Strategic Choices Available for Lush Cosmetics - Case Study Example

• Table of Contents

Contents

Table of Contents2

Introduction3

Strategic Choices available for Lush Cosmetics4

The Ansoff Matrix Analysis4

Market Penetration4

Market Segmentation4

Market Targeting6

Market Positioning10

A Recommendation on the Implementation of the Strategic Choices Proposed for the Lush Cosmetics Company11

Conclusion14

Reflective Statement14

Reference List15

Corporate Strategy

• Introduction

Many cosmetic companies across the world have taken a new approach to their corporate strategy development in order to improve their corporate social responsibility. Due to globalization, the cosmetics industry has realized great developments as a result of diversification in ideas. The Lush cosmetics company is among the rapidly developing companies in the cosmetics business with great market occupancy across several countries with the main base being in the United Kingdom. The company has seen great success over the past decades, with the success being attuned to the visualization of the available opportunities and utilization of great market strategies that are essential for a successful business. The corporate strategy and finance of an organization are useful characteristics in determining the strategic position of the company in the market.

In addition to its unique marketing strategies, the Lush cosmetics company emphasizes the use of fresh natural products as ingredients for the production of their goods. Despite the great strategic position that the company takes pride in, it is evident that there are a number of strategic choices that the organization needs to make in order to greatly improve their sustainable competitive advantage and occupy great market space in the increasingly competitive business of cosmetics where companies are looking into new dimensions to improve their products and increase the customer bases. As such, the following report analyzes the strategic choices that are available for Lush Cosmetics and provides a recommendation on how to implement the available strategies. In addition, the report encompasses a reflection of the challenges encountered in the study on one of the most successful Cosmetics companies in the United Kingdom.

• Strategic Choices available for Lush Cosmetics
  • The Ansoff Matrix Analysis
  • Market Penetration

The Lush cosmetics company can expand its penetration into wider markets through product diversification in order to reach a wider market base. Additionally, the company can increase and strengthen the penetration of its markets through the use of joint ventures and partnerships with other organizations such as football clubs and television shows in order to reach a wider market as such collaborations increase the awareness of the company. A good partnership would be the venture with the football leagues such as the English Premier league. In addition, the company can improve its CRS through taking up charity roles which will enlighten more people about the company.

• • Market Segmentation

Market segmentation is a representation of the several divisions of the market of a company. Dividing the market into segments can enable the company to increase its overall sales and therefore increase income in return. In view of the Lush Cosmetics Company, the company has distributed its markets geographically across over 30 countries around the globe. Despite this acclaimed distribution of the market across several countries, it is not enough to earn the global market sales. Therefore, the company should creatively strategize on increasing its market occupancy by increasing the number of sale stations into more countries, unlike the existing situation. Argued, on the basis of increased globalization, many people around the globe would want to increase their consumption of beauty products. This makes the marketability of beauty products be increased and therefore the expansion of the geographic market segment will earn the company more sales that imply increased income (Soat, 2013).

Furthermore, different people have different preferences for cosmetic products and therefore this implies that through the expansion of the geographic market segment, Lush Cosmetics can reach to a wide number of consumers who prefer to use their products but the products are not present in their countries, so they are forced to import them from other countries which prove to be costly for their expenditure. This signifies the importance of establishing more branches in potential market countries to increase their overall sales (Soat, 2013).

The Lush cosmetics company targets mostly the middle-aged females as their potential consumers, yet most of their competition targets different gender groups and has no age restriction for their products. This shallow segmentation of their market reduces the consumption capacity of their products which earns them relatively fewer sales than their competition who record high consumption of their commodities by different genders and ages. In order to keep pace with the increasing competition in the market and business of cosmetics, there is need for the company to segment its market to accommodate the beauty product needs for people of all genders and ages as this will enable the company to register an increment in income through high sales with no specifications or with different products that are suitable for people of different ages and genders. The high rising competition means that only companies which are competent in the market can survive, and this competency requires for the company to view the market from all the likely possible useful angles that can surpass the competition and therefore develop its market to be greater than that of the competition (Hicks, 2011).

• • Market Targeting

Establishment of good targets by a business is one of the essential characteristics for development. Market targeting is, therefore, the focus of business to a specific target group or groups that are the most potential elements of success in the business. The cosmetics industry is one of the most diversified industries with differences in consumer choice and preference, and therefore, it is the mandate of the specific company or organization to make good choices with regard to the target groups in the market. The Lush cosmetics company is among the fast developing organizations in the cosmetics business with a well-established market target. Despite the development that the company has registered, it is significantly paramount that the company improves its market targeting in order to increase its market scope. In order to achieve this important targeting in marketing, the company has to improve its products in order to earn more consumers (Hancock, Ockleford & Windridge, 2009).

Market targeting can be enhanced through diversification of the company’s products in order to increase the production capacity and produce different products that are suitable for different consumption needs by different consumers in order to target the market from different consumer types in the market. The cosmetics market has a wide range of consumers, with the market having different income groups as well as age groups that prefer or are suitable for consuming different types of products (Hamouda, 2012). As such, the Lush cosmetics company needs to diversify its products by producing different types of products that can be afforded either by the wealthy, less fortunate, women, males and different gender groups. This will be labeled with different pricings with the poor having relatively lower prices that are compensated through high pricing of the products for the wealthy. In addition, diversification of their products can be enhanced by producing cosmetics for curing different medical and health conditions that require the use of natural or cosmetic remedies such as fungal and bacterial infections. The company should work in conjunction with the health regulatory bodies and take legal measures in producing such medicinal substances. This product diversification will earn more potential consumers that will, in turn, increase the sales of the company and register more incomes, unlike their competitor.

The corporate social responsibility plays a very important role in a company by marketing the company’s products. The human relations department at Lush has tried through educating the society about their products and offering the necessary assistance when needed. As such, the Lush cosmetics company should improve its corporate department in order to improve its marketability through advertising. The corporate relations in a company determine the image and how consumers perceive the company and its products. Improvement in the corporate relations of the Lush organization will help to create a good positive image of the organization in the market, therefore, earning more consumers who are attracted by the positive persuasion that markets the products to a wide number of consumers through increasing the number of advertisements (Doyle, 2013).

Celebrity endorsement is increasingly being used as a marketing tool due to its proved success and the increasing popularity of celebrities. Lush Cosmetics Company can use this marketing strategy in order to increase their marketability by choosing the right and most popular celebrities that have great influence on people across different geographical destinations. Celebrities are increasingly becoming influential on the lifestyles of the current generation, especially among the youth and adolescents who would like to imitate and mimic the lifestyles of the celebrities in order to achieve the same kinds of popularity. Therefore, the company can make great use of celebrity endorsements in order to achieve the market from the youth and young people who have great passion for the fashion industry and copy the lifestyles of the celebrities that they greatly adore. Because Lush company ventures in beauty and cosmetics, the exploitation of the celebrity endorsements in advertising and marketing will prove to be greatly useful in increasing the market targeting by targeting the youth and the young adults on whom the popular celebrities have great influence on their lifestyles and behavior and therefore this will influence their consumption of the cosmetic products from the Lush Cosmetics company. A good recommendation would be the Hollywood powerhouses such as the Kardashian family who have massive influence (Chan, Berger & Van, 2013).

Arguably, the competition in the cosmetics industry is fast increasing. Many organizations and individuals are increasing the cosmetics business by launching their own makeup lines such as the Victoria cosmetics. This, therefore, calls upon the organizations in this industry to come up with creative ways of increasing marketability. In order to achieve this, it, therefore, calls upon the organizations to develop market strategies that can improve the market scope of the organization. The Lush cosmetics company can enhance their market targeting by standardizing the prices of their products in order to make the easily affordable by a wide range of consumers. High prices scare away the consumption of different products and therefore the company can record significantly low sales. Reducing the prices of the cosmetic products will increase the affordability of the commodities, therefore implying increments in the number of total sales by the company improving its annual incomes in return. Reduction of prices of commodities will create an advantage for the company over its competitors that charge high prices for their cosmetic products, therefore, making more consumers to prefer to choose the products that they can easily afford. This will increase the volume of sales, but the margin will be reduced significantly, and there should be the anticipation for sale increment (Esposito, 2010).

In addition to the above arguments, it can as well be argued that the market targeting of the Lush cosmetics company can be enhanced by developing some product offers. The consumers would prefer to purchase items for which there are some offers provided. They will, therefore, be lured by such offers into purchasing the items that have offers provided on them such as the company coming up with a strategy of providing certain products for purchasing certain items or purchasing products at a cost of over a certain amount. These will encourage the buyers to purchase more in order to receive the prizes and rewards offered for such sales. The sales will, therefore, increase significantly due to increased purchases, therefore, leading to significant increase in the total sales by the company (Kozinets, 2010).

Additionally, the company should launch mobile purchases and embrace free delivery of the online purchases in order to motivate customers who are unable to access the stores due to the limitations of time and other likely constraints to get convenient access to the cosmetic facilities of their desirable choice without necessary their physical presence being acknowledged during the purchases. This time, friendly factor makes the company have an advantage over the competition in terms of effectiveness in delivery and convenience in purchases, therefore, putting into consideration the consumers who cannot get access to the commodities but can conduct online purchases and get the purchased commodities delivered to them by the services of the company workers. The market in the cosmetics industry comprises of a variety of consumers who have different times available at their disposal. Some are workers in professions that require a lot of time at the workplace and therefore cannot get the time to access the beauty products. Introduction and or improvement of online purchases will increase accessibility to the company’s products, and the consumers will, therefore, be motivated by the free deliveries at their door-steps without being charged for the deliveries (Kerpen, 2010).

• • Market Positioning

The positioning of the Lush cosmetics industry is significantly above average in the cosmetics business. To further this placement of the company in the market, it is, therefore, important that the company improves its positioning through a number of ways. First, the Lush cosmetics company can improve its market positioning through the development of a sustainable competitive advantage that will help in distinguishing the brand from other competitors in the market. The brands are increasing in the cosmetics industry, and this, therefore, calls upon the competitive companies to invent new ways that can help them in improving their competency in the market. The company can develop its sustainable competitive advantage through improving its public relations in order to create a good positive image about the company in the outward market environment (Richardson, Gosnay & Carroll, 2010).

The sustainable competitive advantage will increase the marketability of the company because of the development of ways and strategies that create a distinction between the company and the competition that do not have the specific resources and or services that the Lush Cosmetics Company will be offering, thus helping them to sustain their consumers and even acquire new customers who will be lured by the good impressions created by the company’s human resource department that markets the products and services of the company. In addition, the creation of a sustainable competitive advantage will enable the company to earn international acclaim and recognition on the wider international market of cosmetics, therefore make it increase and improve its position in the market and surpass the competition that may be lagging behind in development (Weigel, 2012). The company should as well improve production through embracing technology in order to make the entire process of production and service delivery to be efficient and effective in order to avoid complications and overtaking by their great competitors such as the Body Shop International (Saunders, Lewis & Thornhill, 2009):

• A Recommendation on the Implementation of the Strategic Choices Proposed for the Lush Cosmetics Company

Strategy implementation ensures that the company achieves the purported objectives by following the right course of action in order to achieve the desired strategic outcomes finally. Without proper implementation techniques, the strategies would become useless for the organization, and therefore it can eventually lead to the company being surpassed by their immediate competitors who would be working hard to increase their market occupancy by implementing the right strategic choices for the business. Therefore, the organization needs to implement a good and progressive plan of action that is devoted towards company growth and increasing marketability in the increasingly competitive global environment of cosmetics in which new products and brands are constantly entering the market and competing for the same number of consumers in the marketplace, with great focus on the available resources and distributing them efficiently (Kim & Chung, 2011).

Development of sustainable competitive advantage can be achieved through diversification of its products in order to reach to specific target markets. Technology is fast improving, and therefore companies in the market need to make great use of this globalization for their own advantageous gains through online advertising and advertising through video games and other social platforms that are easily accessible by a wide number of people across the global sphere. The company can as well make use of improved technology in order to increase its levels of production through increasing machine services unlike great reliance on human skills for production (Davis-Bundrage & Kim, 2012).

I would recommend that the company diversifies its products in order for it to achieve the desired market segmentation and increase its global market occupancy. This is the main recommendation because product diversity is the mainframe to market segmentation and market positioning. In addition to diversifying its products, the company should also diversify its markets and increase their distribution across the globe through technological advancement and embracing new methods of production in order comprehend the dynamic markets that are changing and becoming more competitive on a daily basis through the entry of new products and brands as well as improvement in the services and products of the competition which are in a race to increase their sales through increasing their marketability by creating good sustainable competitive advantages (Yan, Hyllegard & Blaesi, 2011).

Furthermore, the company should diversify its markets by increasing door-to-door sales and increase the number of retail stores in order to enable different consumers to get access to and purchase their products from different market types that are convenient with their time schedules and are easily accessible. This can be achieved by increasing the number of sales teams that can conduct door to door sales. Further, improvement in online purchases and increasing the number of online commodities that can be accessed at any convenient time will improve the market positioning of the company in order to comprehend with the competition (Russell & Russell, 2010). I would also recommend that the company reviews its corporate social responsibility in order to educate them on good communication skills that can help sell out the company and its products. The human resources can also be employed to increase volunteer activities. The organization should employ good marketers that can offer convincing information about the products and the company in general and therefore creates a positive image and positive public perception of the company (Hamzaoui & Linton, 2010).

In addition, I would recommend that the company improves its ethics and moral conduct through the improvement of good communications that can adhere to the ethical standards. Setting good ethical standards through good customer communications and responses will boost the profile of the company. Further, the company mainly targets middle-aged females as the potential consumers. It is, therefore, important that the company develops and manufactures cosmetic products that are useful to all ages (Stringer & Astrakianakis, 2013).

The company can develop medicinal cosmetics by correlating with medical facilities that can give guidance on the production of medicinal products through their health expertise and incorporate this with the cosmetic industry can realize skill sharing and encourage innovativeness and creativity in the company in order to come up with improved cosmetics which are not only for beauty but carry a medicinal value that can help cure or prevent certain health infections (Sashi, 2012). The company can partner with other organizations that can offer sponsorships and useful partnerships such as football clubs which can help increase the awareness of the company and its products among a wide range of football fans. Such sponsorships can help to increase the marketability of the company and acquire funds for improved production and development as well as the acquisition of a new market segment who are the male consumers (Wahyuni, 2012).

• Conclusion

To sum up, The Lush Cosmetics Company has a wide variety of corporate strategy choices that it can implement in order for the company to succeed in the increasingly competitive cosmetic industry. Improvement of its market segmentation, targeting and positioning are among the important marketing strategies that will propel the company towards success. Such improvements require good human resource management as well as embracing new technology in order to succeed. Taking up new marketing strategies such as celebrity endorsements will as well increase the popularity of the company and therefore increasing the sales of its products. It is, therefore, sufficient to conclude that a good corporate strategy ensures development in an organization.

• Reflective Statement

The study has taught me the importance of critical study and evaluation of topics through the comparison of literature and other sources in order to stem good argumentative points. The study has provided an educative basis for my future study and analysis of corporate strategies in business through a critical analysis of the Lush Company. In addition, the study and essay have enabled me to perfect my research skills through conducting specific research work that is relevant to the topic of discussion and consultation with peers as useful sources of information about certain critical topics which they might have knowledge of. I have learned that writing about the corporate relations in a company requires persuasive and adequate content that needs to support the theoretical arguments. Collecting information about such a broad concept might prove to be difficult, and therefore, the study has taught me about the importance of teamwork in discussions through making the working easier.

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