In general entering into the Household and Personal
Products industry is tough. Reason being, as most of the products are soap,
detergent, toothpaste, and cosmetics; consumers have long been purchasing these
products so there is little incentive to actively seek out different products
from purchase to purchase. Additionally, the barriers to entry within
the industry are rated medium but increasing. This keeps competition from
entrepreneurs low because of the difficulty in entering the market. One of the
largest barriers is the high costs entering the Household and Personal Products
Industry. Though it is easy to launch small businesses
within the industry because of the minor technological skills and financial
resources required and because the ingredients used to produce the products are
common, the costs of manufacturing, marketing and distribution are high. This
results in large corporations dominating the industry. Specifically, cosmetic
and beauty products manufacturing requires a factory and production equipment,
which can add up to a substantial cost. Acquiring the financial means to start production
and continue at a profit is increasingly difficult. Clorox Company states that
newly introduced products face intense established competition and, as such,
requires substantial advertising and promotional resources. This is very true
with the most well-known brand names belonging to this industry which serves as
a large deterrent for new entries.
Recently, however, there is hope for more entrepreneurs
to enter into the industry. This is due to the new “green” trend. The search
for more environmentally friendly products with natural ingredients is
increasing in demand. A great example of a successful entrepreneurial entry
into the
industry is Rockin' Green, a maker of
eco-friendly laundry detergent and cleaning products . The company’s founder, Kimberly Webb, was named “Best
Entrepreneur” and the company named the “Fastest-Growing Company of the Year.”
Though there are some instances of entrepreneurial success the numbers are
small. The development of new innovative products,
the maintenance and improvement of existing products or the extension of an
existing product range are the major demands within this industry thus it is
very hard to accomplish for new entrepreneurs who lack capital to mass produce,
market, and distribute. Therefore the competitive landscape has not changed
much due to leading entrepreneurs.
Sources:
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