competitors that pose a threat if they were to expand their markets faster than Nivea is Dove, Shiseido, Vaseline, and Olay.

 

 

Nivea Bargaining Power of Suppliers:

 

The suppliers are the companies that provide raw materials for Nivea to use in order to produce its products. The bargaining power of suppliers is very high due to how essential these materials are for Nivea’s existence. Although the materials may be essential to the company, Nivea is able to offer competitive prices for these materials. This makes it possible for Nivea to keep its cost down and be profitable, as well as keep the suppliers happy even though they have high strength.

 

 

Nivea Bargaining Power of Buyers:

 

 

The bargaining power of buyers is medium because there are various buyers for Nivea’s products, but not all of them have the same demand for the company. One type of buyer is a retailer that purchases Nivea’s products and then sells to its customers at a retail price such as Walmart or Safeway. Then, there is also the consumer that purchases Nivea’s products directly from the store, or online if they are buying on websites like Amazon. Since Nivea has multiple buyers with different demands, it is hard for them to have high bargaining power even if there are many of them.

 

 

Nivea Threat of New Entrants:

 

 

The threat of new entrants is medium because there are various barriers that limit new companies from entering the total body care market. However, if a company is able to go over these barriers, the threat becomes high. The entry barriers for Nivea include economies of scale, capital requirements, product differentiation, and even research and development costs. Even though, there are multiple entry barriers for new companies to enter this market; other factors play a big role in the threat of new entrants.

 

 

Nivea Threat of Substitutes:

 

 

The substitutes are other total body care brands that have similar products as Nivea does. The strength for this factor is low because there are not many substitute products that compete with Nivea’s beauty and personal care products. There are some brands, however;  like Dove, Vaseline, and Johnson & Johnson.

 

 

Nivea Porter’s 5 Forces Conclusion:

 

Even though the threat of new entrants and substitutes is low; all other forces are medium to high. This shows that Nivea does have a mixture of strong and weak factors within its competitive environment. These factors can change depending on whether there are entry or exit barriers in place.

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