Consumer goods and services industry “includes industries and companies focused on manufacturing, distributing and marketing finished products that will be used by the general public” ("DMOZ - Business: Consumer Goods and Services", 2015). Consumer products include small appliances, food, beverages, toiletries, cosmetics and the like. This sector is not only a large contributor to the economy and the gross domestic product of a country; it also channels money into the retail and advertising sector. The consumer goods and service industry in Qatar includes Zad Holding Company, Qatar German for Medical Devices, Salam International, Medicare Group, Qatar Cinema and Food Distribution, Qatar Fuel, Widam Food Company and Al Meera Consumer Goods Company.
Zad Holding and Salam International majorly deal in investing and financial activities and Qatar German deals in production of medical syringes. Medicare Group deals in general and specialized medical services and establishment of hospitals. Qatar Cinema deals with film distribution, theatrical releases and establishment of cinemas and theatres whereas Qatar Fuel trades and distributes fuel and other petroleum products. Widam is a trader of livestock, meat and other animal products and Al Meera is a wholesaler and retailer of several consumer products and commodities through establishment of hypermarkets, supermarkets and bookstores in Qatar.
The consumer goods and services industry is subject to several fluctuations in consumer lifestyle and taste, the spending capacity of individuals and the cost of living index. Qatar falls under the highest income bracket however the country’s cost of living index is ever increasing. Moreover, “Close to 85% of the population are expats and this has influenced the products on offer in many retail establishments” (Euromonitor International, 2015). Most importantly, if the demand for consumer goods has seemed to increase, there is also a surge of new competitors taking over the market. “With today’s changing consumer, advanced technologies, shifting world economy and depletion of natural resources, the industry is facing more challenges than ever before” (Wood & Wang, 2013). Thus, it would be safe to say that the performance of the consumer goods industry keeps fluctuating according to various market and economic conditions.
Each industry is subject to several internal as well as external forces which influence its performance. A SWOT analysis reveals that the consumer goods sector has several strengths and weaknesses which affect it. Two of the strengths of the industry are that its operational costs are quite low in comparison to the other industries and information regarding consumers’ needs and taste are readily available. The industry also has advantages of employing well-known brands for marketing its products and having established markets in all regions of the country. It however, suffers from several weaknesses such as the increase in counterfeit products resulting into lower confidence in customers, significant advertisement and distribution costs. The industry also has several opportunities such as increase in income and spending capacities of consumers, changing lifestyle, and increase in potential rural and overseas market. Despite this, several threats the industry faces are increasing competition, standardization of products, political and economic fluctuations, and attitude of consumers.
Porter’s Five Forces analysis also reveals how the industry is affected by the immense power of suppliers especially for companies such as Medicare, Al Meera and Widam. Suppliers can easily control supply or influence market prices in consumer goods’ companies. The power of buyers is also a strong influential force in such a type of industry. The strength of buyer’s power was so evident during recession that several retailers had to shut down their businesses because buyers became inclined to search for hefty bargains in consumer products (Shriram, 2015). Similarly, competitive rivalry and threat of new entrants are also strong external forces. Since the industry has low operational costs and high profit margins, new players keep entering the industry resulting into an increase in competition. Lastly, threat of substitution is also quite high since customers have a lot of products to choose from based on their price, quality and brand.
Works Cited
DMOZ - Business: Consumer Goods and Services. (2015). Dmoz.org. Retrieved 1 May 2016, from https://www.dmoz.org/desc/Business/Consumer_Goods_and_Services
Euromonitor International,. (2015). Consumer Lifestyle. Retrieved from
http://www.euromonitor.com/consumer-lifestyles-in-qatar/report
Shriram, K. (2015). 2015 Consumer Goods Trends. Strategyand.pwc.com. Retrieved 1 May 2016, from http://www.strategyand.pwc.com/perspectives/2015-consumer-goods-trends
Wood, S. & Wang, C. (2013). The Future of Standards in the Consumer Goods & Retail Industry (p. 23). Capgemini Consulting. Retrieved from http://www.gs1.org/docs/retail/the_future_of_standards_in_the_consumer_goods_retail_industry.pdf
