Porter's five forces model

Buyer Power:
The buyer power is weak since the customers are fragmented. They do not have a big influence on the price they pay for the domestical products. It is not the same when we think about the distributors who have a big buyer power. For example, if Wal-Mart decide that a price is too high, it can have an important impact on P&G.

Suppliers Power:

The suppliers power is important because it is very costly to switch suppliers. The production of Procter and Gamble is very big so are the supply. If they change suppliers, the supply chain will probably change also and those changes requires a lot of time and money. On the other hand, P&G has also a important power over their suppliers because of the importance of their demand. Therefore, on both sides they are limited.

Substitutes:

There is possible substitutes for P&G products. Since most of their products are domestical, customers could decide to go with the homebrand that are less expensive. This is where the branding take all of its importance. Another substitutes could also be that the customers decide to create their own domestical products. An exemple would be to wash their windows with water and lemon juice or to use washable diapers.

Current competition:

It is really important to be aware of the competition in the market of a company. It affects the global strategy by having an effect on the demand and offer law. There is currently three main competitors to Procter and Gamble.

Johnson and Johnson is the biggest competitor of P&G. With theirs brands such as O.B. or Aveeno, they offer very similar products.

Unilever is another important competitor. They own the brand Sunlight and Dove, which are a close competition to Tide and Oil of Olay

Finally, Kimberley-Clark is the last important competitor. Kottex and Huggies are both sharing the market with P&G brands of Tampax and Huggies.

Potential competition:

The potential competition is not a really big threat.The barrier to entry are really big because the four company mentionned above worth a lot of money and there is a big capital investment needed. The branding is strong and they would have the strength to compete if they was a new competitors. Also, people are strongly attached to the brand that they know. They want the brand they like, even though another brand would be less expensive.