ApresentaçãO Natura

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ApresentaçãO Natura

  1. 1. CASE STUDY REHEARSAL: NATURA Group: Alexandre Matheus Fernanda Ferreira Martha Romo Myrza Muniz Secles Souza Rio de Janeiro, 21 st July, 2008 Marketing in Complex Contexts Profs. Delane Botelho & Jonathan Speier
  2. 2. <ul><li>Background Facts/Symptoms </li></ul><ul><li>Opportunity Statement </li></ul><ul><li>Alternatives </li></ul><ul><li>Evaluation of Alternatives </li></ul><ul><li>Recommended Solution </li></ul>
  3. 3. <ul><li>Background Facts/Symptoms </li></ul>
  4. 4. Greenfield operations France (Paris) Success with owned retail store Greenfield through direct sales and store chain Mexico Success with hybrid model Piggyback exporting Argentina, Bolivia, Peru and Chile Success through partnership with local distributors Direct exporting Portugal and USA (Florida) Failure Greenfield through Direct-sales Brazil Success Mode of entry used Countries Entry outcomes
  5. 5. <ul><li>Opportunity Statement </li></ul>
  6. 6. A) Natura is evaluating whether Russia should be its next step towards global expansion. B) The next place and mode of entry that Natura should consider in order to expand to other countries, if Russia is not chosen. Opportunities
  7. 7. <ul><li>Alternatives of Opportunity A </li></ul>
  8. 8. Alternative 1: Greenfield operations with direct sales – same as Brazil Alternative 2: Piggyback exporting Alternative 3: Greenfield operations with hybrid model (direct sales + store chain) Alternative 4: Greenfield operations with owned retail store Opportunity A: Entering Russia Alternative 5: not entering Russia
  9. 9. <ul><li>Evaluation of Alternatives from Opportunity A </li></ul>
  10. 10. Evaluating Alternatives: Entering Russia <ul><li>Not Natura’s core value </li></ul><ul><li>Risky </li></ul><ul><li>High control of the operations </li></ul><ul><li>High penetration </li></ul><ul><li>High exposure – disseminates the brand </li></ul><ul><li>Fit to the way Russians are used to buy their cosmetics and toiletries </li></ul>Alternative 4A: Greenfield operations with owned retail store <ul><li>High costs when adopting direct sales + store </li></ul><ul><li>Difficulty in finding staff </li></ul><ul><li>Risky </li></ul><ul><li>- A partner, even one with strong direct-sales expertise might not share Natura’s values and beliefs </li></ul><ul><li>Combination of two brands can destroy Natura’s one </li></ul><ul><li>Huge time consuming </li></ul><ul><li>This strategy didn’t work for some countries </li></ul>Disadvantages <ul><li>High control of the operations </li></ul><ul><li>High penetration </li></ul><ul><li>Direct Sales is in fast pace in Russia </li></ul><ul><li>High exposure – disseminates the brand </li></ul>Alternative 3A: Greenfield operations with hybrid model <ul><li>A partnership is something that Natura’s executives are considering when trying to go global </li></ul><ul><li>Less costly </li></ul><ul><li>Direct Sales is in fast pace in Russia </li></ul>Alternative 2A: Piggyback exporting <ul><li>Natura has the necessary expertise </li></ul><ul><li>It is the company’s core value </li></ul><ul><li>Direct Sales is in fast pace in Russia </li></ul>Alternative 1A: Greenfield operations with direct sales Outcomes Advantages Alternatives
  11. 11. <ul><li>Postpone the possibility to go global soon in a country where the market is growing in fast pace </li></ul><ul><li>The financial indicators point Russia as a promising market (very similar to Brazil regarding the main drivers – fragrance, cosmetics and toiletries </li></ul><ul><li>Possibility to spend the money in better investments </li></ul><ul><li>More time to study the Russian market in order to enter later on </li></ul><ul><li>Avoid the risk of investing with not enough information </li></ul>Alternative 5A: not entering Russia <ul><li>Russians know nothing about Brazil </li></ul><ul><li>Russia: has strong bureaucratic obstacles/ poor legislation in product quality/counterfeiting </li></ul><ul><li>Tough competition and high costs </li></ul><ul><li>Language, climate and geographic distance </li></ul><ul><li>Russia: not concerned about environmental issues – against Natura’s core value </li></ul>Disadvantages <ul><li>Russia: cosmetic & toiletries market in fast growth </li></ul>Common features Outcomes Advantages Alternatives
  12. 12. <ul><li>Alternatives of Opportunity B </li></ul>
  13. 14. Alternative 1: Greenfield operations with direct sales – same as Brazil Alternative 2: Piggyback exporting Alternative 3: Greenfield operations with hybrid model (direct sales + store chain) Alternative 4: Greenfield operations with owned retail store Alternative 5: not entering UK Opportunity B: Entering UK
  14. 15. <ul><li>Evaluation of Alternatives of Opportunity B </li></ul>
  15. 16. Evaluating Alternatives: Entering UK <ul><li>Not Natura’s core value </li></ul><ul><li>High risk and cost </li></ul><ul><li>High control of the operations </li></ul><ul><li>High penetration </li></ul><ul><li>High exposure – disseminates the brand </li></ul>Alternative 4B: Greenfield operations with owned retail store <ul><li>High costs when adopting direct sales + store </li></ul><ul><li>Risky </li></ul><ul><li>- A partner, even one with strong direct-sales expertise might not share Natura’s values and beliefs </li></ul><ul><li>Combination of two brands can destroy Natura’s one </li></ul><ul><li>Huge time and cost consuming </li></ul><ul><li>This strategy didn’t work for some countries </li></ul>Disadvantages <ul><li>High control of the operations </li></ul><ul><li>High penetration </li></ul><ul><li>High Direct Sales acceptance </li></ul><ul><li>High exposure – disseminates the brand </li></ul><ul><li>Less logistics costs: shipment France + UK </li></ul>Alternative 3B: Greenfield operations with hybrid model <ul><li>A partnership is something that Natura’s executives are considering when trying to go global </li></ul><ul><li>Less costly </li></ul><ul><li>High Direct Sales acceptance </li></ul>Alternative 2B: Piggyback exporting <ul><li>Natura has the necessary expertise </li></ul><ul><li>It is the company’s core value </li></ul><ul><li>High Direct Sales acceptance </li></ul>Alternative 1B: Greenfield operations with direct sales Outcomes Advantages Alternatives
  16. 17. <ul><li>Postpone the possibility to go global soon in a country where the market is growing in fast pace </li></ul><ul><li>the financial indicators point Russia as a promising market (very similar to Brazil regarding the main Drivers – fragrance, cosmetics and toiletries </li></ul><ul><li>Possibility to spend the money in better investments </li></ul><ul><li>More time to study the Russian market in order to enter later on </li></ul><ul><li>Avoid the risk of investing with not enough information </li></ul>Alternative 5B: not entering UK <ul><li>Tough competition and high costs </li></ul>Disadvantages <ul><li>Language </li></ul><ul><li>Geographic distance when compared to Russia </li></ul><ul><li>UK: 5 th major C&T market, detaining 5% of the global sales in the category </li></ul><ul><li>UK: 0.5% of GDP per capita is spent on C&T </li></ul>Common features Outcomes Advantages Alternatives
  17. 18. <ul><li>Recommended Solution </li></ul>
  18. 19. Since the case does not provide us with enough demographic data, Natura should not enter Russia, since Russian market does not cope with the company’s environmental positioning and the cultural barriers seem hard to trespass. Considering the scarce data available, we recommend as the next step towards global expansion, entering UK, with a hybrid model: through Greenfield operation and store chain – ALTERNATIVE 3B Although costly and risky, UK has a strong C&T market, as well as a strong direct-sales culture. Shipments to UK would less costly to Natura, once the products can come together with the French orders. “ Natura’s decision-making process combines: financial, philosophical and emotional components envisioning a balanced value creation to shareholders, society and environment.”

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