SWOT analysis of Olay

Olay is American skin care brand. Olay originated in the year 1949 in South Africa. It is extracted from the Oil of Olay. The name was chosen by Wu

If as a name derived from the lanolin which is one of the key ingredients in the products.

Strengths in the SWOT analysis of Olay :

This helps in understanding the core areas of the business where it beats the competition and has the competitive advantage in the market. Strengths are generally the core competency of the business.

1. Strong Brand Name – Over the years Olay has been able to establish a strong brand name in the market. It has a high brand recall and customers are able to associate the brand with the advertisement as well. The Strong brand name is garnered on the basis of the brand portfolio. This helps in achieving economies of scale which further helps the brand to bargain with the retailers
2. Strong Parent Company Brand – Olay is now owned by P&G which is highly established in the market. Thus with strong parent brand in the market Olay has been able to be available to the wide customer base.
3. Product Quality – The product quality is very good as the effect of using the products are evidently visible. The products help in reducing the aging effect on the skin and preventing dark spots from happening.
4. Distribution Network – As Olay is owned by P&G hence it has a strong logistics network developed and the reach of products is high in the network.

Weakness in the SWOT analysis of Olay :

This is the pain area of the organization where it does not have the resources or skills. Business has to work upon these areas so that they are not left behind from the competition. Though there will be some or the other weakness it should not be an area which takes the business out of the market

1. High Price – The prices of the products are very high and hence it clearly hits the premium segment in the market. By putting a high price on the products the Olay focusses on a very narrow segment of customers which makes it lose a customer in the market for other products available in the market.
2. Market Investment – There is a significant investment which is done on the brand and hence the ROI is not very high for the products.
3. Product recall – There have been significant scenarios where Olay has recalled products from the market which is tarnishing the brand name and positioning in the market.
4. Dependence on the Retail Stores – Major point of sale for Olay is the retailers and hence the sale is at the disposition of the retailers and the way product is planned in the layout of the retail store.

Opportunities in the SWOT analysis of Olay :

This helps in understanding what other things a business can do with the current skills and resources. It helps the business to know the areas where it can expand and take a lead in order to diversify the business and expand the customer base

1. Increased Focus – Not only Olay but P&G at the same time is investing efforts in the skin care industry to expand the market as there is an immense growth witnessed in the skin care industry.
2. Increasing Disposition Income – The incomes in the emerging markets are increasing and hence people can buy things and invest in better products for themselves. This is helping the brand to have more customers. The economy is growing at the same time which helps in increasing the overall market size.

 

Threats in the SWOT analysis of Olay :

This analysis helps in understanding what are the areas which can impact the business in future or right away. So business has to prepare itself to handle the threats in the market landscape. Competition or increasing number of players in the market with same value proposition is a threat to business as it directly lowers the customer base and revenue

1. Increase in cost of Raw Materials – The raw materials used in the Olay products are getting more and more costly which leads to increase in the final price of the products and hence the presence of substitute products available in the market leads to a deflection in the customers to other brands.
2. Competition – Competition poses a serious threat the brand as there are multiple brands in the market for skin care and customers are reluctant to switch brands in this category. Thus it becomes very difficult to increase the customer base. It is easier to attract the non-user than to make customer switch the brands.