Everyone likes to take care of their body and skin. Several brands in the market offer products to nourish our skin and body.
However, what’s that one brand that comes to mind when you think about skin and body care products? I am pretty sure you said Nivea.
Nivea is a leading brand manufacturer of several skin and body care products. Products made by Nivea are used worldwide because of their superior quality and marketing strategies.
In this article, we will conduct a Nivea SWOT Analysis to analyze what internal and external factors impact the operations of Nivea. So, besides getting aware of the brand, this article will also make you aware of what SWOT analysis is.
So let’s get in a time machine and go back to 1911’s Germany because that’s when the foundation of one of the largest skincare brands was laid. The history of this skin and body care brand tells us that Nivea was born when a pharmacist and a chemist shook hands to develop a perfect skin cream.
The cream was named Nivea because of its color. Nivea meant “Snow-White” in Latin, and the skin cream had the “Snow-White” color. The skin cream was officially launched in 1911 and took the market by storm.
Nivea was considered the best skin cream at that time. It was the only cream that could be exported to any part of the world without getting its consistency changed. In 1914 Nivea was being exported to all the continents.
Besides manufacturing in Germany, the manufacturing of Nivea also started in different cities worldwide, such as Paris, New York, Moscow, Sydney, etc. Nivea’s quality products and effective marketing helped the brand to increase its customer base.
In 1922 Nivea shifted its attention toward men’s products. It developed its first shaving soap, followed by a shaving cream for men.
In the 1960s, Nivea innovated and started manufacturing other skincare products. For example, the brand launched a line of sunblocks, moisturizing sun creams, and specialized products for babies and people with sensitive skin.
This further increased the customer base of Nivea, and the brand experienced a significant increase in sales. In the 1980s, the brand again catered to the needs of men and developed an alcohol-free after-shave balm.
In the next decade, Nivea developed an anti-wrinkle cream that became an attraction for its customers. It became one of the best-selling creams made by Nivea and contributed significantly to its profits.
Nivea has a vast product range, from body lotions to cosmetic creams. It serves the needs of all genders, skin tones, and age groups, from babies to adults. Due to this, the brand has a large customer base in every part of the world.
Nivea is currently sold in more than 200 countries. Due to such vast operations, the brand generated $6.8 billion in 2022. Now that we have discussed the history of Nivea and how the brand evolved over the years let’s proceed further and carry out Nivea’s SWOT analysis.
Before heading towards the SWOT analysis, you guys need to know that SWOT analysis is a business tool organizations use to identify the external and internal factors that impact businesses.
A SWOT template highlights the organization’s strengths, weaknesses, opportunities, and threats. Now that you know the purpose of conducting a SWOT analysis, let’s proceed further and look at the strengths of Nivea.
Every organization possesses some strengths so it manages to stay ahead of its competitors. An organization’s strengths provide it an edge over all the other companies in the market. In this section, we will have a look at some of the strengths of Nivea.
Brands seek to attain global recognition to increase their customer base. This is why companies tend to export their products to other countries.
Nivea is one of the world’s top most recognized brands. Besides completely conquering the German market, Nivea expanded its operations to every continent in 1914. Currently, the brand exports its products to more than 200 countries.
Having such a significant global presence provides financial strength to Nivea because as the geographical presence of Nivea increases, the sales of Nivea will also increase.
Besides providing quality products, brands must pay attention to their marketing strategies. Nivea is one of the brands with a strong marketing edge over its competitors.
In the 1950s and 60s, the brand started giving away Nivea beach balls along with Nivea’s sun product purchases. This filled the beaches with Nivea beach balls. As a result, people became more familiar with the brand, and its sales increased.
Other than that, Nivea used newspapers, TV, and radio for marketing purposes. Its persuasive marketing techniques led to an increase in the customer base of the brand over the years.
Just like having quality products is essential for businesses, having skilled labor is also very important to succeed in the market. Nivea is one company that provides training programs to its employees and interns.
As a result of these training programs, Nivea can induct skillful employees, which adds value to the company and gives it an edge in the market.
Every brand has some strengths and some weaknesses. In contrast to the strengths, weaknesses of a brand make its position weak in the market. This section of the SWOT analysis will analyze some of the weaknesses of Nivea.
Businesses tend to expand their portfolios over time. The primary purpose of increasing the product range is to attract more customers. Nivea has been in the market for more than a century. However, it has a limited range of products.
Nivea has kept its focus on skin and body care products over the years. Unfortunately, this has limited Nivea’s customer base and the company’s growth aspect.
Brands want to avoid controversies so that their sales are not affected. However, some brands get surrounded by controversies due to some policies or actions. Nivea has also been subject to controversy.
In 2017, the brand was accused of racism because of its TV ad aired in West Africa. In addition, the brand faced criticism on social media because of its ad for a fairness cream. The cream’s tagline was “visibly fairer skin,” which ignited the debate of racism.
Due to this controversy, the brand faced severe criticism, damaging Nivea’s reputation in the market.
Limited Marketing of Other Products
Nivea has a number of products. However, if you ask someone to name two products of Nivea, they will probably name the skin cream and body lotion because these are the most marketed products.
People are only aware of the limited products of Nivea. For example, Nivea also has a wide variety of shampoos. Still, they are not marketed well, so limited people know about them. Nivea’s policy of not marketing all products equally has limited its growth and market share.
The market provides growth opportunities to every brand. However, brands must identify opportunities to make the most out of such opportunities. In this section, we will have a look at some of the opportunities that are present for Nivea.
Diversifying The Portfolio
The prime objective of any business is to increase its customer base and profit. To attain these objectives, businesses focus on diversifying their portfolio. Nivea has been in the market for more than a century, due to which it is well recognized.
Nivea has the opportunity to diversify its product range. For example, it can now introduce a men’s razor range similar to Gillette. Other than that, Nivea can also introduce a line of menstrual pads for women. This will increase the customer base of Nivea, and the brand will benefit from higher profits.
Start Manufacturing In Developing Economies
Businesses always seek ways to lower their operational costs to maximize their profits. Nivea has an opportunity to lower its operational costs by establishing its manufacturing plants in developing economies.
Nivea can start manufacturing in developing economies of Africa and Asia. The lower wages in the developing economies will lower the manufacturing costs of Nivea. As a result, the brand will be able to secure more profits.
Increasing Living Standard
Over the years, the living standard all over the world has increased significantly due to a number of reasons. The increased living standard provides a growth opportunity for Nivea. As living standards have increased, the buying power of people has increased significantly.
This provides the opportunity for Nivea to increase its sales. In addition, Nivea can benefit from the increasing living standard since people now have more money to buy its products.
Every organization faces several threats from its environment. However, the objective of every organization is to counter these threats so they don’t impact their operations. In the last section of this SWOT analysis, we will analyze the threats Nivea faces.
Businesses avoid markets with high competition because competition lowers profits since many companies sell similar products. For example, Nivea was one of the few brands back in 1911 that was selling skincare products. However, currently, there are several brands that are selling substitutes for Nivea’s products.
For example, Dove has a similar product range to Nivea. However, Dove also focuses on skin and body care products. This causes a division in Nivea’s customer base, resulting in lower profits.
As the number of skincare and body care brands is increasing, Nivea is worried because this might lead to a decline in the sales of Nivea’s products.
After the global pandemic that caused economic activity to fall significantly, the Russian invasion of Ukraine has increased the chances of a global recession. The world bank has recently predicted that the world will probably enter a recession in 2023.
This poses a threat to Nivea because a global recession would cause the demand for Nivea to fall significantly. As a result, the revenue of Nivea would fall, and the brand could face severe financial problems.
Imitation of Products
Brands often have to deal with imitated products. For example, several manufacturers produce counterfeit products from famous brands such as Nivea. Nivea has to deal with such counterfeit products because they can damage the image of Nivea by producing low-quality products in the market.
Nivea feels threatened by manufacturers who produce counterfeit products because they can damage Nivea’s image and cause its customer base to fall.
Nivea is one of the most renowned skincare and body care product manufacturers. It started its operations by manufacturing skincare cream in 1911. Nivea’s skincare cream was one of a kind. This was the first time anyone had used such a good quality cream.
As a result, Nivea’s sales began to increase. In 1914, the brand started selling its cream on all continents. Later the brand diversified its operations and manufactured specific products for men. Men loved the saving soap and shaving foam, and Nivea managed to increase its customer base further.
Later, the brand evolved and increased its product range. Finally, with the help of innovation and fantastic marketing strategies, Nivea became one of the world’s top skin and body care product manufacturers.
Looking at the success of Nivea, we decided to conduct its SWOT analysis. In this article, we successfully highlighted the strengths, weaknesses, threats and opportunities present for Nivea.
After reading this article, we are sure that now you know how to conduct a SWOT analysis. The factors mentioned in this article can also be represented in the form of a SWOT Matrix. If you want to learn more about the SWOT analysis technique, look at some examples of SWOT analysis.