Porter's Five Forces Cosmetics

| * Introduction of new substitute products * More competitors trying to entry the market (saturation) * Increase of production costs * Maturity of the cosmetic industry * More importing regulations

The purpose of this report was to investigate a cosmetic company, which is called Stila Cosmetics, in United States of America.

L’Oréal has managed global-local tensions by deploying professionals with multicultural backgrounds for the purposes new product development. The strategy is the main reason for L’Oréal’s impressive success in emerging markets as the company has transformed itself from a very French beauty products business to a global leader, multicultural executives have come to play a critical role in product development not just in Paris but also in New York, Tokyo, Shanghai, Rio, and Mumbai. In terms of distribution channel, product distribution is done with respect to its need and is cost effective by used agents and consignments to USA, Japan and other Asian

This report is based on the ‘L’Oreal: Expansion in China’ case study. L’Oreal is a successful French cosmetic company that involved into many different international markets. This report will discuss how L’Oreal gets into the Chinese cosmetic Market and the strategic to develop their brand in the Chinese market. L’Oreal acquires two famous Chinese cosmetic brands which are Yue-Sai and Mininurse. It is in order to entrance the market quickly and sales the most suitable products. The aim of this report is to define the challenge L’Oreal has been faced. Then it describes how L’Oreal managing their strategic in Chinese market. In addition, it gives an accommodation which could help L’Oreal overcoming these challenges.

Changes in price can affect buyers' purchasing decisions; this effect is called the income effect.

Porter’s Five Forces is defined as threats of new entrants, bargaining power of suppliers, power of buyers, the threat of substitutes and rivalry among existing competitors. New entrants into the industry aim to gain market share from rivals, so the intensity of competition may require to make changes on current strategy of marketing to maintain existing market share. The bargaining

The price adjusts to rise when the quantity demanded exceeds the quantity supplied and for price to fall when the quantity supplied exceeds the quantity demanded is a central elements to supply and demand. Although individuals tendencies to change prices exist as quantity supplied and quantity demanded differ the changes in price brings the law of supply and demand into play. Whenever the quantity supplied and quantity demanded are unequal, price will stay the same cause no one will have an incentive to change. One thing to remember equilibrium is not the model framework they use to look at the world. Although to establishing the current value of a consumer product Economics has evolved through the centuries there are a few factors that led to a change in

there are a number of different buyers and sellers in the marketplace. This means that we have competition in the market, which allows price to change in response to changes in supply and demand. Furthermore, for almost every product there are substitutes, so if one product becomes too expensive, a buyer can choose a cheaper substitute instead. In a market with many buyers and sellers, both the consumer and the supplier have equal ability to influence price.

I believe prices can remain high as long as demand supports it, but demand is not constant and will rise and fall until equilibrium is reached.

This is because they have involved in providing hair and skin treatment. The company has good amount of market share in the cosmetic and hair treatment market. The market share of the company comprises about 55% whereas the market share of the competitors of Total face group consists of 25%. There are other various small businesses that operate in the market which has the similar market share of 20% (Movado and Rodrigo, 2001, p.171). By working in such an environment there are few competitors of Total face group retail so the business environment in which the company operates cannot be stated as the monopoly. Rather it is the competitive market where there are other firms who can enter the market and leave the industry as an when they want. There are various close substitutes that other companies sell. The Syngenta Limited sells close substitutes like the home-based products. The cost on which Total face group produces and sells its products is suitable for the average income of the consumers. The company is able to provide hair and skin treatment products to the households at an appropriate and affordable price which can be purchased by both the higher as

Under Armour Inc. is a relatively new competitor in providing high quality and functional sporting goods. Under Armour Inc. encompasses footwear, apparel, and accessories for all types of sport enthusiasts. The company currently provides jobs to about 10,700 employees. However, they are still up and coming and are expected to create new opportunities and work for many others. Their main headquarter is located in Maryland, Baltimore. Though they operate all over North America, Asia, and certain countries of Europe. Throughout all their operations they mostly sell through retailers and whole sale. In addition, they do have factory outlets and their own “direct to consumer” channels located in North America. Under Armour has really been on the

In “P&G Japan: The SK-II Globalization Project” case study, the author Christopher Bartlett presents the P&G’s plan of pushing SK-II as a global beauty product. In late 1999, Paolo de Cesare, President of Max Factor Japan, had given an idea to the Global Leader Team (GLT) of P&G’s Beauty Care Global Business Unit (GBU) that whether it was a good idea for pushing SK-II to become a global P&G brand. Since the product was successful in Japan ($150 million in sales in 1999), P&G then was considering in expanding its SK-II to be distributed worldwide. There was also an effort of the Global Growth strategy of P&G at that time as an influence factor to

Porter national diamond analysis Supporting Industries Superior in-store infrastructure Counseling counters Cosmetic R&D centre MDO, Max factor Strategy, Structure and Rivalry High number of domestic competitors with high innovation. Tough competition Presence of prestigious foreign brand Intense, established, well respected , high experience and famous competitors Limited competitors in high-cosmetic market which can lead to low innovation and learning improvement as well as an opportunity to easily reach a huge market for P&G

Further Penetrate the Japanese Market: Currently, Japan remains SK-II¡¦s most attractive and proven market for this product-line. Having already established brand recognition, high awareness (+70%), and a loyal and growing customer-base (spending $1,000/year+), P&G should focus on further penetrating this market. Japanese women are among the world¡¦s most sophisticated users of beauty products, and per capita they remain the world¡¦s leading consumer of the prestige and multi-step offerings „³ SK-II¡¦s Japanese target market is well-defined and very loyal once acquired. Furthermore, having succeeded in Japan before with its ¡§Lipfinity¡¨ launch, P&G has existing distributor relationships and has viable access to these customers. Rather than investing heavily to enter new markets such as China or Europe, P&G can more effectively direct these resources to expand/extend the product-line and develop newer, profitable Japanese segments. P&G can also rely on its existing sales model and target the sophisticated and informed Japanese consumer by offering technologically enhanced products and systems such as: 1)

The report is about the market segmentation, targeting and positioning of the tooth paste industry in the local market of Mauritius. For a total population size of approximately 1, 2 million, toothpaste represents 80% of the market. This market is being shares which Colgate Palmolive which represents Colgate has 45% of the market share and the rest is being played among Aquafresh 20% and Blendax occupies 14% of the market share. 21 % of the toothpaste market shares are occupied by Signal, Close up, Casino and other make of toothpaste. Nowadays to be able to survive in this fierce competition world, firms need to satisfy the needs of its potential customers, hence keeping the existing and gaining new ones. For this to be