Strategic Management (9001SMGT)
Review of Theories and Frameworks
[Company X]
Word count: [2287 words] It’s a 2000-word written
report (+10%). Please
ensure that you conform to
the word limit.
1
Executive summary
This report will investigate Company X’s position in the beauty industry
and strategic management to expose problems restricting its
competitive advantage. Company X is a recognised worldwide beauty
omnichannel that retails luxury beauty products.
The analysis dissects Company X’s vision, mission and values to reveal if
they are effective and support one another. Furthermore, they are
examined against its strategic objectives to see if they are on the same
page and if any implications need to be modified. Company X’s vision,
mission, values and strategic objectives are cohesive and work together
to achieve the same message. However, the mission statement needs to
improve the adjective ‘welcoming’ to ‘captivating’ to represent the
unique, compelling shopping experience Company X offers.
The report utilises three frameworks to examine Company X’s
competitive strategies further. Porter’s Five Forces framework
investigates the pressures and profitability of the beauty industry and
Company X’s environment. The beauty industry is highly competitive
and rapidly growing, creating a rivalry between competition and
constraining power over suppliers and customers. The VRIN test
examines if Company X has a sustainable competitive advantage
compared to its rivals. Company X’s competitive advantage is average,
as most of its resources and capabilities can be imitated and
substituted. The SWOT analysis examines Company X’s internal
strengths and weaknesses, external environment opportunities and
threats to uncover how they affect the business. Company X is an
established brand which is an advantage; however, its competition has
been able to be on par, if not surpass, what they offer. Company X has
opportunities in technological advances, expanding the men’s category
and training beauty advisors.
An executive summary should
summarise the key points of the
report. It should state the
purpose of the report, highlight
the major points, and describe
any results, conclusions, or
recommendations from the
report. Your executive summary
included most of the necessary
elements and was clear, succinct,
and well-written.
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This report summarises the crucial strategic issues uncovered from the
analysis that Company X must correct. Company X must have the same
technology that the American stores have, increase the number of
brands targeted to men and offer click-and-collect across all stores in
Australia. Rectifying these strategic issues will improve Company X’s
competitive advantage in the beauty industry, expand market share and
become closer to being the most loved beauty community.
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Table of Contents
Executive summary…………………………………………………………………………1
1 Introduction…………………………………………………………………………….5
2 Organisation and industry context……………………………………………..5
3 Strategic vision, mission, values and objectives……………………………6
3.1 Vision ……………………………………………………………………………..7
3.2 Mission……………………………………………………………………………8
3.3 Values……………………………………………………………………………..9
3.4 Strategic objectives…………………………………………………………10
4 Porter’s Five Forces framework ……………………………………………….11
4.1 Rivalry among competing sellers………………………………………13
4.2 Threat of potential new entrants ……………………………………..14
4.3 Threat of substitute products…………………………………………..14
4.4 Supplier bargaining power……………………………………………….14
4.5 Buyer/customer bargaining power …………………………………..15
5 VRIN test……………………………………………………………………………….15
5.1 Brand presence………………………………………………………………15
5.2 Beauty products……………………………………………………………..16
5.3 Beauty advisors………………………………………………………………16
5.4 Research and development……………………………………………..16
6 SWOT analysis ……………………………………………………………………….16
6.1 Strengths……………………………………………………………………….17
6.2 Weaknesses …………………………………………………………………..18
6.3 Opportunities…………………………………………………………………18
6.4 Threats ………………………………………………………………………….18
7 Company X’s critical strategic issues…………………………………………19
Well-structured table of
contents with consistent
use of a capital letter for
the first word (only) of
headings and sub-headings.
Microsoft Word has been
used to generate this table.
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8 Conclusion …………………………………………………………………………….20
References …………………………………………………………………………………..21
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1 Introduction
This report will analyse Company X’s competitive situation to uncover
strategic issues and priorities that management must re-examine.
Company X is a famous international omnichannel beauty retailer that
sells high-quality luxury products. The report will give a brief
introduction to the context of the business and beauty industry.
Company X’s mission, vision and values are analysed against its strategic
objectives to uncover any implications and provide recommendations to
improve them.
The analysis employs three frameworks to investigate Company X’s
competitive position. Porter’s Five Forces framework investigates the
competitive pressures of the beauty industry and Company X’s
competitive environment. The VRIN test examines the sustainable
competitive advantage of Company X. The SWOT analysis dissects
Company X’s internal resources and external opportunities and threats
to discover how they impact the business.
The report concludes with the critical strategic issues discovered from
the analysis that Company X must modify to be competitive and
improve its strategic management.
2 Organisation and industry context
Company X was established in France in 1970 by Dominique
Mandonnaud, who pioneered the ‘open-sell environment’, which
encourages customers to test products before purchasing (Company X
2022a). The multinational luxury corporation LVMH Louis Vuitton Moët
Hennessy acquired Company X in 1997 and expanded the stores
globally, with over 2,700 stores in 35 countries worldwide (Loeb 2013;
Company X 2022a). Australia’s first Company X store was launched in
December 2014, with currently 23 stores nationwide (Company X 2022c;
Shopping Centre News 2022). Company X offers a growing variety of
products from carefully chosen brands (Company X 2022a).
Reference is required.
A good introduction sets
the scene for the report.
Here, you have mainly
provided an outline of the
report. A brief discussion
on strategic management
concepts and principles
would enhance the
quality of this section.
The purpose statement
includes the reason for the
analysis, although this
could be more specific.
Implications in regard to
which area or action?
Multiple texts by the same
author in the same year
are distinguished by the
addition of a letter next to
the year. The letter is
determined by the
alphabetical order of the
title.
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Furthermore, Company X offers a seamless digital experience with an
online store and an app.
The Australian beauty market is a 6.9-billion-dollar industry and is
forecasted to increase (IBISWorld 2022a; IBISWorld 2022b). The life
cycle of the brick-and-mortar beauty market is currently in the mature
stage as the beauty industry is oversaturated (IBISWorld 2022a).
However, the life cycle of beauty e-commerce is at the growth stage
(IBISWorld 2022b). Online shopping is rapidly growing in the beauty
market due to the variety of brands and products, discounts, and
especially since the coronavirus pandemic (IBISWorld 2022a).
3 Strategic vision, mission, values and objectives
Company X’s vision, mission, values and strategic objectives align and
centre around attracting beauty consumers and building loyalty. Table 1
displays Company X’s vision, mission values and strategic objectives.
Table 1 – Company X’s strategic vision, mission, values and objectives
Business strategies |
Company X’s strategies |
Vision | “Be the most loved beauty community.” |
Mission | “To create a welcoming beauty shopping experience for all and inspire fearlessness in our community.” |
Good background
information about the
organisation and industry,
which is referenced
appropriately.
A useful table. However, the
headings are not relevant.
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Values | Company X DNA: • Amazing beauty selection: “Company X is all about the widest, largest beauty offer in the world – a dream team of selective and exclusive brands plus the ever-expanding COMPANY X COLLECTION.” • Freedom to experience: “Company X is a beauty playground. A place of freedom to test, try and experiment. A place to discover beauty and to inspire fearlessness. Our customers experience Company X when, where and how they want.” • A fun place to learn: “When you step inside Company X you enter an extraordinary world, a place where your heart beats faster and the possibilities beckon. Company X is a great place to work for our staff—somewhere to learn whilst having fun.” • Disruptive spirit: “Our story is one of trailblazing, taking risks and trying the untried. Company X is bold and audacious, modernising traditional beauty categories, retail models and ways of thinking.” Sub-DNA values: • Beauty & beyond: “Together we inspire our customers, empower people, and help them become the best versions of themselves.” • Creativity unleashed: “We embrace curiosity and innovation to work with diverse customers, teams and leaders.” • Endless evolution: “We are empowered to choose our own path, accelerate our growth, and be our best.” • Boldy authentic: “We celebrate diversity, embrace our unique and winning spirit, and believe that real beauty is being authentically you.” |
Objectives | • The most loved omnichannel in the beauty industry. • Create the most educated beauty advisors. • Incorporating technology advancements in the customer experience to stand out from competitors. *While Company X did not state these objectives, these are the strategies Company X implies throughout its day-to-day business. |
Source: Company X 2022a; Company X 2022b; Company X 2022d.
3.1 Vision
A strategic vision is the company’s long-term direction and aspirations
(Thompson et al. 2022). Company X’s vision succeeds in all the ‘dos’ of
Figure 1. Furthermore, it is a catchy slogan that is easy to remember and
effectively captures Company X’s future (Thompson et al. 2022).
Company X is living out its vision as it has created a community where
beauty consumers can share their love for beauty products in-store and
online. Building interaction between a brand and its customers is key to
Some companies often
publish only a small punchy
slogan, but behind the
slogan they have details of a
variety of issues for
organisational guidance.
The AIB Style Guide,
section 9.3, advises text in
a table should be one size
smaller than the text in the
paragraphs.
Tables and figures should
have a title at the top and
source at the bottom. This
table combines
(synthesizes) information
from different sources and
should be formatted in line
with the AIB Style Guide.
Source: Developed by
Student 2022 (Company
X2022a; Company X
2022b)
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building loyalty and a community (Wang, Chan & Yang 2013). Company
X strives to be the first choice for beauty consumers, and one of the
ways they aim to do this is through their mission.
Figure 1 – The dos of wording a vision statement
Source: Thompson et al. 2022
3.2 Mission
A mission statement is the company’s purpose and business in the
present (Thompson et al. 2022). Company X’s purpose is to be a fearless
leader in the beauty industry. Company X showcases fearlessness by
being disruptive in the beauty community, especially as the founder was
the first to create the assisted self-service shopping experience.
Furthermore, Company X inspires beauty consumers to be confident
and follow no beauty rules. An effective mission statement motivates
stakeholders and shareholders to work towards the vision (Jones &
A page number is needed
as you have copy-pasted
the content from
Thompson et al.
The dos and don’ts in the
table could be more fully
applied in the analysis.
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Jones 2014). The mission statement envisions an inclusive future and
enhancing the customer experience. However, there are better
adjectives representing Company X than ‘welcoming’. Welcoming
should be replaced with ‘captivating’ to represent how customers enjoy
their shopping experience and are captivated to visit again. Company X
embodies its mission and vision in its values statement.
3.3 Values
Company values are the behaviour, traits and beliefs the company
expects to embody when pursuing its mission and vision (Thompson et
al. 2022). Company X’s distinctive values represent its unique customer
and employee experience and shopping environment, which drive the
business ahead of the curve. Furthermore, Company X has a subset of
company values representing the culture it desires its employees and
clients to embrace. Table 2 displays examples of how Company X fulfils
its values.
Table 2 – Examples of Company X fulfilling its values
Values | Examples of Company X fulfilling its values |
|
Company X DNA values |
Amazing beauty selection |
• Range of beauty products so beauty consumers can make a one-stop shop. |
Freedom to experience |
• Customers can feel free to test and try products in-store with hygiene stations and makeup applicators to try on makeup. |
|
A fun place to learn | • The learning environment for beauty advisors and customers is an exciting and enjoyable experience. • Education games and activities are created for beauty advisors to start their shift positively. • Beauty advisors create a relaxed and fun experience for customers to mimic talking to a friend. • Brand takeovers happen in-store with live demos happen, meet-and greets with influencers, and free goodies samples are given. |
Overall, a good explanation
of vision, mission and values
statements.
Good suggestion
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• Competitions for employees and customers to win exclusive education brand events. |
||
Disruptive spirit | • Extroverted beauty advisors are praised for their personality. • Awards are given yearly at the Company X Christmas party for who has the most disruptive spirit at each store. |
|
Sub-DNA values |
Beauty & beyond | • Encourage customers and employees to be confident. • Company X contributes to various programs that empower people and have its own program called ‘Company X Stands’. |
Creativity unleashed | • Company X constantly innovates new creative ways to enhance the customer experience. • Employees are encouraged to contribute ideas to improve the business. • There are weekly theme days for beauty advisors to create a makeup theme to unleash their creativity. |
|
Endless evolution | • Company X encourages personal and professional goals. • Company X provides growth within the business. |
|
Boldy authentic | • Company X has diverse employees. • Celebrates diversity days within stores, for example, makeup themes and bringing in cultural food. |
Source: Developed by the author for this report.
3.4 Strategic objectives
Company X’s vision, mission and values align with its strategic
objectives. Strategic objectives are derived from the vision and mission
to set specific performance targets (Thompson et al. 2022). Table 3
analyses Company X’s objectives against its vision, mission and values.
All the objectives contribute to Company X achieving its vision and
becoming the number one beauty destination. Educated beauty
advisors and trendsetting technology to enhance the customer
experience are compelling for beauty consumers to return. Company X
is an example of fearlessness as they were one of the first beauty
This table is very
well-developed.
Specific reasons and
examples of how the
company demonstrates
the key characteristics of
its vision and mission
statements are given
throughout.
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retailers to conquer omnichannel retailing before most businesses in the
beauty industry went online (Sailthru 2021).
Table 3 – Company X’s objectives against its vision, mission and
values
Company X’s objectives | Company X’s vision, mission and values |
The most loved omnichannel in the beauty industry. |
• Vision: Objective is the same as vision. • Mission: Creating a ‘welcoming’ atmosphere builds closer to objective. • Values: All values summarise exactly how a beauty retailer can be the best in the industry. |
Create the most educated beauty advisors. |
• Vision: Objective contributes to achieving vision. • Mission: Beauty advisors are key to achieving mission as they create the ‘welcoming’ atmosphere in stores. • Values: Values embody how a beauty advisor must act to be compelling and inspiring to customers. |
Incorporating technology advancements in the customer experience to stand out from competitors. |
• Vision: Objective contributes to achieving vision. • Mission: Objective shows ‘fearlessness’ in being a trendsetter in the beauty community. • Values: Values embody objective. Values depict taking risks and evolving to be ahead of the pack. |
Source: Developed by the author for this report.
4 Porter’s Five Forces framework
Porter’s Five Forces framework assesses the company’s industry and
competitive environment (Thompson et al. 2022). The Five Forces
framework investigates the strength and nature of an industry’s
competitive forces and whether they support high industry profitability
(Dobbs 2014; Thompson et al. 2022). Table 4 analyses the five forces
contributing to Company X’s competitive pressures.
A good analysis of the
alignment of the vision,
mission and values
statements against the
existing strategic
objectives of Sephora.
However, you should
have drawn more from
scholarly sources
including peerreviewed journal
articles.
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Table 4 – Porter’s Five Forces analysis of Company X
Porter’s Five Forces framework |
Company X | Verdict |
Rivalry among competing sellers |
• The beauty industry is highly competitive. • The number of beauty brands and retailers online is rapidly growing, constraining brick-and mortar revenue growth, especially since the coronavirus pandemic. • Supermarkets, pharmacies, department stores and mass-market outlets are a threat. |
High |
Threat of potential new entrants |
• There are consistently multiple new beauty brands and products entering the market. • Competition is rapidly growing, which has constrained industry revenue growth. • The barrier to entering the brick-and-mortar beauty market is at a medium level, and this barrier is declining. • The barrier to entering the online beauty market is low and declining. • The beauty industry is highly fragmented, without any company owning a substantial market share. |
High |
Threat of competition producing substitute products |
• Brands in the beauty market mimic each other’s products in packaging and formula, especially seen between low-end beauty products mimicking high-end beauty products. • Counterfeit products are easy to find in markets and online. • Beauty brands also mimic services, employing beauty experts to sell and educate beauty products to customers in-store and online. • Influencers also offer beauty advice through social media, meaning beauty consumers do not have to visit beauty retail stores for advice. • Cosmetic surgery, cosmetic tattooing, and lash extensions services are a threat to the beauty industry, as customers can use these services as a substitute for beauty products. |
Medium |
Supplier bargaining power |
• Beauty brands have power over beauty retailers, although beauty retailers carry more power over beauty brands. • Beauty retailers choose what brands they sell and finalise the terms and conditions. • Big overseas brands have more power on which beauty retailer they choose in the Australian market. |
Medium |
While tables and
images are a fantastic
tool to convey
information, they are
meant to portray
summarised/condensed
information. While we
understand the
limitations of the word
count, please keep this
in mind.
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Buyer/ customer bargaining power |
• Beauty consumers can exert power over the beauty industry. • Customers can switch between brands and beauty retailers with ease and no cost. • Beauty consumers can influence what beauty retailers should sell based on beauty trends. • Since the coronavirus pandemic and inflation, beauty consumers are more price-sensitive. • Company X has had more frequent sales in the past few years and continues to sell exclusive brands to earn more bargaining power. |
Medium |
Source: IBISWorld 2022a; IBISWorld 2022b; Leung et al. 2019.
4.1 Rivalry among competing sellers
The beauty industry is highly competitive, especially concerning services
and products. The rivalry between existing competitors usually is the
most prominent form of competition (Johnson 2022). Supermarkets,
pharmacies, department stores and mass-market outlets are a threat as
they increasingly stock various brands and have frequent discounts,
which adds to the industry pressure (IBISWorld 2022a). Table 5
illustrates the reasons for the high competition in the beauty industry,
and Table 6 shows the market share of Australian beauty retailers.
Table 5 – Reasons for high rivalry competition in the beauty industry
Reasons for high rivalry competition in the beauty industry |
• Customer demand is growing slowly. • Costs for customers to change brands are low. • Products between brands are not differentiated. • Companies have excess inventory and high fixed costs. • Numerous competitors who are approximately similar in size and competitive strength, including e-commerce. • Competitors have various strategies, objectives, and countries of origin. • Competitors have emotional stakes in the company or encounter high exit barriers. |
Source: Modified from: IBISWorld 2022a; Thompson et al. 2022.
Table 6 – Market share of Australian beauty retailers
Market share of Australian beauty retailers |
• The top four beauty industry players make up less than 40% of industry revenue, making it easier for businesses to enter the market. • Company X makes up 4-5% of the beauty market in brick-and-mortar. • Company X’s direct rival, Mecca Brands has a 15% market share of the beauty market in brick-and-mortar. |
Competitive analysis
involves identifying and
analysing companies who
compete with the firm by
delivering a similar
product to consumers or
an alternate solution to
consumers’ needs. When
considering your
competitors, what we
want to know are points
of parity and points of
difference.
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• Adore Beauty is one of Australia’s largest online beauty retailers, making up 10.9% market share of the online beauty market. • Australian Pharmaceutical Industries (API) who houses Priceline, has 4- 5% market share in brick-and-mortar. |
Source: IBISWorld 2022a; IBISWorld 2022b.
4.2 Threat of potential new entrants
The beauty industry increasingly has multiple new beauty brands and
products entering the market. New entrants in an industry increase
competitive pressure between rivals (Thompson et al. 2022). The
competition is growing as the barrier to entering the brick-and-mortar
beauty market is at a medium level, and unfortunately, this barrier is
declining (IBISWorld 2022a). The barrier to entering the online beauty
market is low and declining (IBISWorld 2022b). Low barriers to entry
increase competition and lowers industry profitability (Thompson et al.
2022).
4.3 Threat of substitute products
Substitute products and services for what Company X provides is
inevitable. An industry is vulnerable to substitute products when the
customer cannot differentiate between the product/service of two
different brands (Thompson et al. 2022). In terms of products, beauty
consumers can easily find counterfeit beauty products in markets and
online. Outside of products, cosmetic surgery, cosmetic tattooing, and
lash extension services are threats, as customers can use these services
as a substitute for beauty products.
4.4 Supplier bargaining power
Beauty brands can exert power over beauty retailers; however, beauty
retailers carry more power. Brands need a foot in the door to enter
large beauty retailers; even if the beauty brand is successful in receiving
an offer, the beauty retailer has the final say. However, famous overseas
brands have more say on which beauty retailer they enter the Australian
beauty market.
Here, you need to assess
the bargaining power of
suppliers, e.g. if there are
lots of suppliers then their
bargaining power is likely
to be low.
A reference would have
been useful.
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4.5 Buyer/customer bargaining power
Beauty consumers can exert power over the beauty industry (Leung et
al. 2019). As the beauty industry is oversaturated, customers can easily
switch between brands and beauty retailers. Especially since the
coronavirus pandemic and inflation, beauty consumers are more pricesensitive, automatically giving them more bargaining power (IBISWorld
2022a; Thompson et al. 2022). Moreover, beauty consumers can
influence what beauty retailers should sell based on beauty trends.
5 VRIN test
The VRIN test assesses which company’s strategies contribute to or
interfere with being sustainably competitive over its rivals (Talaja 2012).
The test investigates a company’s resources and capability through the
VRIN acronym valuable, rare, inimitable, and non-substitutable
(Thompson et al. 2022). Table 7 shows the VRIN analysis of Company X’s
brand presence, beauty products, beauty advisors, and research and
development (R&D).
Table 7 – VRIN analysis of Company X
Resource or capability |
Valuable | Rare | Inimitable | substitutable Non- | Competitive significance | Performance implications |
Brand presence |
Yes | Yes | Yes | Yes/No | Sustainable competitive advantage |
Above-average profitability |
Beauty products |
Yes | No | No | No | Competitive parity | profitability Average |
Beauty advisors |
Yes | No | No | No | Competitive parity | profitability Average |
R&D | Yes | Yes | Yes/No | Yes/No | Temporary competitive advantage |
Average profitability to above-average profitability |
Source: Modified from: Hanson et al. 2022.
5.1 Brand presence
Company X’s brand presence in the beauty community is unique. The
signature black and white stripes and sometimes a touch of red in the
Using the five forces
framework involves
looking closely at the
combined strength of all
five competitive forces. A
conclusion paragraph that
brings this all together
would add value here.
Resources and capabilities
need to be identified, then
a V, R, I and N test is
conducted for each
resource and capability to
determine competitive
significance and
performance implications.
Check your assessment
question to see which
analyses are required.
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branding indicate to beauty consumers that Company X is around.
Company X has been established for over 50 years, so the brand’s
reliability is well-known, and the brand’s presence is expensive to
imitate. While there is no substitute for the Company X experience,
rivals establish and expand their brand presence in Australia, specifically
Mecca Brands.
5.2 Beauty products
Company X offers a diverse range of luxury products that are accessible
to everyone. While some brands are exclusive to Company X, others can
purchase from other retailers. Furthermore, other brands can imitate
the products as suppliers often share their facilities with multiple
brands. Moreover, Company X’s products are not unique, as other
beauty retailers sell substitutes.
5.3 Beauty advisors
Company X’s beauty advisors are vital to the profitability of the
company. The beauty advisors educate and assist customers in-store
and are responsible for building loyalty. However, their skills and
knowledge are not rare because other beauty stores employ beauty
advisors. Furthermore, influencers and online tutorials provide beauty
tips.
5.4 Research and development
R&D in the technology aspect of the customer experience is crucial for
Company X to stay competitive. In the digital age, technological
advances are critical to staying ahead of rivals (Kozielski & Sarna 2020).
Initiating R&D is possible, but it is expensive to recreate. Furthermore,
AI and AR in beauty tools is rare, so finding substitutes is difficult.
6 SWOT analysis
Investigating the success or failure of a strategy is essential to uncover
the underlying reasons of the outcome. SWOT analysis examines the
A number of logical and
relevant points but overall
lacks depth as you have not
supported your points with
literature and course content.
A concluding paragraph was
needed to indicate which of
the company’s competitive
resources/capabilities should
be continuously nurtured and
strengthened to develop new
capabilities to be able to
adjust with disruptive
changes.
References could help
strengthen the analysis.
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internal and external resources that contribute to the business
positively or negatively (Namugenyi, Nimmagadda & Reiners 2019).
SWOT is an acronym for the strengths and weaknesses of the company,
opportunities in the market, and threats to the company (Thompson et
al. 2022). Table 8 displays the SWOT analysis of Company X.
Table 8 – SWOT analysis of Company X
Strengths | Weaknesses |
• Established, reputable, global brand. • 23 stores across Australia, making Company X accessible to all customers. • Omnichannel strategy – Online store and app store. • Exclusive brands. |
• Small market share. • Low employee retention. • Other than exclusive brands, stores offer little difference from what Mecca Brands offer. |
Opportunities | Threats |
• Bring beauty technology strategies from American Company X stores (foundation matcher device, tablets/TVs to shop online when customers are in-store, live chat with beauty advisor on website, and online consultations provided during coronavirus pandemic). • Educating beauty advisors to be experts in all beauty categories. • Expand men’s beauty category. • Click-and-collect was only provided during government lockdowns during the coronavirus pandemic. |
• Rise of online shopping. • High competition in the beauty industry, including supermarkets, pharmacies, and mass-market outlets. • Rival competitor Mecca Brands has more stores than Company X. Mecca Brands has over 100 stores across Australia and New Zealand, most in Australia. • Mecca Brands is opening a flagship store on Bourke St, Melbourne, in 2023. • Inflation. • Pandemic (significant loss in revenue and Company X David Jones Bourke St store closure). |
Source: IBISWorld 2022a; IBISWorld 2022b; LinkedIn 2022; Sailthru 2021;
Worrall 2021.
6.1 Strengths
Company X’s strength is being an established, reputable, international
brand. Furthermore, Company X has an omnichannel strategy where
customers who cannot reach a store or prefer shopping online can shop
Good introduction to the
section with references.
A well-developed table.
Strengths are things that your
organisation does particularly
well, or in a way that
distinguishes you from your
competitors. Think about the
advantages your organisation
has over other organisations.
These might be the
motivation of your staff,
access to certain materials, or
a strong set of manufacturing
processes.
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from the Company X web store and the app store. Another strength of
Company X is selling brands exclusive to its stores, meaning they are the
only beauty retailer selling that brand in that country.
6.2 Weaknesses
Company X’s weakness is its lack of differentiation in what they offer its
customers compared to its close rivals. Other than the exclusive brands,
Company X has a similar offering to Mecca Brands. Unfortunately, the
lack of differentiation in product and service and the highly competitive
landscape have contributed to Company X’s small market share.
Moreover, Company X has low employee retention with its beauty
advisors.
6.3 Opportunities
The Company X American market is ahead in its technology
development and AI that Company X can adopt. Company X can expand
its loyalty base by appealing more to men as it is a growing category in
the beauty industry (Saravanan & Kummar 2013). Moreover, Company X
must develop its beauty advisor’s education and skills to be experts in all
categories of beauty and trends. Furthermore, Company X should offer
click-and-collect to be an omnichannel truly, as they only provided this
service during the pandemic lockdowns.
6.4 Threats
Intense competition in the beauty industry is a threat to any business.
The rise of online shopping is affecting brick-and-mortar revenue
negatively (IBISWorld 2022a). Furthermore, Company X’s rival, Mecca
Brands, has more stores than Company X in Australia (LinkedIn 2022).
Moreover, the rise of inflation means consumers are more price
sensitive, meaning they will shop less at high-end stores like Company X.
The coronavirus pandemic has also pushed beauty retailers and brands
to the brink, with some closing, including Company X’s Bourke St store.
Weaknesses are the
internal things within an
organisation that are suboptimal. That is,
considering things such as
people, processes,
systems, and resources
that could be improved.
You need to also explain
how these four factors
(SWOT) are
interconnected (e.g.,
what firm-level
weaknesses might hinder
utilising the external
opportunities, or, what
internal strengths could
be utilised to deal with
the external threats, etc.).
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7 Company X’s critical strategic issues
The analysis of Company X through the strategic frameworks has
uncovered critical strategic issues to modify. Amending these issues will
give Company X a sustainable competitive advantage and grow its
market share in the beauty industry.
Company X America must share its beauty technology and AI platforms
with Company X. Technological advances offer new opportunities and
competitive advantages and improve the company’s position
(Rodriguez-Salvador & Castillo-Valdez 2021). The beauty industry is
changing the structure of its stores to be digitally enhanced to increase
the appeal to customers (IBISWorld 2022a). In the next five years,
beauty brands will increasingly use augmented reality and virtual reality
apps to test products before purchasing (IBISWorld 2022a). Especially
after the coronavirus pandemic, customers are questioning the safety of
using testers (IBISWorld 2022a). AI must be seamless across all Company
X stores worldwide to give customers a seamless experience.
Company X must expand the brands they offer to cater to men and
succeed in creating an inclusive future. The male consumer
demographic in the beauty market has grown significantly in the last five
years and is projected to grow (IBISWorld 2022b). Men are becoming
more image-conscious, especially in the younger age group (IBISWorld
2022b). Beauty brands are noticing the trend and are catering to men’s
present needs (IBISWorld 2022a).
Educating beauty advisors must be a priority for Company X as it places
a high emphasis on its beauty advisors through its strategy. Company X’s
beauty advisors must have the training and high knowledge in all beauty
categories. The beauty advisors receive general brand training but only
detailed training in some beauty categories. Educating employees and
Your assessment question
and/or rubric may specify
a specific number of issues
to discuss. If you, you
must stick to this. If not,
aim to be as
comprehensive as possible
within the word count.
20
developing their skills minimises low employee retention (Rathi & Lee
2015).
Company X must offer click-and-collect across Australia to truly be an
omnichannel. Most large retailers offer the click-and-collect service,
especially if the business has many stores. Company X’s close rival
Mecca Brands offers this delivery service which puts Company X at a
disadvantage. Click-and-collect is another way Company X can provide a
solution and convenience for customers (Milioti, Pramatari & Kelepouri
2020).
8 Conclusion
Company X has been a global trailblazer, but since the beauty industry
has become oversaturated, Company X must aim to remain ahead of its
rivals. Company X must replace ‘welcoming’ with ‘captivating’ in its
mission statement to accurately reflect its unique customer experience.
To enhance the customer experience further, Company X must adopt
the Company X American beauty technology, expand the men’s
category, and offer click-and-collect. Furthermore, Company X must
invest in educating its beauty advisors to be the best in the beauty
industry. Implementing these strategic resources and capabilities will
grow Company X’s market share in Australia and obtain its mission and
vision.
Good discussion of critical
strategic issues
A well-written conclusion.
21
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