Porter's Five Forces Of Cosmetics Industry

| * 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

Porter has identified five (5) competitive forces that shape every industry and every market. The forces determine the intensity of competition and hence the profitability and attractiveness of an industry. Based on the information derived from this analysis, management can decide how to influence or to exploit particular characteristics of this industry.

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

The first competitor we have chosen for this assignment is the makeup brand NYX Cosmetics. The name NYX comes from a Greek goddess whose name was Nyx, as she was referred to “a goddess in the night”. This brand is among top competitors with e.l.f. because of his availability, trends, price, and variety of items in their product line. Some of NYX’s products consist of foundation, lipstick, blush, primer, eyeliner, color correctors, eye shadow, and other eye accessories. We found in a recent article titled 15 Affordable Makeup Brands You Should Know About that stated, “they (NYX) have a wide assortment of lip products that range in color and texture, eyeliners that can and will do anything you’d dream of and a series of roll-on glitter powder too!” (Thetalko, 2015). With that being said, it seems to be that NYX Cosmetics has just about every other quality (and maybe more) than e.l.f. Also, its type of availability and accessibility is similar to e.l.f. in that you can find NYX makeup products in just about every general store or makeup store. Some stores that carry this brand are Ulta, Walmart, Nordstrom Rack, and Walgreens. While other factors play into the “popularity” of this makeup brand, NYX Cosmetics sells products that range from $4 to $30. The second competitor we chose for this assignment is the makeup brand Makeup Revolution. While this brand is not sold in many stores, its online sales make up for its limited access. However, this makeup brand is sold in one of the

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

Based on some of the findings from the tables above we also found that in skin care the most profitable area to expand.. Referring to tables 5, 6, 7 and 8 we see that the skin care industry is broken into face, hand and body care. The tables tell us that most sales are contributed by facial care products, and also the growth rate in this area is also one of the highest. This is the reason why facial care is analysed more in detail in the following pages. To illustrate this better refer to the following table.

This analysis is conducted on the Porters Five Forces theory that is crucial for effective strategic decision-making, the five forces that shape industry competition are:

Cosmetics and personal care industry is growing day by day as people are becoming more sensible about their appearance. Not only women but men are also attracted to improve their looks. Canadian men had started taking care of their skin and became more conscious about beauty to enhance their professional credibility. Men’s grooming market has viewed growth since 2010 with little downfall in 2014 and then again grew and reached at CAD 1,009.0 million in 2015 (Graph 1) (Passport

This company does all the analyzing and grass roots work for your business to stay ahead of the power curve in its industry. Since 1996, the prestige beauty industry has relied on NPD’s comprehensive beauty market research and business solutions to deliver insights into what is selling, where, why, and at what price. Our research includes information for the U.S., Canada, France, Italy, Mexico, Spain, and U.K. beauty markets. It helps companies address the emerging trends, needs, and behaviors of the next generation of beauty consumers.

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

Cosmetics has continued to be a big part of civilization throughout the years. The cosmetic business brings in about 200 billions of dollars each year

Cosmetics fall into their own marketing arena. It is the only other product, besides food, that consumers are in constant need of because cosmetics are used in our everyday lives. Cosmetics, in order to have any type of customer base, are made with great quality in mind. With all these different brands offering the same types and qualities of products, Dove had to branch out into another important segment of this cosmetics market. Cosmetics are being used just as much by men as they are used by women, and it is important that a cosmetics product line can compete in the market of men’s products as well. Dove’s main competitors, Nivea, L’Oreal, and Garnier, have not crossed into making men’s products. The lack of men’s products gives Dove a competitive advantage in their arena. Dove has dominated in this category through their marketing and different direction.

Cosmetics are seen everywhere in the market nowadays. Those who care a lot about how

Porter's Five Forces can be applied to particular companies, market segments and industries with the step-by-step analysis of market structure and competitive situation. First of all, when implementing this module in organizations, it is necessary to determine the scope of the market to be analyzed. Following, all relevant forces for this market analyzed and key forces are identified (Gerry and Kevan, P.117). Actually some organizational strategy and the longer-term goals are mainly based on or consistent with the key forces. Hence, it is not necessary to analyze all elements of all competitive forces with the same depth. Moreover, the key forces in the competitive environment will vary in different industry. Different forces take on prominence in shaping competition in each industry (Porter,

Many cosmetic brands are popping up recently, perhaps, due to the increasing consumers of products that beautify and enhance the physical appearance of a person. Even though the market is already full of the said cosmetic brands, the company L’Oreal Groups could still be considered as the leading supplier of cosmetics and hair-color. This study is a brief overview of the marketing concepts and strategy of the said company. The company profile will be presented to be able to give a clear view of the market to which the company belongs to. An internal and external (SWOT) analysis of the company will also be provided in this paper. Another area will be specifically devoted to