One other approach to analyze the environment of a business organization refers to using Porter’s Five Force Model. This model was given by Michael Porter who explained this concept as involving relationship between customers, competitors, buyers and suppliers (Business Resource Software, 2011). In business terms, this model is referred to as the business development strategy or framework for the industry analysis.
Unilever has been analyzed on the basis of Porter’s Five Forces Model as follows:-
- The bargaining power of Buyers
This factor goes on to explain the strength of buyers to bargain enough to put a competitive pressure on the firms following fixed costs by imposing their buying leverage, volume and price sensitivity. The powerful buyers can be threat to the company because they possess the ability to negotiate on the prices and by raising the company’s cost sending it out of the market. Unilever deals with its customers in reasonable ways. The bargaining power of buyers here seems to be considerably low. This might be because Unilever is a well-known FMCG company and carries its own goodwill and prestige in the market. The customers of Unilever possess a high level of loyalty and brand association towards their selected company.