Business Strategy

Porter's Five Forces

Bargaining Power of Customers: Customers' bargaining power examines how customers influence the price and quality of products. Customers' bargaining power is weakened when there are few competing firms available. Ultra/Standard has a medium to high force strength because customers may choose to go to a competitor who offers lower rates if their pricing increases.

Threat of Substitutions: The threat of substitution examines the availability of other products from outside an industry that a customer could purchase. When competitors or companies outside the industry offer more appealing and/or lower-cost products, the threat of substitution increases. Because there are a large number of rivals or outside companies selling comparable products, Ultra/Standard has a medium force strength; however, Ultra/Standard provides additional marketing services that their competitors do not.

Bargaining Power of Suppliers: Supplier bargaining power examines how much power and control suppliers have over raising prices, which reduces profits. When there are many suppliers in the market, suppliers' bargaining power is reduced. Because of the large number of market participants and the large supply of diverse products, Ultra/Standard has a low force strength.

Threat of New Entrants: The threat of new entrants examines the ease with which a company can enter an industry. When there is a high barrier to entry into an industry, the threat of new players entering the field is reduced. Customer loyalty, large capital, and cost per unit are examples of entry barriers. Ultra/Standard faces a low risk of new entrants due to the high cost of housing and delivering specialized beauty products, as well as the industry's large number of competitors.

Rivalry: The rivalry force examines the market's current level of competition, which is determined by the number of existing competitors and what each competitor is capable of doing. Competitors are more likely to engage in price wars or increase advertising when competition is high. Ultra/Standard has a high rivalry force strength because there are many competitors in the industry who can provide the same type of service and products to consumers and suppliers. As a result, Ultra/Standard Distribution is a profitable venture.

Force	Explanation	Force Strength
Bargaining power of customers	Customers have the option of switching to another supplier if prices are too high or quality has deteriorated in the beauty care market.	Medium to High
Threat of substitutions	Competitors have developed comparable products that meet market needs, but they do not provide the same level of service.	Medium
Bargaining power of suppliers	Customers have bargaining power because there are a large number of market players and a large supply of diverse products on the market.	Low
Threat of new entrants	Warehouse maintenance and shipment of specialized beauty products come at a high cost.	Low
Rivalry	There are numerous competitors of comparable size and power that provide the same type of service and product.	High

Competitive Strategy

Ultra/Standard Distributors responds to threats from the five forces by employing a competitive strategy that focuses on differentiating its products or services from the competition's. To focus on the multicultural market segment, Ultra/Standards employs a differentiation focus strategy, but their driving force is their unique value of building collaborative relationships. Their goal is to maximize sales while providing a best-in-class assortment to their customers at a high return on investment. With over 35,000 store doors nationwide, Ultra/Standard addresses the threat of customer bargaining power by expanding their distribution channels from small to midsize beauty supply shops and catering major retail chains. They have also expanded their business model to serve markets in Africa, Europe, and the Middle East. Finally, they stock and distribute a wide range of household name brands, from global icons to local favorites popular among their multicultural customers. The multi-cultural consumer is the industry's fastest growing demographic. Ultra/Standard addresses the high threat posed by competitors by providing comprehensive services ranging from distribution to marketing. Their distinct advantage is based on their special expertise in multicultural categories, which distinguishes them from competitors. Ultra/Standard has also expanded its market by acquiring Metro International in 2011 and Texture Media in 2015. They are dedicated to staying ahead of the industry and being innovators. With a medium threat of substitution, Ultra/Standard uses their expertise in the multicultural market to differentiate themselves from competitors, but they also share insights and recommendations to grow the multicultural beauty category with emerging brands, allowing them to enter the retail space more quickly. Supplier bargaining power and the threat of new entrants are low, but by focusing on developing and implementing best-in-class sales, marketing, visual merchandising, and logistical programs, these threats should be mitigated.

Business Processes

Ultra Standard Distributors provide comprehensive services, including marketing and distribution. They also provide supply chain management, category management, and digital initiatives targeted at retailers. Their main goal is to assist firms in expanding their distribution to cater to the expanding multicultural market. The full-service company Ultra-Standard Distributors provides marketing services, retailer-focused digital initiatives, category management, and supply chain solutions in addition to distribution.

Ultra/Standard Distributors uses an application system called AS400, Innovative System using a full robotics system to pick orders from the warehouse to prepare for shipping, EDI (B2B order management system),Repsly(Field Management Application) and ADP for payroll and Basecamp is used for collaboration, communications and to manage projects.