The basic consumer goods have a variety of substitute products. Unilever produces a wide range of consumer goods in various categories. Beginning from food and going up to personal care and home care products, Unilever has a solution for all. However, the threat of substitute products for this particular organization seems to be staying limited or moderate. Unilever gives excellent quality products and its competitors are not able to produce the same accuracy. Thus, Unilever is not faced with considerable competition from the substitutes for its original products.
Many companies are thrown out if a competitor stronger than them enters the market. Unlike them, Unilever does not give anyone such a chance to spoil its market share. This is due to the fact that Unilever functions on the basis of economies of scale. By producing and selling at large scale, the company is able to cut its cost per unit and has attained economies. This creates a barrier for the new firms who are entering into the FMCG market.