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Water-soluble tissue - Research Paper Example
The global tissue paper production has been estimated to be over 20 million tons (ETS, 2014). Based on the per capita consumption of 2011, the global per capita consumption has been…
It also includes the marketing strategy of water soluble tissue paper for Qatar.
Power of Buyers: The power of buyers can be described by the switching cost involved in shifting from one brand to the other. The tissue paper industry is saturated with several well established manufacturers like George Pacific, Kimberly Clark, SCA, P&G, etc which offers water soluble tissue papers (SCA, 2014). Thus it gives the customers a lot of options to choose from. Moreover due to high availability and competitive pricing it is even easier for the buyers to switch between brands. As a result the rival company goes into a price war by offering lower or discounted price in bulk to attract more customers. Thus the influencing effect of the buyers on the pricing suggests that the power of buyers is high.
Power of Suppliers: The tissue paper manufacturing companies procure the raw materials like recycled paper pulp, chemicals adhesives, etc from global suppliers (Carlsson et al, 2006). Although the availability of suppliers are high in the industry, but the supply often fails to meet the market demand. The low supply of raw materials is due to low availability of recycled paper and high regulation over deforestation. Thus the overall supplier’s power is moderate.
Threat of new entrant: Entering into the soluble tissue paper industry, a firm does not require high capital investment, as the cost of raw materials and other production costs are relatively low. Moreover, in the tissue paper market, the concept of water soluble tissue paper is a relatively new. Thus any new entrant will have an early mover advantage. This as a result leads to low barrier to entry in the market, which increases the threat of entry of new brands. Thus the overall threat of new entrant is high.
Threat of Substitutes: A substitute product is defined as any product ...