Patanjali competes with both organized and unorganized players in its industry.
a. The industry is highly competitive with organized players like Dabur, Zandu, Baidyanath, Himalaya etc. These brands have established marketing channels in both traditional and modern retail and are present in the market since last few decades. They have a strong and loyal base of customers who has been using their products consistently.
b. The unorganized players include numerous ayurvedic centres , chikitsalayas and shalas which make their own products for their customers and also sell the same in the local market.
1. Bargaining power of buyers: Moderate
Buyers are looking for reliable ayurvedic compositions. Price and Quality of the product are the major determinants. Buyers do not hesitate to shift if a similar quality product is available at a lower price from a different manufacturer.
2. Bargaining power of suppliers :
Moderate to High Since this business is highly dependent on the right ingredient, suppliers have a good bargaining power. The bargaining power of the suppliers can be controlled by backward integration i.e. by establishing own herbal gardens and planting the herbs. Patanjali has controlled the bargaining power of suppliers by becoming a fully integrated organization. It provides end to end solutions in Ayurved.
3. Threat of New Entrants:
Moderate to High Since FMCG industry is capital intensive, the threat to Patanjali is not from new entrants in the segment. Major threat to Patanjali is from existing players in different segments for eg Colgate entering into the natural and ayurvedic segment through Colgate Active Salt – Neem. HUL is also reviving its herbal brand Ayush and planning to launch more products in the natural segment to compete with PAL.
4. Threat of Substitute Products
Low to moderate The substitute products depend on the respective product category but generally the category in which Patanjali Ayurved is present the threat of substitute ranges from low to moderate.