Estee Lauder Inc.

9371 Words Jan 5th, 2011 38 Pages
Contents
1 INTRODUCTION 2
2 SITUATION ANALYSIS 3
2.1 General Environment—PEST Analysis 3
2.2 Industry Environment 4
2.2.1 Industry Definition and Overview 4
2.2.2 Competitors Profile 4
2.2.3 Porter’s Five Forces 6
2.2.4 Critical Success Factors 7
2.3 Company 7
2.3.1 Financial Analysis 7
2.3.2 Product Mix 10
2.4 Problem Identification 11
3 SWOT 12
4 STRATEGY FORMULATION 13
4.1 Strategy Formulation 13
4.2 Target Market 15
4.3 Product Mix Changes 19
4.3.1 Product 19
4.3.2 Price 20
4.3.3 Promotion 20
4.3.4 Place 20
5 IMPLEMENTATION 23
6 CONCLUDING REMARKS 25
REFERENCES 26

1 INTRODUCTION
Estée Lauder Companies, Inc. (ELC) is one of the world’s leading manufacturers and marketers of quality skin care, makeup,
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* Emerging markets that have high economic growths i.e. Eastern Europe, Latin America, and Asia replace the maturing, developed, western markets. * Changes in disposable income, tendency of consumers to spend * Employment rate of women is an important factor, as majority of the clientele for ELC are women * Exchange rate fluctuations impact company’s bottom line significantly * China’s increasing capability to develop products and compete in global markets * Worsening USA economic situation: The perfume, cosmetic and personal products industry had established a “recession proof” image when sales of inexpensive cosmetics had outsold mid-priced food items and clothing during the Depression of the 1930s. Cosmetics also did well during the recession of the 1960s and 1980s. The recession of 1990s, however, brought new challenges. Counterfeit products were offered as low prices. Customers resisted high prices and demanded value. The number of distribution channels for upscale lines decreased as traditional department stores started to close. Costs associated with product promotion increased and marketers turned more often to the expensive strategies such as giving free products. For ELC products that are ranked among prestige this can be one of the most serious threats. | Social | * Aging baby-boomers who have high spending power, tend to spend more on beauty * The world’s aging population and an

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