Competitive advantage of LUX (Unilever)

Maintaining competitive advantage is the key to sustaining in the business world. Competitive advantage occurs when an organization acquires or develops an attribute or combination of attributes that allows it to outperform it’s competitors. From that point of view, LUX, a renowned brand of Unilever has acquired some attributes that it’s competitors find really difficult to replicate. And these competitive advantages are the keys to outperform their competitors which we will now be discussing about:

1.       Economies of scale: Unilever has established the brand LUX long ago and since 1924 it has been doing business and earned a huge amount of revenue. Today LUX is the market leader with humongous market share than all other soap brands. Since it has been in the market for almost a century, it has acquired biggest share in the marketplace serving their consumers with their quality product and as a result this brand has gained ‘economies of scale’ which signifies that this brand has achieved a cost advantage in which fixed costs are spread out over bigger volume of outputs and their cost per unit is very low. As a result of which they are able to lower their price in comparison with their competitors. If LUX lower it’s price drastically below the production cost of their competitors, LUX will still be able to make profit whereas it’s competitors will incur continuous losses if selling at the same price as LUX. So here LUX always have a unique advantage that is strong enough to outperform it’s competitors.

2.      Distribution channel: Distribution channel of the brand LUX is very wide. Even in the remote area of Bangladesh and many other countries, this brand can easily be found. LUX has succeeded to build strong distribution channel compared to it’s competitors. As a result of which LUX can earn more revenue than it’s competitors do.

3.      Innovation and Design: LUX has always been innovative compared to it’s competitors which facilitates the brand to hold it’s superior position among all other soap brands. Recently LUX has come up with an innovative idea in which the soap demonstrates a unique design of a flower on it’s surface and claiming to have best perfume than ever and it has successfully made a splash in the minds of consumers. Apart from that, the brand adds new variants that boost the demand of the product among consumers and help in holding a superior position among other brands.

4.      Resources and Expertise: Since LUX is there in the market for a long period of time, it has gotten a hold of best resources available and the level of expertise is very high. This aids the brand in producing quality products and stay unique from it’s competitors. On top of that, they made beautiful actors their brand ambassadors to endorse their product and thus they have succeeded to have even bigger market share.

5.      Customers’ loyalty and Brand Value: LUX consumers seem to be very loyal to the brand which can be viewed as a major strength of the brand. Since the customers seem to be satisfied with the product they are using, they are less likely to switch the brand. Apart from that, it’s consumers have a strong mindset that they are using the best soap product as LUX succeeded to build a strong BRAND EQUITY.

References:

1. Unilever.com, (2014). Lux | Brands in action | Unilever Global. [online] Available at: http://www.unilever.com/brands-in-action/detail/Lux/292092/ [Accessed 6 Nov. 2014].

2. Ukessays.com, (2014). Situational and environmental analysis of Lux Soap. [online] Available at: http://www.ukessays.com/essays/marketing/situational-and-environmental-analysis-of-lux-soap-marketing-essay.php#ixzz3I79GjVeY [Accessed 6 Nov. 2014].

3. sustainablebrands.com, (2014). Unilever's Lux Soap Will Now Be Made with Algal Oils | Sustainable Brands. [online] Available at: http://www.sustainablebrands.com/news_and_views/chemistry_materials/jennifer_elks/unilevers_lux_soap_will_now_be_made_algal_oils [Accessed 6 Nov. 2014].

4. Solazyme, (2014). Unilever Formulates First Soap Bar Using Sustainable Algal Oils - Solazyme. [online] Available at: http://solazyme.com/blog/2014/05/06/unilever-formulates-first-soap-bar-using-sustainable-algal-oils/ [Accessed 6 Nov. 2014].

5. Slideshare.net, (2014). Lux report. [online] Available at: http://www.slideshare.net/HarshPatel14/lux-report [Accessed 6 Nov. 2014].

6. Scribd.com, (2014). Lux Report. [online] Available at: http://www.scribd.com/doc/24619794/Lux-Report [Accessed 6 Nov. 2014].

7. Mbaskool.com, (2014). An Analysis On Lux Beauty Soap | Business Article | MBA Skool-Study.Learn.Share.. [online] Available at: http://www.mbaskool.com/business-articles/marketing/1506-an-analysis-on-lux-beauty-soap.html [Accessed 6 Nov. 2014].