The key players operating in the global protein supplements market include The Nature's Bounty Co. (US), Glanbia plc (Ireland), Herbalife Nutrition Ltd. (US), GlaxoSmithKline plc (UK), Abbott Laboratories (US), Amway Corp (US), GNC Holdings, Inc. (US), Vitaco Health Group (New Zealand), Living Essentials Marketing, LLC (US), and Garden of Life, LLC (US). The market comprises tier-1, tier-2, and local players. The tier-1 and tier-2 players have a global reach along with diverse product portfolios. Companies such as The Nature's Bounty Co., Glanbia plc, Herbalife Nutrition Ltd., GlaxoSmithKline plc, and Abbott Laboratories dominate the global market due to brand reputation, product differentiation, financial stability, and diversified regional presence.
The players are focused on investing in research and development and adopting strategic growth initiatives such as acquisitions, product launches, and expansions to strengthen their market position and capture a large customer base.
Michael Porter’s Five Forces model offers a framework to study the global protein supplements market. Strategic business managers, trying to gain an edge over competing firms in the global protein supplements market, can utilize this model to better comprehend the industry in which the company operates. The components of each of the forces and the degree of impact of each element in the context of the global protein supplements market have been broken down and analyzed.
THREAT OF NEW ENTRANTS
The global protein supplements market is highly lucrative with numerous revenue opportunities owing to the growth potential. However, the need for high initial investments due to raw material costs, certification costs, and approvals from regulatory bodies restrict the entry of new players. New entrants in the market also have to incur costs associated with production equipment, skilled labor inputs, and maintenance. This makes it difficult for them to achieve economies of scale which the established players already possess.
Hence, the threat of new entrants in the global protein supplements market is expected to be moderate.
BARGAINING POWER OF SUPPLIERS
The suppliers in the global protein supplements market are milk producers, farmers, distributors, importers, and independent suppliers. There are several suppliers present across the globe with limited raw material differentiation. This lowers the switching costs for the manufacturers of protein supplements. However, the market players tend to enter into long-term contracts with suppliers and maintain strong relationships to ensure uninterrupted supply of raw materials.
Hence, the bargaining power of suppliers in the global protein supplements 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 at low prices with improved customer service. The number of consumers of protein supplements in the global market is increasing exponentially. With the presence of large industrial players with extensive product portfolios, the switching costs for buyers reduce. Moreover, the consumers are well-educated about the product and have limited brand loyalty.
Hence, the bargaining power of buyers in the global protein supplements market is expected to be high.
THREAT OF SUBSTITUTES
There are no direct substitutes available for protein supplements. However, there is a high level of internal substitution. The widespread adoption of veganism has led to consumers switching to plant-based protein supplements.
Hence, the threat of substitutes in the global protein supplements market is expected to be low.
INTENSITY OF RIVALRY
The protein supplements industry is marked by high intensity of rivalry. The established market players in the market compete based on quality and price, thus making the industry competitive and reducing profit potential for the existing firms. Market players are trying to gain market share through frequent product development but the presence of small-scale suppliers is impacting their growth.
Hence, the intensity of rivalry in the global protein supplements market is expected to be high.
