Strategic Management Slids

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

Documents

Strategic Management Slids