SWOT Analysis

Strengths

 Strong Distribution Channels: Surf Excel is driven by the Unilever Distribution strategy,
where they had a Registered Wholesaler(RW) for each region who was in turn
responsible was distributing it further to all the salesman in the region. As Surf Excel is
an FMCG, HUL had to make sure that the retailers' shelves were replenished in time. So
they built warehouses and depots all across the country, and then, all the stock was
routed from these warehouses to RW by Super Stockiests.

 Strong Brand Image: The brand has been in the market since 1947 and has steadily
gained credibility among the consumers. It has invested heavily on ad campaigns which
have also contributed immensely to creating a strong brand name. Its tagline “Daag
acche hai” is very popular amongst its target group.

 Unilever Support: Unilever has a strong portfolio in the detergent segment and has a
hold of the South Asian market in the category. Surf Excel, being a premium brand under
Unilever’s Umbrella is strongly supported by them.

 Multiple Variants: Surf Excel has an array of products which cater to different market
segments. It has variants like Surf Excel Quickwash, Surf Excel Easy Wash, Surf Excel Bar, Surf
Excel Front Load Matic, Surf Excel Top Load Matic, etc.
 Weaknesses

 Rural penetration: Since Surf Excel is marketed in the premium product category, its
rural market penetration is quite low, part of the reason being lack of brand awareness
and its pricing strategies which are causing a hindrance in realizing its full potential in
the rural market.
 Competitive Market: Surf Excel operates in a highly competitive market due to which it
has to face the pricing pressure along with a constant fight for market share.

Opportunities

 Rural Market: Surf Excel has a great potential to capture the untapped rural market and
as it has low penetration it could focus on expanding in the market by strategically
pricing its products.
 Growth in the Detergent Market: The detergent market has been growing at a CAGR of
13% for the past 5 years and the forecasts are that it would grow at a similar pace in the
coming years.
 Higher Disposable Income: The disposable income in a developing country like India is
growing at a rapid rate which is really beneficial for a premium product like Surf Excel.
Threats

 Strong competitors: Brands such as Ariel and Tide backed by firms like P&G which have
deep pockets makes it difficult to operate at a high profit margin.
 Market cannibalization: Unilever has three brands in the detergent segment, Surf Excel,
Rin and Wheel, so, despite having different target customers, overlapping is induced in
the same market segment.
 Low Profit Margins: In order to keep the market share in a competitive market in which
a threat of new entrant and strong existing players always looms over, Surf Excel has to
operate on low profit margins.

Porter’s Analysis
 Bargaining power of Suppliers

Low Very Low Very Low

Premium Segment
Better Quality product is the
only bargaining chip.
Mid Price Segment
Multiple Vendors in this
Low Price Segment
Soda ash even of not a high
segment willing to provide quality works, hence multiple
same quality. vendors available.

Bargaining power of suppliers depend on the quality of soda ash they can provide and the
competitors they have in that segment which could provide similar quality. But again, procuring
a material such as soda ash is not that difficult an ask. Also, suppliers are not in a position to
lose contracts from a behemoth such as HUL or P&G. Hence, the bargaining power as a whole is
low and in some segments its lower than others.
 Bargaining power of Buyers

Medium High Very High

Premium Segment
Less competitively priced
Mid Price Segment
More number of players
Low Price Segment
Customers are price sensitive
compared to other two leading to offering of and respond positively to low
segments discounts to remain in play price

Bargaining power of the buyers is influenced by how competitively priced and how
differentiated the products were across segments. It also depended on the number of options
the buyers had in terms of brands. Also, in segments where brands aim at providing value for
money, the bargaining power of buyers is even higher.

Threat of New Entrants

High Very High

Medium
Premium Segment Mid Price Segment Low Price Segment
Entry barriers are low and Similar to Mid Price Segment
Difficult to get to loyal
Economies of Scale further and achieving Economies of
customers
helps the cause Scale even easier

Being an FMCG sector, it is very easy to achieve economies of scale and even a small price
difference can make a huge impact. Barring the premium segment, the entry barriers are low in
the other segments and it’s easy to enter the market. Even in the premium sector, barring to
cracking the code of catering to loyal customers (As there are less options, customers tend to
stick to the brand they are comfortable with), market entry here is also easy.

Threat of Substitutes

High Medium Low

Premium Segment
More willing to spend on
Mid Price Segment
Huge market size negates the
Low Price Segment
Hardly economically viable
maintenance and options such effect of substitutes to an substitutes available for
as Dry cleaning are available extent. fabric washing.

The degree of threat of substitutes varies across segments. As we move towards a higher
segment, people have a higher disposable income and also have higher willingness to spend
more, which leads to more options and in turn, usage of different substitutes such as dry
cleaning.

Competitive Rivalry

Very High
High
Premium Segment Mid Price Segment Very High
Low Price Segment
More number of players in
Its easy to switch among Highly price sensitive hence
the market and there's also
brands brand switch is vey easy
inter-segment competition.

Competitive rivalry is high because consumers have a lot of options to choose from and
transition from one segment to other is also easy which leads to inter-segment rivalry.
Customers have a certain perception of quality vs money trade-off and they are willing to
compromise a little on quality if they could get a product which is low priced. Hence, there is
hardly any sense of loyalty among the consumers.