Sm Case Jisha & Remya(2)


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  • Hi,

    Can someone send me the following matrix? really appreciate if you can help me :)

    3-Financial Ratio Analysis financial ratios(2).xls
    5-SPACE MATRIX SPACE Matrix.doc

    Thanks & Regards,
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  • hi jimsha & Remya EFE, CPM, IFE and QSPM matrices of Estee Louder?I really appreciate if you can send it for this email address:
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  • Really sorry, may be u can send the attachment directly to

    Thank you :)
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  • It's really interesting me...could you please to send me these file?
    1. Externall factor evaluation matrix EF.xls
    2. Competitive profile matrix EL_CPM.xls
    3. Financial Ratio Analysis.xls
    4. Internal factor evaluation matrix IFE+matrix.xls
    5. Space matrix space.doc

    Thank you very much in advance :)

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  • good evening Jisha& Remya, can you please send me the EFE, CPM, IFE and QSPM matrices of Estee Louder?I really appreciate if you can send it for this email address:
    Are you sure you want to  Yes  No
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  • Sm Case Jisha & Remya(2)

    1. 1. Strategic Management Case Analysis By, Jisha & Remya
    2. 2. CURRENT POSITION <ul><li>26 brands; over 130 countries; 9,000 products; 22,000 employees. </li></ul>
    3. 3. Growth in Sales in different segment 0.75% 42.16% Other 16% 18.32% Hair Care - 4% 7.85% Fragrance 6% 8.38% Make up 2% 8.33% Skin care 2006 2007
    4. 4. Geographic Revenue analysis in different regions: 3% 3.32% Americas 2% 16.1% Europe/Middle East/ Africa 6% 13.05% Asia/Pacific 2006 2007
    5. 5. Performance <ul><li>SALES: </li></ul><ul><ul><li>9.38% (2005)  2.93% (2006)  8.89% (2007) </li></ul></ul><ul><li>COST OF SALES as a percentage of total sales: </li></ul><ul><ul><li>25.5% (2005)  26.1% (2006)  25.2% (2007) </li></ul></ul>
    6. 6. Vision Statement <ul><li>“ Bringing the best to everyone we touch” </li></ul><ul><li>Comments:- </li></ul><ul><li>Short, Readability & Inspiring </li></ul><ul><li>Needs to be more specific </li></ul><ul><li>Does not answer the basic question what they want to become </li></ul><ul><li>Does not provide a foundation for developing a clear mission statement. </li></ul>
    7. 7. Mission Statement <ul><li>We are a family company committed to working together with uncompromising ethics and integrity. We strive always: </li></ul><ul><li>Provide customers with innovative cosmetic products of the highest quality. </li></ul><ul><li>Deliver outstanding service by treating each individual as we ourselves would like to be treated. </li></ul><ul><li>Create an environment that fosters personal growth and well being. </li></ul><ul><li>Build partnerships with our suppliers, retailers and colleagues based on fairness and trust. </li></ul><ul><li>Enhance our reputation of image, style and prestige. </li></ul><ul><li>Pursue profit, but never at the expense of quality, service or reputation. </li></ul><ul><li>Eliminate waste and reduce inefficiencies in order to provide maximum value to our customers. </li></ul><ul><li>Be responsible citizens in every community we serve. </li></ul>
    8. 8. Analysis Of Mission Statement Yes Concern for employees 9 Yes Concern for public image 8 Yes Self-Concept 7 Yes Philosophy 6 Yes Concern for survival, growth and profitability 5 No Technology 4 No Markets 3 Yes Products or Services 2 Yes Customers 1 Yes/No Components N0.
    9. 9. Objectives <ul><li>To enhance their leadership in prestige beauty around the world. </li></ul><ul><li>To deliver innovative, cutting edge products and build strong global brands. </li></ul><ul><li>Reach diverse consumers by leveraging numerous distribution channels in key markets all over the world. </li></ul><ul><li>To optimize, diversify and grow the business over the long term. </li></ul>
    10. 10. <ul><li>EXTERNAL ANALYSIS </li></ul>
    11. 11. <ul><li>PESTLE ANALYSIS </li></ul><ul><li>Political, Governmental and Legal Forces </li></ul><ul><li>The company made sure they licensed some of their global brands like Tommy Hilfiger, MAC, Bobbi brown, Donna Karan and a few others. </li></ul><ul><li>The dollar fluctuations would have an impact over the sales as the company has a global presence. (E.g. Japan, Australia) </li></ul><ul><li>The company’s manufacturing operations conform to the ISO 14001 standards. </li></ul>
    12. 12. Contd… <ul><li>The Food and Drug Administration would bring in rules for companies to follow statutory warnings. (E.g. The safety of this product has not been determined) The company should instead take safety tests and rely on passing this message onto the customers to win their confidence. </li></ul><ul><li>There have been restrictions on products that can be carried in-flight. </li></ul>
    13. 13. Contd… <ul><li>Economic Forces </li></ul><ul><li>Strengthening of U.S. dollar against the Japanese Yen. Thus it has a negative impact in Japan. </li></ul><ul><li>Price varies from product to product and brand to brand, but tend to be in the mid-high to high range of the industry. </li></ul>
    14. 14. Contd… <ul><li>Social, Cultural, Demographic and Environmental Forces. </li></ul><ul><li>Opportunities arise from increase in aging population and hence there will be increase in income from anti-aging products. </li></ul><ul><li>Younger consumers(20-30) & Teens investing in preventive cosmetics. </li></ul><ul><li>Complaints have been received into the use of animals for testing for new products. </li></ul>
    15. 15. Contd… <ul><li>Estimates show that the 70 million people across the globe will reach an income level in the next 20 years that allows purchasing of cosmetic products. </li></ul><ul><li>Emissions of fluorocarbons and other harmful gases has been an environmental threat. The company must take strict measures to control this. </li></ul>
    16. 16. Contd… <ul><li>The life expectancy of the aging population will continue to improve with difference between men and women gradually diminishing. </li></ul><ul><li>Technological Forces </li></ul><ul><li>Internet </li></ul><ul><li>Rapid technological changes in product development. </li></ul>
    17. 17. <ul><li>PORTERS 5 FORCES </li></ul><ul><li>Rivalry among competitive firms - High </li></ul><ul><li>With the presence of large and powerful competitors like L’Oreal, P&G, Avon etc who also have a variety of brands under different price ranges ESTEE LAUDER needs to innovate constantly in order to stay ahead of the competition. </li></ul>
    18. 18. Contd... <ul><li>Potential entry of new competitors – Low </li></ul><ul><li>Given the size of the market and that of the existing players it will be extremely difficult for a new player to enter into the market and emerge as a serious threat to ESTEE LAUDER or any of the other big brands. </li></ul>
    19. 19. Contd… <ul><li>Potential development of substitute products-Low </li></ul><ul><li>With a rapidly ageing population around the world especially in the developed markets the demand for cosmetics is expected to be strong and the threat of substitutes looks unlikely </li></ul>
    20. 20. Contd… <ul><li>Bargaining power of suppliers- Low </li></ul><ul><li>Since ESTEE LAUDER is a billion dollar brand it is expected that because of the volume of goods it procures from its suppliers around the world, the suppliers would have limited bargaining power . </li></ul>
    21. 21. Contd… <ul><li>Bargaining power of consumers – High </li></ul><ul><li>Due to the presence of large number of brands who cater to different segments of the market consumers can switch easily and inexpensively from one brand to another easily. </li></ul>
    22. 22. <ul><li>External Factor Evaluation (EFE) </li></ul><ul><li>List of Opportunities </li></ul><ul><li>Scope for anti aging products. </li></ul><ul><ul><li>Americans over 65 years(1/5 th of the population) spend a substantial income on anti aging products. </li></ul></ul><ul><ul><li>Life expectancy of the aging population will continue to improve. </li></ul></ul><ul><ul><li>Youngsters and teenagers purchase age preventive cosmetic items to battle effects of aging. </li></ul></ul><ul><ul><li>The world’s aging population increasing over 2.5 times next 40 years  33%  China and India. </li></ul></ul>
    23. 23. EFE Contd… <ul><li>70 million people across the globe will reach an income level in the next 20 years. </li></ul><ul><li>Rising demand from emerging and developing markets for personal products industry. </li></ul><ul><li>The Europeans buying pattern was changing from buying skincare products from mall-based specialty stores to pharmacies. Concentrate on selling skin care products through pharmacies and through skin care clinics in the Europe </li></ul>
    24. 24. List of Threats <ul><li>Top competitors in the cosmetics business </li></ul><ul><li>Currency fluctuation risks </li></ul><ul><li>Consumer complaints and inquiries due to animal testing for new products and many personal care companies are dropping this form of product testing. The company will loose its brand image if it receives complaints that it has been using animals to test new products. </li></ul><ul><li>FDA regulations </li></ul><ul><li>Increase in damaging environmental pollutions due to the use of aerosol and fluorocarbons. </li></ul><ul><li>Restrictions on products that can be carried in-flight will affect travel retail business </li></ul>
    25. 25. Contd… <ul><li>Changes in the distribution policy and a difficult retail environment particularly in fragrance category. </li></ul><ul><li>The sale of the product is dependant on the disposable income of the consumers, a fall in their incomes would result to a fall in the sales of the company’s products. </li></ul><ul><li>Competitive pricing at mega stores. </li></ul>
    26. 26. <ul><li>EXTERNAL FACTOR EVALUATION MATRIX </li></ul><ul><li>EF.xls </li></ul>
    27. 27. <ul><li>COMPETITIVE PROFILE MATRIX </li></ul><ul><li>EL_CPM.xls </li></ul>
    28. 28. <ul><ul><ul><li>INTERNAL </li></ul></ul></ul><ul><ul><ul><li>ANALYSIS </li></ul></ul></ul>
    29. 29. <ul><li>Financial Ratio Analysis </li></ul><ul><li>financial ratios(2).xls </li></ul>
    30. 30. List of Strengths <ul><li>Estee Lauder companies have 26 brands, selling in over 130 countries. </li></ul><ul><li>Each of the brands has a single global image which is promoted with consistent logos, packaging, and advertising designed to differentiate it from other brands. </li></ul><ul><li>Estee Lauder was awarded one of ten Outstanding Women in Business in the US by business and financial editors in 1967. This helped in building their brand. </li></ul>
    31. 31. Strengths Contd… <ul><li>Early use of internet in 1998 added strength to their sales. </li></ul><ul><li>Good promotional strategies: </li></ul><ul><ul><li>Discounts, gifts and free samples with purchases. </li></ul></ul><ul><ul><li>Celebrities endorsements. </li></ul></ul><ul><ul><li>Advertisements which differentiates their products from others. </li></ul></ul><ul><li>Global license and globalized operation. </li></ul><ul><li>Many channels of distribution </li></ul><ul><li>Manufacturing operations match ISO 14001 standards. </li></ul>
    32. 32. Strengths Contd… <ul><li>Innovativeness </li></ul><ul><ul><li>First dermatologist-guided, allergy tested, fragrance-free cosmetics brand. </li></ul></ul><ul><ul><li>First major prestige cosmetic firm to offer shopping via internet </li></ul></ul><ul><ul><li>First to introduce consistent brand imagery around the world. </li></ul></ul><ul><li>Wide range of distribution channels. </li></ul><ul><li>Advertisements which differentiates their products from others. </li></ul><ul><li>Global expansion as a result of strengthening of the U.S dollar </li></ul>
    33. 33. List of Weaknesses <ul><li>Indistinguishable organizational structure </li></ul><ul><li>Lower sales in Fragrance product category. As a result of this the company is struggling particularly in American region. </li></ul><ul><li>Most of the powers in the company were with the family members. </li></ul><ul><li>It is not clear whether even the four presidents have authority over the 4 product lines. </li></ul>
    34. 34. <ul><li>INTERNAL FACTOR EVALUATION MATRIX (IFE) </li></ul><ul><li>IFE+MATRIX.xls </li></ul>
    35. 35. <ul><li>STRATEGY ANALYSIS </li></ul>
    36. 36. <ul><li>INTERNAL EXTERNAL MATRIX(IE) </li></ul><ul><li>Total Weighted score of IFE = 2.86 </li></ul><ul><li>Total Weighted score of EFE = 3.4 </li></ul>
    37. 37. Recommended Strategies <ul><li>Grow & Build </li></ul><ul><ul><li>Backward, Forward and Horizontal Integration </li></ul></ul><ul><ul><li>Market penetration </li></ul></ul><ul><ul><li>Market development </li></ul></ul><ul><ul><li>Product development </li></ul></ul>
    38. 38. <ul><li>SPACE MATRIX </li></ul><ul><li>SPACE Matrix.doc </li></ul>
    39. 39. Recommended Strategies <ul><li>Backward, Forward, horizontal Integration. </li></ul><ul><li>Market Penetration. </li></ul><ul><li>Product Development </li></ul><ul><li>Market Development </li></ul><ul><li>Diversification </li></ul>
    41. 41. Recommended Strategies <ul><li>Market development </li></ul><ul><li>Market penetration </li></ul><ul><li>Product development </li></ul><ul><li>Forward integration </li></ul><ul><li>Backward integration </li></ul><ul><li>Horizontal integration </li></ul><ul><li>Related diversification </li></ul>
    42. 42. <ul><li>STRATEGIES FOLLWED BY THE COMPANY </li></ul><ul><li>After failing to convince Madison Avenue, they sold product directly targeting the high-class customers. Sold through boutiques and departmental stores initially. The products were later selectively distributed to other store in US. </li></ul><ul><li>They were able to beat the competition by continuously introducing different brands into the market. </li></ul>
    43. 43. Contd… <ul><li>A separate department, ELC Online, was created to maintain all online strategies and activities for all of its brands. </li></ul><ul><li>Prices are kept very competitive to match the target segment (the rich) </li></ul>
    44. 44. <ul><li>STRATEGIES THAT COULD BE SUGGESTED </li></ul><ul><li>Rely on the global brand awareness and build it further by endorsing celebrities from the local markets. </li></ul><ul><li>Have tie-ups with beauty salons, clinics etc to push their brands. </li></ul><ul><li>Using market research, find the brands that have been doing poorly and makes strategies to either improve it or close its operations. Having an idle brand will add on as a burden to the company. </li></ul>
    45. 45. Contd… <ul><li>Do not have too many brands for the same product category since it will lead to cannibalization. </li></ul><ul><li>Innovation is the key. Identify new customer needs like anti aging products and bring in products that suit the customers better. </li></ul><ul><li>Focus more on selling over the internet. It would be the best channel to attract the youth with so much happening over the internet. </li></ul>
    46. 46. Contd… <ul><li>The company should go ahead with the plan of acquiring Murad Inc. </li></ul><ul><li>Introducing new brand that is priced more economically. </li></ul><ul><li>New strategies for testing. </li></ul>
    47. 47. Reference <ul><li>Strategic Management by Fred R. David </li></ul><ul><li> </li></ul>