Estee Lauder, based in New York City, is a manufacturer of cosmetic products that include skincare, makeup, fragrances, and hair products. STRENGTHSIndustry Recognition: According to NPD Clinique, Estée Lauder, and MAC are the best-selling skin-care and up-scale cosmetic. Estée Lauders Company Profile – SWOT Analysis: Estée Lauder Cos has seen above industry level growth, helped by the solid performance of its newer.
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The company manufactures and distributes cosmetic products in the skin care, make up, fragrances and hair products. Estee Lauder has about seot brands with presence in over countries. Estee Lauder has acquired some other businesses such as Smashbox Beauty Cosmetics and created partnerships with Aramis and designer fragrances and Tory Burch fragrances.
This mission statement is broad and does not get to the detail of what the business is about. A mission statement is not a broad as the vision and shows the purpose of the company and its goals Coulter, In a business environment, a mission statement should include some key elements such as the focus on the customers, products, and commitment to what they offer. A mission statement states purposes anaysis goals and provides focus for employees to make and implement strategic decisions.
Along with these elements a mission statement should decide if the company will be customer-oriented or product-oriented. There are very few organizations that have managed to include all of these elements within their mission statement.
Estée Lauder: SWOT Analysis | bitohoneyy
Communicating all of these elements is important to ensure that the company can inform stakeholders about its plans and goals. Employees must also understand and be unified in pursing these goals. Estee Lauder has no vision statement. The above mission statement sounds more of a slogan for the company. To be the global leader in delivering the promise to keep our every customer forever young. This proposed vision statement has a view of the future and also encompasses the global view such that Estee Lauder hopes to reach more people that it already does.
The vision statement must have a future aspect and delivering the promise to the customer is a future aspect. Estee Lauder herself used laudef say that every woman can be beautiful and that she has the aim to make every person feel forever young.
This vision statement gives the direction to the company to work towards, even when Estee Lauder founder is no longer with the company.
B ringing the best to everyone we touch by offering analtsis best quality products to sot customers and commitment to create the eestee environment for all our stakeholders. The proposed mission statement is an addition to the existing one, without losing the touch of bringing the best to everyone; it gets into specifics of what the company is about. This means that Estee Lauder is making a commitment by creating conducive working environment. The same happens for the company to create products that are safe to use by everyone and meeting environmental standards such swpt not using aerosols in their fragrances among other environmental concerns.
This analysis comprises the study of the macro anwlysis and the industrial environment that Estee Lauder operates in.
The PESTEL analysis looks at swor macro environmental factors that affect the business; a business uses this to understand their position, direction and the potential they have in that environment. Since Estee Lauder operates internationally, they must consider the government requirements in each country and the level of government involvement in the business. There is need to license some of the global brands such as MAC, Bobbi brown among others since they are global brands and conforming to global standards such as ISO.
The business is also affected by the political stability of these countries, where sometimes there are restrictions on the products that can be carried in flight. How liberal they are in using and accommodating beauty regimes from other countries, for example, there is requirement by the food and drug administration of each country to adhere to the rules and warnings.
Co-operation and integration of countries and their relationships ,auder the business, for Example, Brexit is a consideration that Estee Lauder considers how it is going to affect the business. Investors in the beauty industry are expected to hold back until the stability of doing business in the EU is determined Micallef, The fluctuations of analysiz currency affect the sales that are made across countries. The prices of Estee Lauder products vary from mid-high to high range hence the need for the customers to have disposable income to afford the products.
With the growing economy in countries, more and more people are able sowt afford these products. This in mind however, the Estee Lauder products are designed for the middle-high end clientele who have no problem affording the products.
There is the increase use of beauty products and a makeup evolution by the young and older generations making cosmetic industry such a vibrant one.
Further, the younger generations years are using preventive make up such as a lot of sunscreen; while the older generations are using anti aging products which creates a market for cosmetic products. For products like fragrances, customers take pride in how unique they are, they tend to buy high end products since they have a rare scent.
Swot Analysis of Estee Lauder Essay
This is an advantage to Estee Lauder Company since they sell high end fragrances. There is higher income levels across generations provide them with capacity to buy the amalysis. The internet and ecommerce business models have enabled businesses to trade across borders. Estee Lauder adopted the use of internet to sell its products in The internet has enabled communication with customers such that the business is able to swpt customer needs and provide to gain customer satisfaction and loyalty.
Emission of harmful gases has been an environmental concern and the company is expected to take strict measures to control this.
The company should also take safety tests on their products to adhere to the food and drug administration requirements in each country whose main aim is to ensure that the products are safe analysks use by the customers. There has been ahalysis debate swkt years about the use of aerosols in fragrances that Estee Lauder has been making a commitment to deal with the issue.
There is also a campaign to stop the company to use animals for product testing which is another of the environmental concerns Estee Lauder has to deal with. In every country globally that Estee Lauder Company sells its products to, it must get licensing for the products.
The company has faced legal suits over anti aging products where they have been accused of false advertising. Laudeg, inEstee Lauder Company, Mary Kay and Avon Products were sued for defrauding customers claiming they did not use animal testing for their products while they actually used animals.
The Porters five forces analyze the industrial position of the industry. According to Porter,an industry is whereby a number of organizations offering similar products are competing for the same markets. An industry has high competitive rivalry has a large number of competitors, slow growth, high fixed costs and low product differentiation Porter, The cosmetic industry is very competitive.
Though the industry is fast growing and high analysid differentiation, the industry is still competitive due to the large number of competitors involved, and the demand for cosmetic products involved. This factor analyzes on how easy it is for a new organization to enter the market.
If new entrants can easily enter the industry, the competitiveness of the business will be reduced. Barriers to entry lower the threat of entry and makes the industry more attractive Barney, Threat of new entrants may be reduced by barriers of entry such ,auder economies of scale, product differentiation, cost advantages and strict government policies.
There are high economies of scale required to produce cosmetics in large quantities, hence high capital involved. Product laudwr in this laudeer is high, Estee Lauder products such as MAC are highly differentiated and it would take years for a new entrant to get to its level. This is a highly competitive industry and therefore tough for new entrants to get in. Substitutes are products or services that fill the same need but in a different way.
Substitutes could come from within or outside the industry. Threat of substitutes arises when analysjs customers can use other products that can take place of the product in question that will satisfy their needs.
This also occurs when the competition is making products that can be used in place of the product. There analyysis other substitutes to cosmetics in the market.
Some external factors that can make the substitutes competitive are low switching costs, high availability of substitutes as well as low cost of substitutes. In cosmetics, there are low switching costs since most use lauver products is only due to a matter or preference, hence customers can ana,ysis switch from one product to another as long as it is within their price range.
Currently, people are opting for more natural products and are likely to opt for home remedies for anti ageing or preventive products such as coconut oil.
There are also campaigns to go make up free analyss is influencing people to embrace their natural looks. The bargaining power of buyers is high if the buyers are powerful enough to demand lower prices and high quality of products and services Barney, The factors that can facilitate the strength of customers are such as if customers can by in large quantities.
On the other hand, with low switching costs, customers can easily get products and services from competition hence increasing the bargaining power of customers.
There are low switching costs in the cosmetics industry as they do not differ much in quality especially the high end products and many use them because of preference. The customers also buy in small quantities and actually prefer the products due to the differentiation and the high pricing as it makes them unique, hence do not have much influence on the pricing of the products.
Their power is supported by: The bargaining power of suppliers for Estee Lauder is low, since the company requires high bulk of supplies hence many suppliers would be proud to work with the company. There are also a variety of suppliers who can supply to Estee Lauder and the switching costs between suppliers are low.
It is very unlikely that the supplier can integrate and start laudr the products Estee Lauder offers especially since each of the product is made with a combination of different raw materials. This industrial analysis shows that the competitiveness of the industry aalysis favorable to Estee Lauder. They only face competition and swo of substitute as high abalysis.
To remain competitive, the company has to be innovative to remain preferable to the consumer by beating competition and ensuring that customers do not rush to the ewot. The SWOT Analysis identifies the internal strategic factors strengths and weaknesses and external strategic factors opportunities and threats that influence the business. The makeup division is the star, skin care products the question, the fragrance is the cash cow and the hair care is the dog.
The fragrance division has been the highest income generator, has the largest market share but slow growth. There has been recent concern on the dropping sales in the fragrance section. The skin care products such as the anti swto creams have faced questions as to whether they work and hence its future is in question, though they are growing fast but has very little market share.
The makeup division looks very promising in growth, and has a large market share already, and could be the future cash cow. The lowest performing product is the hair care, with slow growth and analyais market share. The proposed strategies for dog are usually divestiture and liquidation since they are not bringing much to the organization.
The cash cow can have product development ton increase market share and some growth since it is the stable product in the portfolio. The star, setee cash injection could be the future cash cow as it has potential for integration and reaching more lauedr.
The question on the other hand, has to be observed carefully if it has a potential. Instead of cash injections without being sure, it is spread to more markets and the response is observed.
The grand strategy analyses the market growth and the competitive position of an organization. The Estee Lauder Company is in the first ested whereby it has a strong competitive position and there is rapid growth rate in the etsee. This is an excellent strategic position. For a company in this position, they should concentrate on the current market, and develop strategies to remain sustainable and competitive in this market.
Currently, Estee Lauder uses differentiation as the generic strategy.