Porter’s 5 forces model
Competition in the industry
Moderate: There is a lot of professional hair care products available. However, very few of them are organic or semi organic. The main competitors are L’Oréal, KeraCare, and Kerastase.
Potential of new entrants into the industry
Low: In France, hair care products are considered as part of the cosmetic industry. French government has strong requirements concerning the launch of a cosmetic product. These requirements are design to ensure customers’ health security. Therefore, the threat of new entrant is low in the French market
Power of suppliers
Low: There exist hundreds of different hairdresser’s salon in France, including afro-hairdresser’s salon. Moreover, it is possible to sell online. A lot of French people are looking online for professional hair care products for their daily use.
Power of customers
Low: MPV Hair’s customers are people with African roots. In France and its islands, in 2017, 39% of the population has African roots. Furthermore, people are looking for professional hair care products for their daily use. The demand concerning organic products also increase, which means the demand for MPV Hair’ products will be high.
Threat of substitute products.
Low : There is not a lot of substitute products in hair care industry.
According to Porter’s 5 Forces model, the french market seems to be an attractive market for the MPV Hair company.
Analysis of market factor (PESTEL)
The contribution of the cosmetics and personal care industry to Europe’s economy is very important and continuously growing. Europe is a major exporter, employer, and investor in research and development in personal care products, which is why France would be a considerable market for MVP Hair to enter. According to “Consumer Insights 2017”, a survey done to provide information about consumers in the European market, hair care products makeup 85.06% of the personal care and cosmetic industry. There are many competitors in this industry that need to be analyzed before starting a new company or moving forward with an existing company. Most Valuable Product have been selling in Ghana and other African countries since 1998. MVP hair continues to research new ways to compete in the ever-growing market. There are five main competitors to MVP Hair that will be discussed. These brands are known worldwide and their products are sold online as well as in-stores and salons in many countries. The first and largest competitor to MVP Hair is Head ; Shoulders. This company mainly focuses on shampoos and conditioners to treat dandruff but offers some variety of other products as well. They released a new line of products, the “Royal Oils Collection”, in order to reach an even wider range of consumer groups. This collection is made up of six products developed specifically for African American hair. It is designed to relieve the scalp and moisturize hair for all natural, relaxed, kinky, and coily crowns. Head ; Shoulders also offers a line of hair products for men, which is what MVP Hair is looking to do. They do not boast about using “natural” ingredients in their products, which could be an advantage to MVP Hair. Head ; Shoulders is known worldwide and is sold at a reasonable price for consumers. The next competitor is Franck Provost, “The professional answer for all hair types around the world”, as stated on their website. This brand offers a wide range of hair products and is present in many different countries’ markets. They do not offer an African-American specific hair product line which makes them less of a competitor for MVP Hair, but the do offer a simple line for men. Franck Provost created three shampoos designed for men called “100% Man”. This is similar to what MVP Hair is thinking of creating in the future. MVP suggests that men only need two products for their hair, a shampoo and a moisturizer. Franck Provost offers three shampoos for men but no moisturizer. Provost also boasts about his use of natural and healthy ingredients like keratin, creatine and UV filters in his products. More importantly, he uses Jojoba oil as well as avocado oil, similar to the ingredients MVP Hair uses in their products. The third competitor in the hair product industry is Schwarzkopf. This company is offered in 30 companies around the world and sells a variety of products like shampoos, conditioners, oils, dry shampoos and hair masks. They advertise products based on their customer’s hair type- thin, frizzy, damaged, etc., as well as advertising based on what consumers will be using the product for- straightening, combing, protecting. There are five different brands within the Schwarzkopf name. These brands include göt2b and göt2b Color, GLISS, Keratin Color, and ULTÎME, but the main brands associated with hair care are göt2b and GLISS. They do not offer any line of African American products nor do they specifically market to men. Another world-famous competitor who began operations in France in 1904 is Garnier. This company is present in 20 different countries and offers six different hair care brands for consumers. These brands include Fructis, Fructis Style, Whole Blends, Nutrisse, Olia, and Color Sensation. Garnier highly promotes their use of natural ingredients like avocado, essential oils and coconut, which is also similar to Franck Provost and MVP Hair. They sell products based on need of consumer like anti-frizz, curls, color care, etc. Garnier does not offer any products specifically for African Americans nor men, but they promise that they offer products for everyone with their Whole Blends line of shampoos and conditioners. L’Oréal is the last competitor for MVP Hair. They offer many different hair products similar to the other competitors which include hair masks, oils, serums, and treatments. L’Oréal also has multiple other brands within the L’Oréal hair care brand. Ever, Hair Expert, Elvive, and L’Oréal Kids all offer a wide range of products for different consumer groups.
All of these competitors each have their own reasons as to why they are a strong competitor to MVP Hair. They have all been established for quite sometime in the French, hair-care market, and have expanded to many other countries already. Head ; Shoulders is the biggest competitor because it already has a product line for African Americans as well as for men. The only way MVP Hair can distinguish themselves is by moving forward with their plan to offer products for specifically African American men. Franck Provost and Garnier use and promote natural, hair-healthy ingredients in their products but do not offer any type of African American hair products, so this is where they can fall short and MVP Hair could take over the market that those companies are missing out on. Schwarzkopf and L’Oréal are both well-known hair brands that hinder MVP Hair from successfully entering the French market.