SWOT analysis of Nivea – Nivea SWOT analysis

One of the brands dedicated to Skin care throughout the 100 years of its formation is Nivea. The brand is loved by its users and people are known to carry the Nivea pack wherever they go, especially when traveling to colder climates. In the recent years, Nivea has really expanded its product lines with multiple products and their variants being introduced in the market.

Here is the SWOT analysis of Nivea

Strengths in the SWOT analysis of Nivea

The Cold cream domination – Nivea absolutely dominates the cold cream market. Whenever you are traveling to colder regions, you cannot do without your Nivea cream, the brand has that kind of hold on consumers. No other brand has reached the brand recall level of being a cold cream as Nivea has. The popularity of the brand lies because of its popularity as a cold cream – a niche which it covered smartly and all to well to date.

Brand equity – Naturally, because of its concentration on this niche, the Brand equity of Nivea is only growing and has not been affected. Over the years, Nivea has gained recognition for its brand and is the 225th brand in the world as of 2016 and is the 50th highest rated brand of Germany. The brand is valued at 6.7 Billion dollars.

Distribution and global presence – Nivea has around 20 products and is present in 50 countries overall. This contributes towards its distribution potential which is growing year on year.

Brand colors – The brand colors of White and Blue are recognizable in a huge shelf of personal care products. The colors have stayed constant over the years and are synonymous with the brand. For this, the Marketing department has received praise time and again along with praise for using the brand colors across the communication channels of Nivea.

Weaknesses in the SWOT analysis of Nivea

Competition restricting Nivea’s sale in other segments – Where Nivea is absolutely dominating in the cold cream segment and not allowing others to enter, others are not allowing Nivea to enter in their territory. Hence Nivea is finding it hard to establish itself in personal care segment with body care and facial care products because there is huge competition in this segment already.

Investment needed to change brand image – This is a double edged sword. On one side Nivea has a fantastic advantage by covering a niche which is profitable – Cold cream. But on the other hand, if it has to survive, then it needs to change its brand image and become more of a personal care brand. It is doing so for the mens cream. But the overall brand is strongly skewed towards cold creams.

Expansion – Many experts criticize Nivea because the brand is present only in 50 countries even though it has such strong brand image. A problem Nivea faces is that unlike FMCG companies, it does not have too many products in its brand portfolio. Hence it has to go slow with expansion. But saturation is a problem with Nivea and expansion is the answer for higher revenues.

Opportunities in the SWOT analysis of Nivea

Innovation with new product lines – Nivea has to keep adding products and product lines to its brand portfolio. This will help the company in having a bulky product line with which it can establish itself in new markets strongly and break the image of being a cold cream provider.

Market potential is growing – Another advantage is that the market potential for personal care products is always growing. Not only is the demographic market potential growing, the geographic market potential is growing also, therefore promising a good future for the brand.

Targeting Mens segment – There are fewer personal care brands in the mens segment and this segment is ripe for the picking with more and more men realising the importance of taking care of their skin and the role it plays in their overall well being and healthiness. Nivea has already introduced face wash and body wash in this segment and it has been received positively. The same can be expect with more product lines that it introduces.

Territory expansion – Besides launching new products, Nivea needs to expand to new geographies. If it does not do so, there are competitors like Ponds cold cream which will soon cover the market because of their excellent distribution potential.

Threats in the SWOT analysis of Nivea

Competition taking away its core strength – While Nivea plans to expand into uncharted territory, brands are attacking its core strength of being the go to cold cream. Namely two brands are the dominant competitors – Ponds cold cream and Johnson and johnson cold cream. Both are strong competitors for Nivea because they have deep pockets and fantastic distribution coverage.

Threat to bottom line – Because of its expenditure on marketing and because of competition in its core segment, Nivea which had the cold cream as a cash cow has a threat to its bottom line. Where there were a couple of cash cows, there are now majorly Stars in the portfolio of Nivea. This bottom line threat has to be nullified by Nivea by acting swiftly. Nivea deos are complete question marks in the BCG matrix because there are just so many Deo’s in the market including Axe which is the major market share holder.

Regular issues in Marketing – Nivea has faced several Racial issues in their marketing as well as huge fines imposed due to wrong marketing claims made. Such wrong marketing issues make a dent on the brand and will affect the brand if repeated.