Caso axe

2010
IPM 2
Silvia Fernández Ruiz
14/10/2010

Axe
Case Study

We are going to analyse the global personal care category in the European market. With this purpose we will start doing an external environmental analysis, after we will do an internal analyse and we will finish with some recommendations for Axe.

External environmental analysis

Pestel analysis (E.U market)
Politicalfactors: Political stability, Value Added Tax has increased in many European countries, non state intervention.
Economic factors: Recovery of the economic cycle with low but positive levels of PIB but there is still a high level of unemployment in many European countries.
Socio-cultural factors: Decrease of the birthrate, recovery of the consumption levels, health and beauty now matters to men, everyday people is more worried about our physical appearance, aging...
Technological factors: Every day, the life cycle of the products is shorter. Big companies keep the same level of research and development investment.
Environmental factors: We have to bear legislation about environmental protection, industrial waste and energy in mind.
Legal factors: We have to bear legislation about EU,industry, competition, health, security and advertising in mind.

Porter’s five forces analysis
Competitive rivalry within the industry: There are some companies in the market such as P&G or L’Oreal with important market shares (the market share of each player indicates how important that competitor is). We see as well that there is not much differentiation between players and their products,so TAG’s, AXE and Men Expert’s products has to differentiate them with their image, positioning and values transmitted. This situation will probably cause in the near future a price competition. On the other hand there are high market growth rates and low barriers for exit which make this market more attractive.
Threat of new entrants: The male grooming market is continuing to expand, there arenot high initial investments and fixed costs for manufacturers of consumer packaged goods, there are high profit margins in this market, that’s why I think that very soon there will be more players in this market.
Bargaining power of suppliers: Good and close relationship with them long term.
Bargaining power of customers: The first client of Unilever, P&G or L’Oreal, is the retailer (thecompany who distributes their products to the public), that’s why firstly they have to negotiate with companies such as Carrefour, Galeries Lafallete and/or others depending of the positioning and the distribution chosen by the manufacturer. In this case, the clients are concentrated and buy large volumes of product. Moreover, the product is undifferentiated and can be replaces by substitutes (manybrands). Switching to an alternative product is very easy, not related to high costs and they can sell as well their own products (distribution brand).
Threat of substitutes: With personal care products, customers have preferences but if they don’t find the product that they are looking for, probably they will try with another one (TAG, Men Expert, Distribution brand...), so there is a low brandloyalty. We can increase the brand loyalty of our customers creating close relationships with them and making our product different and unique with our positioning, communication and other tools that we will study later.

Internal and Swot analysis
Threats
Probability
Importance
HIGH
LOW
LOW
HIGH

Actual competitors  L’Oreal,P&G
Substitutive products  TAG, Men expert,Distribution brand…
Saturated market for women
Bad economic climate  we postpone our purchases

Low GDP in European countries

Decrease of birthrate

Product’s life cycle  shorter

VAT increase
Political disturbance

As we see in the matrix, the most important threats for Axe are the actual competitors such as P&G (with its TAG, Old Spice and Red Zone brands) Colgate or L’Oreal with...