Porter’s Five Forces Analysis of Lush 

Lush is a retail chain cosmetic British multinational company and it has established a network of approximately 886 stores in various countries across the globe. The cosmetic brand started its business in 1995. Today, we’ll discuss Porter’s five forces analysis of Lush; bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.

Substitutes and competitors of Lush

• Sephora
• Sensalia Labs
• Neal’s Yard Remedies
• Melt
• The Department of Brands
• Pacific Beauty
• The Body Shop
• Beauty Counter

Porter’s five forces analysis of Lush would analyze the bargaining power of suppliers and buyers; the threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management. Here’s Lush Porter’s five forces analysis of the cosmetics business as follows;

Porter’s Five Forces Analysis of Lush

Let’s discuss Porter’s five forces analysis of Lush as competitive forces in strategic management and they’re as follows;

Bargaining Power of Suppliers in Lush

The bargaining of suppliers is Moderate in the cosmetics business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in Lush Porter’s 5 forces analysis of the cosmetics business are as follows;

I-Suppliers Networks

Lush has carefully developed a sustainable suppliers network in North America. The company closely collaborates with them in the farming, growing, harvesting, and manufacturing of raw ingredients and beauty products. However, the company makes sure that its suppliers are engaging in the right and ethical practices without impacting the quality of the product.

II-Limited Alternatives

Lush invests a significant amount of capital resources in the supplier’s development programs to ensure top-quality products and maintain ethical standards. The cosmetics brand would easily receive low-cost suppliers of raw materials, but it compromises quality, ethical practices, and environmental sustainability.

Bargaining Power of Buyers in Lush

The bargaining of Buyers is moderate in the cosmetics business as competitive forces in strategic management. Some of the main factors impacting the bargaining power of suppliers in the cosmetics business five forces analysis of Lush are as follows;

I-Multiple Alternatives

While shopping for cosmetics and beauty products, customers have multiple cosmetic brand alternatives. Customers could easily find premium and low-cost cosmetics and beauty products relevant to their budgets and requirements. The easy availability of multiple alternative options would increase the bargaining power of customers.

II-Expensive Options

Lush has established a unique brand position in the low-cost cosmetics product category. A vast majority of customers are highly cautious about the price of beauty products; low-cost brand positioning gives a unique competitive edge to the brand over competitors.

Threat of New Entrants in Lush

The threat of new entrants is lower in the cosmetics business as competitive forces in strategic management. Some of the main factors impacting the threat of new entrants in the Lush five forces analysis of the cosmetics business are as follows;

I-High Investment

Lush invests a significant amount of capital resources in the mass production of cosmetics and beauty products. The proactive marketing campaigns helped the company to earn a loyal database of customers and it further strengthened the company’s position. On the other hand, new bands and beauty products companies have limited budgets for mass-scale production and it negatively impacts their profitability

II-Copyrights & Regulations

Lush invests a significant amount of capital resources in the formula development of the new cosmetic products. Earning the patents and copyrights would secure the company’s beauty product formulation. Keeping up with government regulatory requirements and safety standards increases the operational cost; these factors decrease the threat of new entrance rates.

Threat of Substitutes to Lush

The threat of substitute products and brands is higher in the cosmetics business as competitive forces in strategic management. Some of the main factors impacting the threat of new substitutes in the Lush five forces analysis of the cosmetics business are as follows;

I-Environmental Sustainable Trends

The environmentally sustainable trends of using natural and organic products have been increasing and growing significantly among customers. People are shifting towards natural and organic cosmetics products and ingredients that are healthy for their skin and body.

However, Lush offers some organic cosmetics products to keep up with the growing market trends. However, the complete transformation to fully organic and natural products requires great work and a significant amount of capital resources.

Competitive Rivalry in Lush

The competitive rivalry among cosmetics businesses and companies is very high as competitive forces in strategic management. Some of the main factors impacting competitive rivalry in the Lush five forces analysis of the cosmetics business are as follows;

I-Tough Competition

Lush is facing tough competition from rival competitive brands like Sephora, The Body Shop, and Beauty Counter. They all have established a strong market share and a loyal database of customers. The company is experiencing tough competition both from the low-cost and premium cosmetics brands. Their presence is negatively impacting the sales and growth of the company’s cosmetics products.

II-Advertisement Campaigns

In order to keep up with the tough competition, Lush offers a great variety of cosmetics products and goods to customers. Along with its product portfolio, the company is highly proactive in running various types of marketing and promotional campaigns to attract the attention of customers.

Conclusion: Lush Porter’s Five Forces Analysis |5 Forces Analysis of Lush

After an in-depth study of Porter’s five forces analysis of Lush; we have realized that Lush is the world’s leading retail chain cosmetic brand. If you are learning about the Lush 5 forces analysis of the cosmetics business; then you should keep in mind the abovementioned bargaining power of suppliers and buyers; threat of new entrants and substitutes; and intense rivalry as competitive forces in strategic management.