1.0 CASE ABSTRACT

Based in New York City, Estee Lauder has been one of American’s major corporations as well

as being one of the world’s leading manufacturers and marketers of quality skin care, makeup,

fragrances, and hair products. The company was first established in 1946 and became public in

November 1995. Up until today, Estee Lauder expands its sales to over 140 countries with more

than 9000 products under various brands. Products of Estee Lauder are divided into skin care,

makeup, fragrances, and hair products. Products of Estee Lauder are mostly marketed around the

globe through the use of mediums such as department stores, specialty retailers, upscale

perfumeries, pharmacies, salons, and spas. Estee Lauder also owns free standing stores where

products also marketed as well as the use of technological facilities offered by modernization

such as e-commerce in selected countries.

Estee Lauder focuses its strategies towards global reach that emphasizes continuous

research and development with investments over 80 million dollars to the program itself mainly

done in the United States, Belgium, and Japan. Estee Lauder allocated alongside these research

and development facilities are manufacturing facilities within these countries as well as Canada,

Switzerland, China, and Germany where all the manufacturing facilities are strategically located

near the marketing area where the products are actually distributed. By maintaining low cost

strategy and keeping the sales revenues high, Estee Lauder aims to occupy the entire market

niche ranging from the low end up until the very high end market niche. By doing so and

additionally with its wide variety range of brands, Estee Lauder emphasize the idea that

everybody can have a slice of the pie. Estee Lauder also astonishingly able to maintain a positive

net income even though the globe went through massive recession and beyond which also

signifies how strong of a company Estee Lauder is.

Estee Lauder founded the 8 billion dollars company, Estee Lauder Companies which is

currently an organization that engaged in four main spectrums of beauty products throughout the

globe covering activities such as manufacturing, marketing, and sales. Estee Lauder

revolutionized the cosmetic industry with just a simple and plain idea of: every woman can be

beautiful. It all started in her kitchen when she began making face creams which later went

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forward and sells them to beauty salons. Her effort, creativity, philosophy, and drive brought

about the launching of Estee Lauder Company in 1964 together with her husband. She also

pioneered the gift with promotion and also gave away samples of her products with every

purchase. She believed that in order to make a sale, you had to touch the customer, to show them

first hand and explain the products, which leads the company towards the personal High-Touch

service strategy. Creativity, entrepreneurship, and integrity is the three core values for Estee

Lauder and still remain as the focal point of the company and these three core values managed to

bring the company up to the level of being the global leader in prestige beauty with High-Touch

strategy being the central feature of Estee Lauder’s services.

Estee lauder proved its resilience by its successful fiscal year in 2010 after disappointing

2009 downturn. Estee Lauder’s net sales increased 6% due to the growth in makeup, skin care,

and hair care products which generates a record gross margin of 76.5 %. Operating income

almost doubled from 2009 to 2010 and net earnings increased from 218 million to 478 million.

Skin care products contributes the highest income where it account for 41 % of net sales

followed by makeup at 38 % , fragrance at 15 %, and hair care products at 5 % of net sales. Most

of Estee Lauder’s sales derived from outside of North and South America which account for 56

% of net sales. Net sales in America remained relatively flat with increase of less than 1 % which

accounts for 36 % of net sales for Estee Lauder. In Europe, the Middle East, and Africa, net sales

increased up to 9 % which reflects higher net sales from travel retail and distributor businesses.

Net sales in Asia/Pacific also shows increase up to 16 % in 2010. The strategic growth of in

China alongside positive outcome from Korea and Hong Kong also contributed towards the

increase of net sales in Asia/Pacific.

By the year 2004, the company lost its most important person and that is Mrs. Estee

Lauder herself due to cardiac arrest. The loss was a great one for the company, but Mrs. Lauder

herself witnessed her empire growth from a small home based operation into worldwide global

transactions and up until now proudly stands on the top of the industry where Estee Lauder

herself revolutionized during her time. Now, the company is led by her Estee and Josephs’

children and grandchildren. The company is 70% owned by the Lauder Family which dominates

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the voting shares and the current chairman of the company is the grandson of Estee Lauder

acting as the chairman of the Board of Directors.

2.0 VISION AND MISSION STATEMENT

Estee Lauder’s Companies vision is “Bringing the best to everyone we touch and being

the best in everything we do. By the best we mean the best products, the best people, and the best

ideas”. The company is very committed towards uncompromised ethics and integrity covering all

domestic and global scale as well as the board of directors. The very condition of employment

standardized by Estee Lauder is the highest standard of ethics of professional and personal

conducts. Estee Lauder does not have any written mission statement for the company.

2.1 Proposed Vision and Mission Statement

A vision is like an objective of the company that incline where the company wants to be, what

the company wants to achieve, what the company wants to be, and what the company wants to

do. As for this case analysis, most of the time the vision statement is also included with certain

time frame but it is not a mandatory criteria, the proposed vision statement is:

“To become the world’s largest and most influential cosmetics firm”

A mission statement is basically is the statement of how will the company achieve the its vision.

In this case abstract, the proposed mission statement is taken from the current vision statement of

the Estee Lauder which is:

“Bringing the best to everyone we touch and being the best in everything we do.

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3.0 OPPORTUNITIES

1. Rising demand from developing and emerging markets where in the next 20 years there

will be more than 70 million working population across the globe will reach an income

level that allows purchasing of cosmetics products

2. The whole continent of Africa is coming online which will bridge the geographical gap

between companies and their consumers in a more effective and efficient manner.

3. Global women’s’ purchasing power is expected to increase by 5 trillion by 2015 and

beauty is the category these consumers are most likely to spend money on after food and

clothing.

4. By the year 2030, Americans over the age of 65 will represent one-fifth of the population

which is expected to devote a substantial part of their discretionary income into anti-

aging product.

5. Younger customers age 20 to 30 years old are choosing to invest their money into

preventive cosmetics to battle the effects of aging. Additionally the teens also thinking

about spending their money on these type of products.

6. By the next 40 years, the world’s aging population will multiply by 2.5 times

representing over 33% of the total population.

7. Life expectancy for the aging population will continue to improve providing substantial

period of marketing opportunities and durability within the industry for specific market

target.

8. Green products appear to be maintaining their position in the economy struggle and these

“natural” and “organic” products appear to be favorably received by consumers.

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4.0 THREATS

1. High unemployment where the increase levels of job insecurity among the working

population will decrease most of the peoples’ purchasing power.

2. The rising of energy prices will significantly impact transportation costs such as gas

prices. The increase of energy prices will also increase the producing costs of pulp

through the increase of gas price. Pulp is used in the manufacturing of plastic used for

packaging.

3. Regulations by U.S Department of Agriculture under the Standards of the National

Organic Program (NOP) which states that 95% of the products’ contents must be organic

and this regulations also extends to the manufacturing processes.

4. Aggressive competition by the competitors that are targeting the same market segment

5. Change of Consumers’ spending pattern of luxury goods.

6. Competitive pricing of other similar effect or substitute products which are sometimes

amount to 60% lower.

7. Internet security threat on its e-commerce application

8. Foreign currency fluctuations

9. Changes in laws, regulations, and policies of either the base country or the target country

which will bring significant impact towards the ability and efficiency of marketing in that

particular country. Changes in regulations also came from the increasing activities of

different groups voicing their objection towards harmful chemical ingredients and the use

of animal as test subjects in cosmetics products.

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5.0 COMPETITIVE PROFILE MATRIX

5.1 Summary of Competitors

Company Revenues

(Billions)

Net Income

(Billions)

Employees Countries

Marketed

Avon Products 10.862 0.6063 N/A 100

Colgate-Palmolive 15.564 2.203 N/A N/A

Estee Lauder 7.795 0.478 22000 150

L’ Oreal 19.5 2.2 66619 130

Pocter & Gamble 78.9 19.1 127000 140

Revlon 2.167 0.0946 N/A N/A

Based on the summary of the competitors given above, Procter & Gamble (P & G) is the

biggest competitor for Estee Lauder based on the numbers of employees worldwide and the

amount of net income and additionally most products of P&G compete directly with the products

from Estee Lauder. Another competition that must be taken into great consideration is Avon

whereby Avon competes with Estee Lauder with almost all spectrums of products which Estee

Lauder offers to consumer. Other competitors such as Revlon and Colgate-Palmolive are also

significant competition to Estee lauder but due to the insufficient data, the other competitors will

be used instead for the Competitor Profile Matrix. Therefore, these 2 competitors; P&G, and

Avon will be used in the Competitor Profile Matrix (CPM).

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5.2 Competitive Profile Matrix

  Estee Lauder Procter & Gamble AvonCritical Success Factor

Weight

Rating Weighted Rating Weighted Rating WeightedScore Score Score

Market Share 0.15 3 0.45 3 0.45 2 0.3Price Competitiveness

0.1 2 0.2 3 0.3 3 0.3

Financial Position 0.07 2 0.14 4 0.28 3 0.21Product Quality 0.1 2 0.2 4 0.4 3 0.3Employees 0.05 1 0.05 4 0.2 3 0.15Customer Service 0.1 4 0.4 4 0.4 4 0.4Low Cost Structure 0.13 2 0.26 3 0.39 2 0.26Variety of Products 0.05 4 0.2 4 0.2 4 0.2Distribution Channels

0.1 3 0.3 3 0.3 4 0.4

Strong Online Presence

0.05 4 0.2 2 0.1 2 0.1

Advertising Abilities

0.05 2 0.1 4 0.2 4 0.2

Marketing Abilities 0.05 3 0.15 4 0.2 4 0.2Total 1 - 2.65 - 3.42 - 3.02

The weight for each factor represents the significance of the factors that range from low

importance (0.0) to high importance (1.0). In the table above, the higher the weight for the factor,

the more critical the factor is towards success of the company. The ratings range from 4 to 1

where 4 represent major strength, 3 for minor strength, 2 for minor weakness, and 1 for major

weakness. Each company receives a score on each factor and the total score is simply the sum of

individual score for each company. Company that receives higher score is relatively stronger

than its competitor.

The success factor with the highest weight is the market share. Market share represents

customers and is the most important thing in a stiff competing environment especially when the

competitors are relatively larger in many aspects from the company itself. Estee Lauder only

rated 3 which represents for minor strength, while P&G were rated 4 for major strength, and only

2 for Avon that represents minor weakness. Even though Estee Lauder posses the most number

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of countries where products are distributed with over 150 countries worldwide, but among these

3 companies Estee Lauder were the less profitable company rather than Avon with only 100

countries with its marketed products and of course P&G with only 140 countries but stands at the

top with the highest value of revenues and net income generated. The second highest factor is the

low cost structure where Estee Lauder only rated 2 which indicate minor weakness as Estee

Lauder utilizes the prestige price strategy and focused more on mid range to high range price

levels. The next important factors are price competitiveness, product quality, customer services,

and distribution channels. Among these 4 factors, Estee Lauder only scored one of them as its

major strength, one minor strength, while the other two were rated as minor weakness. Other

factors that Estee Lauder were rated as major strength are variety of products which beat other

competitors with over 9000 products distributed under 28 different brands, and strong online

presence as Estee Lauder is the first prestige cosmetics firm that introduces shopping via

internet. The other factor especially those with higher weight did not score very well as the other

competitors do. The total weighted score for Estee Lauder is 2.65 which is just slightly above the

average score and being the lowest of the 3 competing firms. Even though considering the size of

the company with the lowest number of employees rather than the other two Avon and P&G

company, Estee Lauder actually doing considerably good in the harsh and fierce competing

environment particularly within the same market segment for the industry.

5.2.1 Intensive Marketing Strategy

Based on the result obtain with the competitive profile matrix, what Estee should do is to

improvise its intensive strategies involving market penetration to increase market share for

present products in present markets which at the same time will also improve other factors such

as financial position. Marketing efforts also include cost leadership strategy that in line with the

low cost structure that will at the same time build up the company’s price competitiveness. As

well as doing aggressive market penetration, Estee Lauder should also do aggressive market

development where Estee Lauder went out and proactively introduce present products in new

geographic areas or finding new market segments for present products. Estee Lauder should

expand its operations and penetrates new markets as well as penetrates deeper into the existing

market environment to compete more efficiently in the market. Furthermore, within the intensive

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strategy also include the development of products which will increase the quality of products

through research and development activities throughout the businesses itself that covers not only

the products but also other aspects such as customer services, human resource management, and

how to create strong online presence.

The intensive strategy consist of market penetration, market development, and product

development that will cover most of the critical success factors listed in the CPM which Estee

Lauder did not scores well. This strategy can greatly help the company to efficiently compete

within the industry as well as increasing and upgrading the condition of the company in the long

run.

5.2.1.1 Market Penetration

The rating for market share factor of Estee Lauder is relatively low even though it is the

same rating with the biggest competitor in the market, P&G. in order to increase market share of

the company, Estee Lauder must improvise strategy to further penetrate market around the globe

both for developing and for emerging new market available. Estee Lauder should apply proactive

measures in obtaining market share as well as to rob the market share of other competitors. To

increase market share effectively, the company should utilize strategy to push present products in

present markets as well as emerging markets through greater marketing efforts such as

advertising methods, price leadership strategy, low price structure and with the help of

technological revolution; the internet. Through market penetration, company can effectively

increase its market share and at the same time can also try to steal the market share of other

competitors for the sake of the company and also for the sake of competitive advantage.

5.2.1.2 Market Development

Market development is done through expanding the products offerings to foreign nation

especially developing and emerging markets all around the world. The aim is to bring the present

products to a new market environment. This strategy may be hard to exercise but Estee Lauder

has over 9000 products under 28 different brands altogether which gave Estee Lauder some kind

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of flexibility in penetrating new geography area to market its products in. Each product has its

own unique characteristics in aspects such as price which is very important when doing

penetration of market especially to new markets where the population’s purchasing power is still

unknown. The price range that Estee Lauder has to offer can also be very helpful in easing

market development to new geographical market and new market segments within the industry.

5.2.1.3 Product Development

Another strategy to improve the critical success factor for Estee Lauder is through the

implementation of product development. Product development concerns mainly on the marketed

product itself which is to increase the number of sales for a particular product by improving the

condition and criteria of the product. With facilities in almost every continent on the globe, as

well as more than 450 scientists working for Estee Lauder, product development can be done in a

more efficient way to ensure ultimate satisfaction of customers. Besides doing improvements on

existing products, product development also include developing new products for distribution.

The suitability of a product towards certain conditions is varied in many ways. Some products

may be suitable for women but not men, but some might be suitable for both. Therefore

depending on certain conditions, to increase market share and other significant success factor,

Estee Lauder should consider revising its strategy towards a more suitable strategy to utilize in

ensuring its survival in the harsh and fierce competition of the cosmetics industry.

6.0 EXTERNAL FACTOR EVALUATION

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EXTERNAL FACTOR EVALUATION

Opportunities Weight Rating Weighted

Score

Rising demand from developing and emerging markets where in

the next 20 years there will be more than 70 million working

population across the globe will reach an income level that

allows purchasing of cosmetics products

0.05 4 0.2

The whole continent of Africa is coming online 0.05 4 0.2

Global women’s’ purchasing power is expected to increase by 5

trillion by 2015

0.07 3 0.21

By the year 2030, Americans over the age of 65 will represent

one-fifth of the population

0.1 3 0.3

Younger customers age 20 to 30 years old are choosing to

invest their money into preventive cosmetics to battle the effects

of aging.

0.08 3 0.24

By the next 40 years, the world’s aging population will multiply

by 2.5 times representing over 33% of the total population.

0.1 3 0.3

Life expectancy for the aging population will continue to

improve

0.1 3 0.3

Green products appear to be maintaining their position in the

economy struggle and these “natural” and “organic” products

appear to be favorably received by consumers.

0.05 2 0.1

Threats

High unemployment where the increase levels of job insecurity 0.03 4 0.12

The rising of energy prices 0.05 2 0.1

Regulations by U.S Department of Agriculture under the

Standards of the National Organic Program (NOP) which states

that 95% of the products’ contents must be organic and this

regulations also extends to the manufacturing processes.

0.07 2 0.14

Aggressive competition by the competitors that are targeting the 0.07 3 0.21

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same market segment

Change of Consumers’ spending pattern of luxury goods 0.03 4 0.12

Competitive pricing of other similar effect or substitute

products

0.05 3 0.15

Internet security threat on its e-commerce application 0.02 4 0.08

Foreign currency fluctuations 0.03 4 0.12

Changes in laws, regulations, and policies 0.05 2 0.1

Total 1 - 2.99

The weight value is the value that represents the level of influence a factor has ranging

from not important/no influence (0.0) to most important or most influential (1.0) and the total

weight value is 1.0. The rate factor represents the rating that indicates how effective the firm’s

current strategies respond towards the factor. The rating range from 1 being the response is poor,

2 for the response is below average, 3 for the response is above average, and 4 represents the

response is superior. Estee Lauder scored 2.99 on the weighted score which is above average

score of 2.5 and indicates that even though not very well managed and responded upon, Estee

Lauder still is doing considerably good in responding towards all the opportunities and threats

that appears in front of it. Based on the External Factor Evaluation (EFE) there are numbers of

strategies that Estee Lauder can use to efficiently response towards both threats and

opportunities. Most of the proposed strategies are similar with the strategies proposed in the

SWOT strategies.

6.1 Go Green

One effective strategy to battle out all the changes of regulations and regulations made

regarding the use of harmful chemicals and the use of animal for test subject in the cosmetic

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industry is by turning to use natural and organic materials including within the manufacturing

processes of products. The company will undergo if not 100% or maybe at minimum 50%

changes in aspects covering manufacturing all products and the usage of materials and resources

to produce cosmetics products. This changes will greatly costs the company but is the most

effective in fighting off such threats from ever arises again. To do that, the company has over

400 scientists working research and development and based on the company’s financial ratio the

company has excess money to spend for the business. From this point of view, the most

beneficial way of spending that excess money is by spending it for processes to turn the company

into a green company which will completely eliminate the threats coming from animals and

natures activists around the world as well as avoid any problems that can arises from regulations

concerning usage of chemicals and animals for the products. There are over 400 scientists can be

utilize to find solutions to produce products that are more nature friendly.

6.2 Cost Leadership Strategy

In this particular industry segment, the competition is relatively stiff and fearsome.

Especially from big companies such as P&G, Colgate-Palmolive, Avon, L’Oreal, Revlon, and

other companies competing within the same market segment. These competitors has their own

unique capabilities such as huge workforce, brand loyalty, superior advertising strategy, larger

market share, and etcetera but what Estee Lauder can use to fight of all these threats is by being a

cost leader among all the competitors. Estee Lauder can start a on price-based war to compete

against other competitors. Cost leadership strategy will help to retain customers while at the

same time avoid any unwanted changes in buying trends among customers. Also through price

leadership strategy, Estee Lauder can also fight off the threats of competitive pricing done by

other companies that produce similar effects or substitute products such as Wal-Mart which is

popular and renowned by its low price products. Estee Lauder can also battle the high

unemployment where levels of job insecurity among the working population will decrease

purchasing power. There will be no need for superior purchasing power with the low price

offered by Estee Lauder and everybody will be able to buy the products with little purchasing

power as well as increasing number of sales for the company in the long run.

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6.3 Expand Product Offerings

To tackle the opportunities that arise from developing and emerging markets in the next

20 years, Estee Lauder should consider to fully utilize their capabilities in reaching customers by

expanding more and more products to foreign nations. By expanding their products, Estee

Lauder would not just increase market share but can also diminish other significant threats such

as high unemployment rates, pricing competitiveness, and other threats that can ruin the

opportunities for Estee Lauder to move further ahead.The company has consistent brand imagery

around the world using celebrities as endorsers in testimonial advertising for commercials as

well as in magazines. Estee Lauder also has already conquered most of the globe by utilizing 28

brands with over 9000 products and the process to penetrate a new market environment would

not be much of a problem to the company. Additionally, Estee Lauder has its own pricing

strategy which not only offers prestige price for selected market levels but also varied price

range from low range to high range that can be used to target and ease penetration into new

market environment. The reason to expand their products will also accommodate the rising of the

world’s aging population, the rising of women’s purchasing power within the next ten years, and

the improving life expectancy of aged populations.

7.0 STRENGTHS

1. Named one of 10 outstanding Women in Business in the United States which contributed

largely towards the brand-building of the company

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2. Estee Lauder has 28 brands and markets over 9000 products worldwide

3. Average annual revenues of more than 7.8 billion

4. Estee Lauder owns manufacturing facilities, research and development facilities, and

businesses offices on nearly every continent on the world. It consists of 13 manufacturing

facilities, 475 scientists working the Research & Development (R&D) facilities, and 43

business offices worldwide.

5. Manufacturing operations are certified by an independent party to conform to the ISO

14001 Standards.

6. Estee Lauder provides customer service and open dialogue on behalf of the company and

its brands offering services and individualized attention to customers via websites, toll-

free phone, and 6 global customer care centers.

7. Estee Lauder was the first major prestige cosmetics firm that offer shopping via internet.

8. Estee Lauder was the first company to offer free samples and gift-with-purchase plans

and still continues those plans up until today

9. Estee Lauder has consistent brand imagery around the world using celebrities as

endorsers in testimonial advertising for commercials on television as well as in

magazines

10. Estee Lauder offers prestige price strategy as well as varied price range for particular

products that come in low range up to high range prices which targeted various levels of

customers to ease penetration towards certain conditions of economy.

11. Sell products to the globe covering over 150 countries worldwide.

8.0 WEAKNESSES

1. Most of the power of the company is vested on family members

2. The company has no written mission statement

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3. Estee Lauder has small number of employees working worldwide than most of its top

competitors in the industry.

4. Estee Lauder has lower revenues and net incomes than its top competitors such as Avon,

P&G, Colgate-Palmolive, and L’Oreal.

5. Operating income for fragrance segment dropped 43% to 26.3 million.

6. Almost 45% of total sales for Estee Lauder are generated solely from the U.S market

alone.

7. During discount time, most retailers will ask for higher discount.

8. Estee Lauder spends less money on global scale advertising than most of its top

competitors

9. Avon has over 5 million independent sales representative and is the world’s largest direct

seller of personal products primarily cosmetics which is in line with Estee Lauder’s range

of products.

10. Concentrated on a single international image

9.0 INTERNAL FACTOR EVALUATION

INTERNAL FACTOR EVALUATION

Strengths Weight Rating Weighted

Score

Named one of 10 outstanding Women in Business in the

United States

0.05 4 0.2

Estee Lauder has 28 brands and markets over 9000 products

worldwide

0.08 4 0.32

Average annual revenues of more than 7.8 billion 0.02 3 0.06

Estee Lauder owns manufacturing facilities, research and

development facilities, and businesses offices on nearly every

continent on the world.

0.05 3 0.15

Manufacturing operations are certified by an independent party

to conform to the ISO 14001 Standards.

0.05 4 0.2

Estee Lauder provides customer service and open dialogue on 0.1 4 0.4

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behalf of the company and its brands offering services and

individualized attention to customers via websites, toll-free

phone, and 6 global customer care centers.

Estee Lauder was the first major prestige cosmetics firm that

offer shopping via internet.

0.04 4 0.16

Estee Lauder was the first company to offer free samples and

gift-with-purchase plans and still continues those plans up until

today

0.04 3 0.12

Estee Lauder has consistent brand imagery around the world

using celebrities as endorsers in testimonial advertising for

commercials on television as well as in magazines

0.02 3 0.06

Estee Lauder offers prestige price strategy as well as varied

price range for particular products that come in low range up to

high range prices

0.05 4 0.2

Sell products to the globe covering over 150 countries

worldwide

0.08 4 0.32

Weaknesses

Most of the power of the company is vested on family

members

0.01 2 0.02

The company has no written mission statement 0.01 2 0.02

Estee Lauder has small number of employees working

worldwide than most of its top competitors in the industry.

0.07 1 0.07

Estee Lauder has lower revenues and net incomes than its top

competitors such as Avon, P&G, Colgate-Palmolive, and

L’Oreal

0.03 2 0.06

Operating income for fragrance segment dropped 43% to 26.3

million

0.03 2 0.06

Almost 45% of total sales for Estee Lauder are generated

solely from the U.S market alone.

0.03 2 0.06

During discount time, most retailers will ask for higher

discount

0.05 2 0.1

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Estee Lauder spends less money on global scale advertising

than most of its top competitors

0.1 1 0.1

Avon has over 5 million independent sales representative and

is the world’s largest direct seller of personal products

primarily cosmetics which is in line with Estee Lauder’s range

of products.

0.05 1 0.05

Concentrated on a single international image 0.04 1 0.04

Total 1 - 2.77

The weight for each factor represents the significance of the factors that range from low

importance (0.0) to high importance (1.0). In the table above, the higher the weight for the factor,

the more critical the factor is towards success of the company. The ratings range from 4 to 1

where 4 represent major strength, 3 for minor strength, 2 for minor weakness, and 1 for major

weakness. Each company receives a score on each factor and the total score is simply the sum of

individual score for each company. Company that receives higher score is relatively stronger

than its competitor. Estee Lauder scored 2.77 on the weighted score of IFE which is just above

average score that indicates even Estee Lauder is still doing pretty well instead of having several

major weaknesses within the company itself. Through the IFE, Estee Lauder can revise several

advisable strategies recommended and most of these strategies are similar with the SWOT

strategies.

9.1 Expand Product and Market

Operating income for fragrance segment dropped 43% to 26.3 million and at the same

time almost 45% of total sales for Estee Lauder are generated solely from the U.S market alone.

Furthermore, Estee Lauder has lower revenues and net income than its top competitors such as

Avon, P&G, Colgate-Palmolive, and L’Oreal. In order to overcome these weaknesses, what

Estee Lauder Should do is to expand its market share as well as expanding its present products to

other market segment which the company has not ventured in yet. Those markets may be in the

existing and developing market or new emerging market where by doing so will help to increase

number of sales for the company which will result in increase revenues and net income. By

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expanding the product distributions to other foreign nations, Estee Lauder will also lowers the

risk of losses if the US dollars arise as almost half percent of revenues generated came from the

US market alone. By distributing the percentage of revenues generated, Estee Lauder also at the

same time distributed the risk associated with each particular country or market segment. Estee

Lauder owns over 9000 products under different brands distributed in more than 150 countries

which give the company the edge to penetrate other market with ease. Estee Lauder is also

considerably strong in terms of online presence which will also enhance the company’s

capability to penetrate other market on the globe that is separated geographically.

9.2 Diversify Marketing Approach

Another strategy to effectively utilize the strengths of the company to diminish the

weaknesses is by diversifying the company’s marketing approach. Estee Lauder has already

acquire a considerably strong brand name around the globe with over 150 countries where its

products are distributed. Additionally, Estee Lauder also pioneered the approach off marketing

that offers its customers free samples and gift-with-purchase plans that still in use until today. To

better accommodate this strategy, Estee Lauder should increase the number of employees

working for the company to enable diversification of marketing approach can be done efficiently.

An example can be seen in P&G company with 127000 workers worldwide which is the top

competitor for Estee Lauder with annual revenues up to 70 billion and net income nearly 20

billion a year. Theoretically the larger the workforce the larger will the revenues be as large

number of workers indicates large number of person actually working the field trying to increase

market share as well as closing sales. Even so, that theory may not be right as Avon with only

100 countries where its products are distributed can also generate a high value of revenues per

annum and managed to be crowned as the world largest direct seller firm. This is a two good

example to be taken as consideration where Estee Lauder has the expenses to do so, and has the

ability to do so as there are facilities of the company in almost every continent in the world

which will accommodate for the strategy of Estee Lauder to mimic the way Avon do its sales

around the world. Marketing approach can also be diversified by focusing on global scale

advertising and creating numbers of international brand imagery instead of relying to only one

brand imagery.

19

10.0 FINANCIAL RATIO ANALYSIS

10.1 Profitability

2010 2009

Gross Profit Margin 76.53% 74.31%

Net Profit Margin 6.14% 2.98%

Return on Assets 8.96% 4.22%

Return on Equity 24.34% 13.13%

Based on the profitability ratio, the company has good performance in 2010 compared to

2009 because the GPM, NPM, ROA and ROE has increased from 74.31% - 76.53%, 2.98% -

6.14%, 4.22% - 8.96% and 13.13% - 24.34% respectively. This indicates that the company is

efficient in generating their sales and able to gain profits. Furthermore, they are able to manage

their cost of goods sold. This shows that for year 2010, the company has been performing very

well than the previous year as well as proving the company owns the financial resources to

continue its constituents in the future.

10.2 Liquidity

2010 2009

Current Ratio 1.98 times 1.99 times

Quick Ratio 1.18 times 1.17 times

Inventory to Net Working Capital $1548.8 $1453.3

The current ratio dropped from 1.99 times to 1.98 times in 2010 but still indicates a value

that is sufficient for the company where the company actually has excess cash that can be used to

spend or invest elsewhere in the business and can also indicates that the company has too many

inventory. Even though the value dropped, the company still has a significantly high value of

ratio that put the company being able to fulfill their short term obligations with short term assets

as well guaranteeing basic matters such as salaries, bills, and expenses on time. The quick ration

20

shows increase from 1.17 times to 1.18 times in 2010. The value of quick ratio showed in the

table indicates that the firm has enough short-term assets to cover its immediate liabilities

without having to sell any inventories. Lastly the Inventory to Net Working Capital or working

Capital shows increase from 1453.3 million to 1548.8 million in 2010 which indicates that the

company posses the ability to survive in bad times where the downturn may cause significant

impact towards the financial status of the company.

10.3 Leverage

2010 2009

Debt-to-Assets 0.23 0.27

Debt-to-Equity 0.63 0.85

The leverage ratio shows decease in all ratios from 2009 to 2010. The debt to assets ratio

dropped from 0.27 to 0.23 which indicates that the assets of business being financed by debt for

27 % in 2009 had decrease to 23 %. This showed a good sign that the company does not

necessarily rely on debts to finance its assets based on the decrease percentage of assets being

financed by debt from year 2009 to 2010. The debt to equity ratio also dropped from 0.85 to 0.63

which indicates less risk and very favorable for the company. Lower value of debt to equity ratio

indicates that the company does not rely on external lenders that will put it on higher risks

especially in higher interest rates. The value of 0.85 to 0.63 indicates that more and more assets

of the business are financed by the company itself and not by shareholders’ equity which at the

same time also tells that the percentage of assets of business which are financed by the company

instead of by the debts is increasing.

10.4 Activity

2010 2009

Inventory turnover margin 2.21 times 2.37 times

Fixed-asset turnover 0.47 0.21

Average collection period 35 days 43 days

21

The inventory turnover margin showed decrease from 2.37 times to 2.21 times in 2010

which indicates that the company were not so efficient in turning its inventory to generate profit

for the company. However, the fixed asset turnover showed increase from 0.21 to 0.47 in 2010

which indicates that the company was able to fully utilize its assets to increase productivity. The

average collection period also shown increase from 43 days to 35 days which indicates that the

company were being very efficient in collecting credits from debtor. The company needs to draft

a new strategy or methods in order to efficiently turn their inventories into profit in the future.

10.5 Growth

2010 2009

Sales Growth Rate 6.44 % -7.42 %

Average Annual Growth Rate -0.49 %

The sales growth rate foe Estee Lauder shows negative value of – 7.42% which indicates

that the company actually incurred decrease in sales in 2009 but the company went back up in

2010 with 6.44 % of sales growth rate that indicates that the sales rate of the company had

increased although not very much. Based on the data provided on growth rate ratio, Estee Lauder

actually is slowly increasing its sales rate from year 2009 to 2010. Even so, the average annual

growth rate of the company did not give promising result as the average annual growth rate for

the company is negative in value. The value of – 0.49 % showed that the company is not making

a good progress over the previous year even though the sales growth rate showed otherwise. It

can also be concluded that the increase of sales growth rate did not provide strong impact

towards its average annual growth rate which can be problematic if not given appropriate

consideration.

11.0 SWOT STRATEGIES

11.1 SO Strategies

22

11.1.1 Expand Product Offerings to Foreign Nation

To tackle the opportunities that arise from developing and emerging markets in the next

20 years, Estee Lauder should consider to fully utilize their capabilities in reaching customers by

expanding more and more products to foreign nations. There are estimates of 70 million new

market target for the company to set their anchor on and to effectively tackle the target the

company must give their best especially by giving people the brand imagery of the company

itself. The company has consistent brand imagery around the world using celebrities as endorsers

in testimonial advertising for commercials as well as in magazines. It is best to utilizes that

particular strength and start aiming for celebrities particularly from the developing and emerging

markets to start nurturing peoples’ awareness towards the products that Estee Lauder has to offer

and the benefits they can obtain from buying the products of Estee Lauder. Estee Lauder also has

already conquered most of the globe by utilizing 28 brands with over 9000 products and the

process to penetrate a new market environment would not be much of a problem to the company.

Additionally, Estee Lauder has its own pricing strategy which not only offers prestige price for

selected market levels but also varied price range from low range to high range that can be used

to target and ease penetration into new market environment. Estee Lauder was able to utilize

such pricing strategy is because the company distributes over 9000 products and by having large

number of products to offer benefits the company itself towards the flexibility to adjust prices

than most of its top competitors. The reason to expand their products will also accommodate the

rising of the world’s aging population, the rising of women’s purchasing power within the next

ten years, and the improving life expectancy of aged populations.

11.1.2 Increase capability of online presence in the form of marketing, advertising, and

customer services

Africa is one of the largest continents in the world and in the near future, the continent of

Africa is coming online. This is a really big opportunities for the company to tackle especially

with the company being the first major prestige cosmetics firm that offer shopping via internet.

With the whole continent being online, the company can penetrate the market even deeper and

23

easier while at the same breaking the geographical and technological barrier that has been

blocking the way of marketers to venture to the continent itself. This is supported by the

company having the ability to provide customer services and open dialogue on behalf of the

company and its brands that can offer services as well as individualized attention to customers

via websites. Besides that, whether it is online shopping or maybe normal ways of shopping its

always a good thing and very interesting when they also have free gift for every purchase of

products. Everybody loves free gifts and Estee Lauder has pioneered the industry and

revolutionized single-handedly on the way of doing business by being the first ever company to

provide free samples and gift-with-purchase plans which is still continues up until this moment.

Having a strong online presence will not only affect the future Africa but also the whole market

industry where information can be sent directly and in a very efficient manner which ease both

sellers and buyers in manners that are favorable for both sides.

11.1.3 Increase Development and Production of New Products

The range of cosmetics products does not just used by aged population but also started

receiving attention from younger population aged 20 to 30 years old. These younger customers

are starting to trend towards spending their purchasing money on cosmetics products to battle the

effects of aging. Additionally even teens are starting to turn their attention towards cosmetics

products to battle the effects of aging. This here is a great opportunity and a requirement for the

company to utilize its 475 scientist working for the research and development to develop specific

products to match the requirements for these younger populations. To strengthen the credibility

of the research and development of new products, manufacturing activities were also certified by

an independent party to conform to the ISO 14001 standards. Continuous effort of research and

development can also be done to aim for green products based on “natural” and “organic”

materials which appear to be maintaining its position as favorable to the consumers even in the

times of economic struggle.

11.2 WO Strategies

11.2.1 Increase Numbers of Employees

24

Estee Lauder has relatively small number of workers working worldwide than most of its

top competitors such as L’Oreal, and P&G. For the company to be able to tackle more and more

markets especially developing and emerging markets will technically require large workforce to

work the field. P&G as an example has 127000 workers worldwide working the market field and

theoretically enable them to generate high revenues and net income than its competitors working

the same market industry. Even though the revolution of technology called ‘internet’ has

significantly changed the world of marketing and successfully put down barriers of geography,

the direct approach method where sellers will personally confront customers proved to be more

effective. Avon is the largest direct selling company mainly in cosmetics in the world applied the

same strategy and managed to generate even larger revenue and net income than Estee Lauder

did even with small amount of countries where they sell their products than that of Estee

Lauder’s. Therefore, while focusing on strengthening more and more presence of the company in

the online environment, Estee Lauder should increase its workforce and also give appropriate

focus on working the field directly in the future to be able to compete effectively with its

ferocious competitors who from time to time will try to steal market share from Estee Lauder.

11.2.2 Diversify International Image and Global Advertising

Estee Lauder is concentrated on a single international image and it is time to change that

in order to tackle emerging and developing markets in the future. It is unquestionable that with

distribution to over 150 countries worldwide, the name Estee Lauder is not an alien to many ears

but may be a boring view for many eyes already. People get bored easily and sticking with a

single international image will only make it worse. What the company wants is for its products to

remain prestige for the customers. Especially to existing customers so that the company can

retain brand loyalty therefore requires the company to be much more creative in the way of

sending customers the international image of the company and its products in a way that

represents prestige and excellence without ever make them feel wanting to go for other brand

from other company. To fortify that effort, company must also be prepared to spend significant

amount of money to increase capability of advertising mainly on a global scale. Estee Lauder

25

still lacks a bit of advertising superiority as they spend quite limited of money to do so which can

also limit the impact of the advertisement towards customers.

11.3 ST Strategies

11.3.1 Go Green

The regulations of U.S Department of Agriculture under the standards of the National

Organic Program states that 95% of the products’ contents must be organic and these regulations

also extend to the manufacturing processes of products. Changes in regulations also came from

the increasing activities of different groups voicing their objection towards harmful chemical

ingredients and the use of animal as test subjects in cosmetics products which is also a threat to

the company. To battle these threats, the most effective thing to do is by turning the company

into a green company where all its products will be based on natural and organic materials as

well as the manufacturing processes where the processes will evade usage of harmful chemical

ingredients and the use of animal as a test subject in cosmetic products. To do that, the company

has 0ver 400 scientists working research and development and based on the company’s financial

ratio the company has excess money to spend for the business. From this point of view, the most

beneficial way of spending that excess money is by spending it for processes to turn the company

into a green company which will completely eliminate the threats coming from animals and

natures activists around the world as well as avoid any problems that can arises from regulations

concerning usage of chemicals and animals for the products. the over 400 scientists can be utilize

to find solutions to produce products that are more nature friendly.

11.3.2 Introduce Low Cost Structure

In this particular industry segment, the competition is relatively stiff and fearsome.

Especially from big companies such as P&G, Colgate-Palmolive, Avon, L’Oreal, Revlon, and

other companies competing within the same market segment. These competitors has their own

unique capabilities such as huge workforce, brand loyalty, superior advertising strategy, larger

26

market share, and etcetera but what Estee Lauder can use to fight of all these threats is its

strengths of having more than 9000 products under various brands distributed to more than 150

countries at its disposal. With huge number of products, the company benefits from the

flexibility to control the prices of each products especially products that can substitute each

other. Estee Lauder can start a low cost structure strategy that focus on price-based war to

compete against other competitors. By introducing a low cost structure, not only can the

company competes effectively in the market but also can battle the changing pattern of buying

among consumers to stay loyal to its products through the low cost structure strategy. By

introducing a low cost structure strategy, Estee Lauder can also fight off the threats of

competitive pricing done by other companies that produce similar effects or substitute products

such as Wal-Mart which is popular and renowned by its low price products. By introducing low

cost structure to the customers, Estee Lauder can also battle the high unemployment where levels

of job insecurity among the working population will decrease purchasing power. There will be

no need for superior purchasing power with the low cost structure and everybody will be able to

buy the products with little purchasing power as well as increasing number of sales for the

company in the long run.

11.4 WT Strategies

11.4.1 New Vision and Mission Statement

To be able to compete effectively against the other big fishes in the cosmetics pool of

industry segment, Estee Lauder should draft a new vision and mission statement with a new

clearer corporate structure. Vision and mission keeps the company from being strayed along the

run. Whereby vision is what the company wants to achieve or where the company wants to be

within stated period of time. This will keep the company navigated through all obstacles without

losing the way even in the darkest and harshest conditions. At the same time, the company that

had no written mission statement should do so in the future and develop how are they going to

achieve the stated vision and release it to the public. This can help increase public awareness

towards the company itself as well as giving them a little bit of idea of how the company

operates and what the company wants to achieve in the long run.

27

12.0 GRAND STRATEGY MATRIX

Based on all the matrices done previously and several strategies also had been

recommended according to the result of those matrices and the strategies are as follows:

1. Market Penetration

2. Market Development

3. Product Development

28

RAPID MARKET GROWTH

STRONG COMPETITIVEWEAK COMPETITIVE

SLOW MARKET GROWTH

Quadrant IQuadrant II

Quadrant III Quadrant IV

4. Go Green

5. Cost Leadership Strategy

6. Expand Product Offerings

7. Expand Product and Market

8. Diversify Marketing Approach

9. Expand Product Offerings to Foreign Nation

10. Increase capability of online presence in the form of marketing, advertising, and

customer services

11. Increase Development and Production of New Products

12. Increase Numbers of Employees

13. Diversify International Image and Global Advertising

14. Introduce Low Cost Structure

15. New Vision and Mission Statement

Even though there are 15 overall strategies but all these strategies can be categorized into 1 and

grouped into 3 groups which is market penetration which includes all about increasing market

share as well as diversifying and utilizing greater or more effective marketing efforts, market

development which include all about expanding products to other market segment or other

developing and emerging markets, and product development that includes all about improving

products and developing new products. The groups and its subs are as shown:

Market Penetration

1. Introduce Low Cost Structure

2. Diversify Marketing Approach

3. Cost Leadership Strategy

4. Increase Numbers of Employees

5. Increase capability of online presence in the form of marketing, advertising, and customer

services

6. New Vision and Mission Statement

7. Diversify International Image and Global Advertising

Market Development

29

1. Expand Product Offerings to Foreign Nation

2. Expand Product and Market

3. Expand Product Offerings

Product Development

1. Increase Development and Production of New Products

2. Go Green

All these groups of strategies are categorized into one which is intensive marketing

strategy which is located in Quadrant I of the Grand Strategy Matrix. The intensive marketing

strategy is the most suitable for a highly strong competitive marketing environment and in a

rapid market growth. Therefore the intensive marketing strategy is in the Quadrant I.

13.0 QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)

Market

Penetration

Market

Development

Product

Development

Key Factors W AS TA W AS TAS W AS TAS

30

S

Strengths

Estee Lauder has 28 brands and

markets over 9000 products

worldwide

0.1

8

4 0.72 0.2 4 0.8 0.1

2

4 0.48

Estee Lauder provides customer

service and open dialogue on behalf of

the company and its brands offering

services and individualized attention

to customers via websites, toll-free

phone, and 6 global customer care

centers.

0.2 4 0.8 0.1

8

4 0.72 0.1

5

3 0.45

Sell products to the globe covering

over 150 countries worldwide

0.1

4

3 0.42 0.1

1

3 0.33 0.1 3 0.3

Weaknesses

Estee Lauder spends less money on

global scale advertising than most of

its top competitors

0.1

7

4 0.68 0.2

3

4 0.92 0.2

5

4 1

Estee Lauder has small number of

employees working worldwide than

most of its top competitors in the

industry.

0.2 4 0.8 0.2 4 0.8 0.2

1

4 0.84

Concentrated on a single international

image

0.1

1

3 0.33 0.0

8

2 0.16 0.1

7

3 0.51

Sum Weight 1 1 1

Opportunities

By the year 2030, Americans over the

age of 65 will represent one-fifth of

the population

0.1

8

4 0.72 0.0

4

0 0 0.1

9

4 0.76

Life expectancy for the aging

population will continue to improve

0.1

9

4 0.76 0.2

2

4 0.88 0.1

5

4 0.6

31

By the next 40 years, the world’s

aging population will multiply by 2.5

times representing over 33% of the

total population.

0.2

2

4 0.88 0.2

5

4 1 0.1

8

4 0.72

Threats

Aggressive competition by the

competitors that are targeting the same

market segment

0.2 4 0.8 0.2

2

4 0.88 0.1

7

4 0.68

Regulations by U.S Department of

Agriculture under the Standards of the

National Organic Program (NOP)

which states that 95% of the products’

contents must be organic and this

regulations also extends to the

manufacturing processes.

0.0

1

3 0.03 0.0

7

0 0 0.1

4

4 0.56

Competitive pricing of other similar

effect or substitute products

0.2 4 0.8 0.2 4 0.8 0.1

7

4 0.68

Sum Weight 1 1 1

SUM TOTAL ATTRACTIVENESS SCORE 7.74 > 7.29 < 7.58

W= Weight AS= Attractive Score TAS= Total Attractive Score

Attractive Score:

0= Not Relevant

1= Not Acceptable

2= Possibly Acceptable

3= Probably Acceptable

4= Most Acceptable

Based on the result of QSPM, market penetration shown to have larger value than the

other two strategies with 7.74 beating 7.58 for product development, and 7.29 for market

development. This shows that the best strategy to utilize for Estee Lauder is by using market

penetration as its main strategy to effectively strive in the market as well as competing among

32

other companies. Market penetration is mainly a strategy for a company to increase its market

share with its present products in its present market through greater marketing efforts. Within the

market penetration strategy consists of several strategies suggested earlier in the matrices done

and all the strategies had been grouped together as these strategies shares common attributes

which is to increase marketing efforts as well as increasing market share in the company’s

present market using its present products. As already known, Estee Lauder had already been a

major company with 28 brands and over 9000 products being distributed and marketed in over

150 countries worldwide which is the most countries involved in its operations than its top

competitors in the industry. With over 9000 products marketed, developing new products is

hardly an idea as these 9000 products cover wide variety range of customers with wide variety of

income level, alongside covering wide variety of unique characteristics. Therefore having more

than 9000 for the moment is considered as more than enough to help the company to move

forward. Even though having the most countries involved in its operations, Estee Lauder still

couldn’t match the revenues that companies such as Avon whose countries involved were only

100 in total. What the company needs right now is to continue marketing its present products and

strengthening its position within existing market. With huge numbers of market Estee Lauder

already ventured in, the main thing to do is to win the market share over from its competitors and

to do so by using the present products, Estee Lauder will need diversified, creative, innovative,

and effective way of marketing.

The first strategy is by introducing low cost structure to the customers. What driven most

customers is price. Price can bring huge impact towards customers’ point of view and interest

towards a particular product. Low cost structure can help company to reduce costs relative in

manufacturing and producing products thus will at the same time reduce the products’ price. By

doing so, company can also benefit by supporting the low cost strategy with a powerful cost

leadership strategy. Being a leader in cost and a leader in range of products as well as variety of

products can definitely contribute towards significant increase of competitive advantage. Estee

Lauder has more than 9000 products but not all of them require low cost structure as some of

them can still remain within the prestige price strategy. This strategy is just for introductory

phase where customers are nurtured towards brand loyalty. Cost leadership strategy is a good

strategy when facing formidable competitors such as Avon and P&G. Estee Lauder will initiate a

33

price war amongst all competitors and pulling them into the axis forcing them to reduce their

prices as well hoping that the reduced price will have significant negative impact towards the

financial status of the competitors that will result in them having to pull away from the market

leaving Estee Lauder with all the market share left behind. This is a long-term strategy that will

took some time for it to take effect but if utilized properly, the wait may be very lucrative.

Another way to increase market share is by increasing the number of employees working

for the company throughout the globe. More workers mean more ground can be covered and thus

more market share can be obtained. The number of employees can represents the capability of

the company in terms of doing job that are more suitable and effective done by humans rather

than done by machines like doing a direct approach sales where personnel will personally

approach potential customers to directly engage in selling activities. Just as done by Avon who is

the largest direct seller firm in the world. How does Avon done it? Of course by utilizing as

much workforce as they can to mobilize sales from a customer to a customer. Meeting a

customer directly and personally can help to build stronger trust of the customer towards the

specific brands of products which at the same time will greatly increase their sense of brand

loyalty because they feel appreciated. Workers can also be mobilize to done customer service

operations where instead of having the customer come to the nearest branch, have the personnel

to personally come to their home and consult the problems directly. A customer that feels

appreciated will never change their loyalty to other brand even if the other brand is much

cheaper. This is exactly a way of doing marketing by utilizing the full capability of human

workforce.

Estee Lauder should also instead of spending money on new development of product or

expanding further to unknown markets with unknown level of risks involved, spend adequate

amount of money on diversifying and upgrading the marketing approach mainly regarding

advertising of products to customers. Marketing approach must be creative and innovative to be

able to capture the heart of customers. One interesting method which the founder of the company

uses to revolutionize the cosmetic industry is by giving free samples and gift-with-purchase

plans and up until today this plan is still continuously used to every Estee Lauder’s customers

worldwide. Marketing approach is not just hiring celebrities and asks them to say that they used

34

the products to look like how they look. Everybody knows that’s a big fat lie. They always wear

makeup before shooting which does not indicates that they used the product for real. Use a far

more effective and money saving method such as maybe doing booth in packed shopping malls,

conducting real life challenges to customers using the products that they will get a significant

results or their money will be given back. This type of marketing may sound old but it’s a direct

approach and most of the direct approach marketing wins the most heart of customers rather than

televisions, radio, or magazines. Even so, online marketing method should not be forgotten too.

Direct approach may be the best way to initiate sales but there are also significant populations of

customers that do their shopping via internet. This population has the highest probability to

spread the words of positive reviews if the particular products works on the. Usually the spread

of rumors were done in the form of facebook, twitter, and many other social media on the

internet.

14.0 CONCLUSION

Based on all the analysis done through the application of several matrices and

management tools, it can be concluded that the most preferable strategy for Estee Lauder to

utilize for future improvement is the market penetration strategy that involves the company

doing extraneous effort which focus in the company increasing its market share within its

existing market using its present products. The market penetration also highlights the company to

dedicate more efforts towards diversifying its marketing approach in more creative and

innovative way also through its already exist market and present products with no consideration

whatsoever towards expanding its market to foreign or emerging markets, or regarding its

products as well as putting aside ideas to develop new products. Within the market penetration

strategy consists several sub strategies that focus towards increasing the company’s market share

as well as concerns about diversifying market approach and strengthening existing approach for

better and efficient utilization.

Based on the result from all the analysis showed that the company needed to utilize

market penetration strategy, there is still no confirmation of whether the strategy itself will be

beneficial towards the company. All the analysis done previously is mainly based on intuitive

supported by analytical reasoning to come up with the most preferable strategy to apply. In the

35

real world, there are no definite strategies that can be guaranteed to provide companies with what

they need in order to survive in the market. All the factors involve in this analysis is just a small

part of huge variety of influential factors that were not included in this analysis that can bring

upon more highly significant impact. To achieve ultimate strategy, companies must be able to

harness all the factors involve in the processes in a more holistic manner which is nearly

impossible to be done in a short period of time. Therefore the answer to what problems Estee

Lauder have particularly in this case analysis can be highly subjective and the utilization of only

these analyses may not be able to fully fulfill the interest of the company itself but its better than

nothing.

36