Estee Lauder SWOT Analysis
Estee Lauder, based in New York City, is a manufacturer of cosmetic products that include skincare, makeup, fragrances, and hair products. The company was founded on 1946 by Mrs. Estee Lauder. Their mission statement: “Bringing the Best to Everyone We Touch”. Some of the best known brands that are sold under its umbrella are Aramis, Clinique, Prescriptives, Lab Series Skincare for Men, Origins, Tommy Hilfiger, M·A·C, Kiton, La Mer, Bobbi Brown, Donna Karan, Aveda, Jo Malone, Bumble and bumble, Michael Kors, Darphin, American Beauty, Flirt!, GoodSkin Labs, Grassroots Research Labs, Sean John, Missoni, Daisy Fuentes, Tom Ford, Coach, Ojon and Smashbox.
· Strong Brand Reputation (The brand is associated with luxury & quality. Also has a strong brand portfolio).
· Research & Development (Role model and leader in identifying consumer needs, and preferences and developing products accordingly).
· Strong Distribution Network (The products are sold to a limited stores that compliments the image of the brands such as department stores, upscale perfumeries, specialty stores, professional hairdressers etc. specially in U.S.)
· Vigorous Revenue & Profitability (Net Earnings for fiscal year 2010 $478 million while Net sales were $7.8 billion.)
· 31,000 employees working under its umbrella, full-time. (approximate value)
· Products are sold in more than 150 countries.
· Powerful marketing techniques used by the firm: Free Gift, Gift-With-Purchase, Makeup Artist Events (for trying out the new products) etc.
· Breast Cancer Awareness program has been initiated that will work for the well being of the general public as well as the social stature of the firm sky rocketed, as both the awareness of the firm and Breast Cancer were going hand-in-hand.
· Operations and cost maintenance with the firm holds a strong positive attitude in the long run.
· Lack of concentration regarding customer value (Client.)
· Profit oriented (loses sight of the customer)
· Weak Liquidity Position (decline in the firm’s liquidity in the past few years.)
· Distribution Network’s lack of reach to other viable markets.
· Declining operating income in various market marks the weak penetration of the products in those specific markets.
· New markets are emerging in various countries where the firm can inject its products, such as India, China (known to be the 2nd largest cosmetics market in Asia) etc.
· Markets where wealthy rule is also a good opportunity to tap in because of the tendency of the wealthy to own luxury commodities.
· Many nations are growing to be beauty conscience every passing day; the firm will do well in order to tap-in without any delay and initiate in order to get customer loyalty attached to its products.
· Diversification of the distribution channels.
· Expansion to global markets, worldwide.
· Intense competition in cosmetics has increased and market initiators with quality providers are a serious threat to the firm.
· New entrants, even though the market has considerably mature in the sense that it has captured customer loyalty, but there is always room for improvement in this field.
· Counterfeit commodities affect the sales of the branded commodities. 9%, according to the Global Congress on Combating Counterfeiting, of all the world trade comprises counterfeit goods.
· Regulations are increasing due to the voicing of different groups about harmful chemical ingredients in cosmetic products.