Threat of New Entrants
The global men’s hair color market is large and highly competitive. The initial investments required are high and include production equipment costs, along with marketing, advertising, promotional, and certification costs. The market is fragmented owing to the presence of established players, along with local and regional players. The new players need to invest heavily in creating a brand identity through strategies such as innovative formulations, designs, and quality with the help of advanced technology.
Owing to the high returns on investment, backed by improving production scope, the global men’s hair color market has witnessed an increasing number of new entrants. But high R&D costs and difficulties in branding new product lines limit the scope of market entry and create barriers for new companies. However, such entry barriers are not applicable to the manufacturers of other cosmetic products willing to expand their business operations to men’s hair color as they already have established production facilities and brand names.
Hence, the threat of new entrants in the global men’s hair color market is expected to be moderate.
Bargaining Power of Suppliers
The suppliers in the global men’s hair color market include manufacturers and traders of dyes, modifiers, antioxidants, alkalizers, soap, ammonia, wetting agents, and fragrance ingredients. Numerous suppliers provide the raw materials required to produce men’s hair color, with limited differentiation in quality and price. Thus, manufacturers can easily switch between suppliers as they are not dependent on a single supplier, which reduces their operational risks. The suppliers are not only concentrated in one region but have a cross-regional presence, which further decreases switching costs.
Hence, the bargaining power of suppliers in the global men’s hair color market is expected to be low.
Threat of Substitutes
The global men’s hair color market is ruled by zero product substitution. There is no substitute available that can match the function of or demand for men’s hair color. However, there is a certain degree of internal substitution in terms of type of ingredients used and product form, which has a very low impact on the overall market.
Hence, the threat of substitutes in the global men’s hair color market is expected to be low.
Bargaining Power of Buyers
The bargaining power of buyers is the pressure consumers exert on businesses to offer high-quality products, optimal customer service, and low prices. At present, consumers are increasingly conscious of the products they purchase. Owing to the increasing number of hair color manufacturers in the market, the switching costs for consumers are expected to remain low. Consumers are also well-informed about the products and their brand loyalty is limited. Moreover, most consumers are price-sensitive and tend to switch to offerings with a comparatively lower price.
Hence, the bargaining power of buyers in the global men’s hair color market is expected to be high.
Intensity of Rivalry
The global men’s hair color market is marked by high industry rivalry. Established players are targeting rivals based on quality and price, making the industry competitive and reducing profit margins for all existing firms. Players in the global men’s hair color market have moderate production capacities and focus on strategic investments. Major manufacturers are inclined toward enhancing their production capacities, especially in emerging economies, owing to the high demand for the products.
Hence, the intensity of rivalry in the global men’s hair color market is expected to be high.
