Blackmores Business Analysis

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Business Analysis on,
Blackmores Ltd

Table of content

Introduction2
Strategic business units3
Internal Environment4
External environment6
SWOT analysis6
References7

Introduction

Blackmores Limited is an industry leader in both natural health and research, basing its principle activity on the development and marketing of health products and natural supplements; and it has been an industry leader in Australia for more than 70 years. The Company had its beginnings in the 1930s. The company currently has over 150 products, catering for all areas in natural health and vitamins. Products are distributed primarily through retail pharmacies, supermarkets and health food shops and operations now stem offshore to New Zealand and throughout Asia. In 2011, both size and profit of the company are increasing continually.

Strategic business units

In the Vitamins and dietary supplements (VDS) market has increased by 64% of the current value growth since 2006 (2012, Sydney University). In 2011, the industry grew about 7% bringing it to an estimate value of the industry of$ 1.4 billion (2012, The University of Sydney) due to the Australia’s ageing population (2012, Australian Institute of Health and Welfare), growing obesity; about 5% of Austrian population (2012, Australian Institute of Health and Welfare), and a trend of increasing health and wellbeing awareness. Thus, this will make this market into the high market growth.

Blackmores is the brand leader in the highly concentrated Australian VDS market. It is set apart by its operation and quality; furthermore, it is also wildly known as a high standard and reliable brand for its products. Blackmores has plenty of product line which all of them are growing, especially in Vitamin D product which has a high growth rate of 5.9% in 2011 (2012, The University of Sydney). The company is well positioned for growth in this market with high relative market share about 18.8% compared to Nature’s Way about 13.6%; and relative little competition such as Herron and Centrum (2012, The University of Sydney).

Figure 1: BCG matrix for Blackmores’ Vitamin D

Internal Environment

Blackmores’ Vitamin D has the added benefit of helping to improve muscle strength in the elderly.  Improving muscle strength can help to reduce the incidence of falls, which can reduce the risk of fractures (2012, Blackmores Ltd). Furthermore, it has much kind of packages and plenty of sizes with the good desirable style and quality.

In order to consolidate market position in Australia, Blackmores has continually offered diversify product offerings and increased levels of the new product development, with the introduction of over 100 new products in 2012 (2012, Blackmores Ltd) . Blackmores got a larger margin in order to increase profits by selling product at lower prices compared to other competitors in the VDS market. On the other hand, cutting price may bring negative brand image to the company; however, Blackmores is one of the most visible and trusted vitamin and supplement brand in Australia, winning Reader’s Digest Most Trusted Brand Survey for 4 consexcutive years (2012, Reader’s Digest). Furthermore, Blackmores was the number one trust VDS brand in Thailand in 2012 (2012, Reader’s Digest).

Blackmores has multiple distribution channels because VDS products are normally sold through a number of channels, including grocery stores, health food stores, pharmacies and direct-to-consumers. Supermarkets have been their share of retail distribution grow as consumers appreciate the convenience of one stop shopping and the lower unit process, with the estimate value of 31% (2012, The University of Sydney). In addition,...
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