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    Shreyan - Brighter Smiles For Masses

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    Vyshali Karu
    This document discusses the competitive rivalry between Procter & Gamble (P&G) and Colgate-Palmolive in the US oral care market. Both companies compete for similar customer segments with similar resources. While P&G has greater financial resources, Colgate launched a lower priced teeth whitening product that eroded P&G's market share of over 80% for its Crest White strips down to 42% within a year. The document analyzes the drivers, behaviors, and outcomes of the intense competition between these two major oral care companies.

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    Shreyan - Brighter Smiles For Masses

    Uploaded by

    Vyshali Karu
    63 views5 pages
    This document discusses the competitive rivalry between Procter & Gamble (P&G) and Colgate-Palmolive in the US oral care market. Both companies compete for similar customer segments with similar resources. While P&G has greater financial resources, Colgate launched a lower priced teeth whitening product that eroded P&G's market share of over 80% for its Crest White strips down to 42% within a year. The document analyzes the drivers, behaviors, and outcomes of the intense competition between these two major oral care companies.

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    EOS

    Original Title

    Shreyan_Brighter Smiles for Masses

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    This document discusses the competitive rivalry between Procter & Gamble (P&G) and Colgate-Palmolive in the US oral care market. Both companies compete for similar customer segments with similar resources. While P&G has greater financial resources, Colgate launched a lower priced teeth whitening product that eroded P&G's market share of over 80% for its Crest White strips down to 42% within a year. The document analyzes the drivers, behaviors, and outcomes of the intense competition between these two major oral care companies.

    Copyright:

    © All Rights Reserved
    Download as PPTX, PDF, TXT or read online from Scribd
    Download as pptx, pdf, or txt
    63 views5 pages

    Shreyan - Brighter Smiles For Masses

    Uploaded by

    Vyshali Karu
    This document discusses the competitive rivalry between Procter & Gamble (P&G) and Colgate-Palmolive in the US oral care market. Both companies compete for similar customer segments with similar resources. While P&G has greater financial resources, Colgate launched a lower priced teeth whitening product that eroded P&G's market share of over 80% for its Crest White strips down to 42% within a year. The document analyzes the drivers, behaviors, and outcomes of the intense competition between these two major oral care companies.

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    Brighter Smiles for Masses: Colgate vs P&G

    Group 8 | EoS Section A | PGP23


    Competitive Rivalry and Dynamics (1/4)
    P&G and Colgate-Palmolive face high competition competing in the same market with similar resources

    MARKET COMMONALITY

     P&G, Colgate-Palmolive competed in the U.S. market for oral care products Moderate Maximum

    MARKET COMMONALITY
    Competition Competition
     Target segment is similar for both products

    RESOURCE SIMILARITY Low Moderate


    Competition Competition
     P&G and Colgate-Palmolive both possess similar type of resources, in terms
    of proprietary technology, human capital and marketing

     There is a notable difference when it comes to the amount of resources, RESOURCE SIMILARITY
    where P&G holds a lead in terms of higher cash reserves and
    manufacturing capacity

     Resource similarity is classified as high since extent of similarity will have a


    slightly larger bearing on competition than amount of resources controlled
    Competitive Rivalry and Dynamics (2/4)
    High motivation to compete as teeth brightening set to become a $4bn market amid slow oral care segment growth

    DRIVERS OF COMPETITIVE BEHAVIOR RATING DESCRIPTION


    Awareness High
    • High similarity of resources between competitors
    • Both major players compete in same geographical market
    Motivation High
    • Both firms keen on maximizing their respective shares of
    the pie
    • Teeth brightening products as a segment showing faster
    growth than the oral care category as a whole, increasing
    attractiveness to all players in the industry
    Ability Moderate
    • P&G has greater financial muscle, with cash reserves nearly
    20x that of Colgate-Palmolive.
    • This increases their ability to outspend rivals in marketing,
    gives them higher bargaining power with advertisers
    Competitive Rivalry and Dynamics (3/4)
    Inter-firm rivalry led to erosion of P&G’s market share at the cost of Colgate’s gain

    DRIVERS OF COMPETITIVE BEHAVIOR DESCRIPTION


    First Mover Advantage
    • Launched Crest White strips and captured over 80% of the market
    Organizational Size and Resources
    • P&G is significantly larger than Colgate-Palmolive, with more than 3x net
    income and 20x cash reserves
    Product Quality
    • P&G’s Crest White fares better on quality parameters based on
    comparative product testing
    Competitive Response Strategic Steps
    • Colgate-Palmolive launched competing product at lower price point
    Tactical Steps
    • Priced significantly lower than rival product
    • Positioned strongly on user convenience (significantly lower usage time)
    Competitive Rivalry and Dynamics (4/4)
    Inter-firm rivalry led to erosion of P&G’s market share at the cost of Colgate’s gain

    OUTCOMES OF INTER-FIRM RIVALRY

     Crest White captured over 80% of the market share following its launch, yet the first mover advantage
    could not be sustained with the entry of a lower priced product by Colgate

     Colgate’s Simply White, priced at ~37% of Crest White captured 50% market share in less than a year of
    its launch.

     P&G’s market share dropped to 42% by November 2002. Their management team evaluating multiple
    tactical options to counter the competition

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