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8/7/2019 Strategic Management Slids
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STRATEGIC MANAGEMENT
BUSINESS POLICY
Case study
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INTRODUCTION
Manufacturers and marketers
Skin care, makeup, fragrance and hair care products
Estee lauder companies came in front in 1946
By Estee lauder and her husband Joseph lauder.
Estee lauder companies has 26 brands
Selling products in over 130 countries and
territories
Employs over 22000 people worldwide.
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VISION STATEMENT
In a short, concise statement, Estee Lauder
Companies Inc. stated their vision, i.e.
Bringing the best to everyone we touch.
MISSION STATEMENT
We (Estee Lauder) are a family company committed toworking together with uncompromising ethics and
integrity.
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OBJECTIVES
Innovative cosmetic products of the highest qualities.
Deliver outstanding service.
Fosters personal growth and well being.
Build partnerships with our suppliers, retailers and colleaguesbased on fairness and trust.
Enhance our reputation of image, style and prestige.
Pursue profit
Eliminate waste and reduce inefficiencies
Be responsible citizen in every community we serve.
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PRODUCT LINE
1. Skin care.
2. Makeup.
3. Fragrances. 4. Hair care products.
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BRANDS
ARAMIS
CLINIQUE
Prescriptives
Lab Series
ORIGINS
La MerAveda
Bumble
Darphin
American BeautyFlirt
Good Skin
Grassroots
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Estee Lauders Skincare Product Line
Estee Lauders range of skincare products for women
and men including:
Moisturizers
Creams
Lotions
Cleansers
Sunscreens
Self-tanning products
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Estee Lauders Makeup Product Line
The Companys makeup product line includes:
Lipsticks
Lip glosses Mascaras
Foundations
Eye shadows
Nail polishes Powders
compacts, brushes and other makeup tools.
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Estee Lauders Hair Care Product Line
The company sells hair care products in salons andfreestanding retail stores.
Hair color and styling products
Shampoos Conditioners
Finishing sprays
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ESTEE LAUDERS Competitors
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SWOT ANALYSIS
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STRENGTHS
Largest manufacturers and marketers of cosmetic products.
About 26 brands, employs over 22,000 people word wide.
First company in the industry to introduce consistent brand imagery.
Offer online shopping. Offer free samples and gifts with purchase.
Strong commitment to uncompromised ethics and integrity.
Its own 15 manufacturing factories in different countries.
Its manufacturing operations conform to the ISO 14001 standards.
About 400 scientists for research & development activities
43 business offices worldwide.
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STRENGTHS
Markets about 9000 of quality products.
Global licenses for fragrances and cosmetics.
Each of the company brands has a single global image
It engages celebrities to advertize its products.
Estee lauders final 2007 sales increased seven percent to $7.037 billion. Hair care net sales increased 16 % due to sales growth from bumble and d
bumble and aveda products.
Companys sale of skin care products increased 2 % due to new productlaunches.
Makeup net sales increased 6 %, reflecting growth from the makeup artist
brands. Talking about geographical regions
Sales in US department stores in 2006, representing 18% of the totalbeauty market in united states
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WEAKNESSES
Fewer sales of fragrances & hair care products
Traditional functional structure.
Focus strategy for targeting customers.
Per unit cost of production is high
High cost of sales.
Difficulties in distribution in few geographic regionlike Australia
Because of slower and difficult retail environment andcultural differences.
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WEAKNESSES
Distributing in about 130 countries whereas, theirbusiness offices are situated in only 43 countries.
No long term strategies about promotionalcampaigns.
Sales growth less as compared to its competitors.
Account receivables are increasing due to whichaccount payables are also increasing.
High pricing
Geographically not targeting Asian countries
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OPPORTUNITIES
Increase in population.
Huge potential in emerging markets.
Rising popularity of online shopping
Strategic alliances. Substantial scope for anti-aging products in the
coming year.
Desire for low cost products by the consumer.
Focus on disposable income of people.
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THREATS
Highly competitive market
Changes in laws and distribution
Economy slow down
Government control over business Huge Taxes
Sensitivity of the business
Restrictions on animal Testing
Competitive pricing at megastores Concerns about the use of aerosols and fluorocarbons
that cause environmental damage.
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MAJOR THREATS
The most major threat that estee lauder company is
facing now a days are:
Highly competitive market
Competitive prices at mega stores
Customer loyalty to other brands
Rising restrictions on animal testing and use of
aerosols and fluorocarbons
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MINOR THREATS
Government control over business
Changes in laws and distribution policy
High cost of production
Difficulties in distribution channels /Changes in
distribution policy and retail environment
CORE PROBLEMS
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RECOMMENDATIONS
Alliance with the companies that have the low cost of
production
Open some new manufacturing units in the regions where the
sales are low Improve their distribution policies
Do extensive and effective advertisement
Increasing attention to environment and animal testing
Emphasize on natural/herbal ingredients
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CONCLUSION
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