Care Your Skin has a low
threat of new entrants as skin care and cosmetic are competitive firms and its
competitors are selling dissimilar products. For instance, Care Your Skin
offers 100% purely organic products to its customers while other companies
offer their product that may contains synthetic chemical inside. Care Your Skin
has a strong brand image and has its own customers whether from local or foreign
are loyal to its brand. Therefore, it is difficult for new entrants to set up a
strong brand identity in short period of time. Additionally, a new firm would
need to have a large financial capital to access the industry such as capital
for production and setting up a store.
The bargaining power of
suppliers in cosmetic industry is likely to be low due to the large number of
suppliers accessible on the market. Thus, suppliers do not have the capacity to
influence the market price of the product. Besides, the cost and the level of differentiation
of inputs is low.
In cosmetics and skin
care industry, the degree of customers’ bargaining power is strong. Customers
can easily shift to other brands due to the availability of substitute products
in the market. This may compel the company to lower its products’ prices.
Therefore, Care Your Skin can remain its product with high quality at lower
prices to attract more customer to its business.
As mentioned before,
cosmetics and skin care are competitive industry and there are many competitors
offer similar products in the market. Hence, Care Your Skin faces a high threat
of substitute products. For example, customers can switch to another brand if
they are not satisfied with the quality and the price of Care Your Skin.
The intensity of rivalry
among existing competitors is high as there are many competitors in cosmetics
and skin care industry providing the homogenous products and services at
different price. As a result, high rivalry determines the competitive position
of Care Your Skin in the market for cosmetics and skin care industry.