Estee Lauder SWOT Analysis Analyzes, Estée Lauder Companies, Inc. engages in the manufacturing of skincare, makeup, fragrance, and hair care products. It sells products under the following brand names: Estée Lauder, Clinique, Origins, MžAžC, Bobbi Brown, La Mer, Jo Malone London, Aveda, and Too Faced.
Did You Know?
In 1945, Estée and her husband rented a kitchen at a non-functioning restaurant and began developing beauty products.
Estée got her to start selling skincare and makeup in beauty salons, demonstrating her products to women while they were sitting under hair dryers. In 1946 she and Joseph Lauder officially launched the company, and a year later they got their first major order: $800 worth of products from Saks Fifth Avenue.
This can only be achieved through a firm with extensive knowledge, experience and innovative strategies. To determine the strengths of the company potential, weaknesses, opportunities and threats, it is necessary to conduct a SWOT analysis by Estee Lauder.
Estee Lauder At A Glance – Estee Lauder SWOT Analysis
Company: The Estée Lauder Companies Inc.
Founders: Estée Lauder | Joseph Lauder
Year of establishment: 1946, New York, New York, United States
CEO: Fabrizio Freda
Headquarters: New York, New York, United States
Employees (Dec 2020): 48,000
Ticker Symbol: EL
Type: Public
Annual Revenue (Dec 2020): US$16.22 Billion
Profit net income (Dec 2020): US$2.87 Billion
Products & Services: Manufacturing of skin care, makeup, fragrance and hair care products
Company Website: www.elcompanies.com
Top Estee Lauder Competitors
Competitors: Natura Brazil | Revlon | JAFRA | Shiseido | L’Oréal USA | Clarins | Coty | L’Occitane | Unilever | Johnson & Johnson | Procter & Gamble | Beiersdorf | CHANEL | AMOREPACIFIC | Lancome | Clarins
Estee Lauder Strengths – Estee Lauder SWOT Analysis
- A track record of success in the development of innovative products and services.
- Outstanding performance in new Markets Excellent Performance in New Markets Estee Lauder has developed expertise in entering new markets and making a success of these markets. The expansion has allowed the company create a new revenue streams and diversify its risks of the economy in the markets that it operates in.
- Highly successful with Going To Market strategy with its product.
- A strong dealer community has developed a culture among dealers and distributors where dealers do not just promote the their products, but also invest in educating sales staff to inform the customer how they can get the most value from the product.
- Reliable suppliers It has a solid foundation of reliable suppliers of raw materials, allowing the company to get around any bottlenecks in the supply chain.
- Automation of processes made it possible to maintain the same quality of Estee Lauder products and has allowed the company to increase and decrease its size depending on the needs on the market.
- A solid distribution network the years, Estee Lauder has developed a solid distribution network which can cover the vast the majority of its potential customers.
- Experienced track record of successfully merging complementary firms via mergers and acquisitions. It has successfully merged a variety of tech companies over the past few years in order to reduce its operational costs and create a solid supply chain.
Estee Lauder Weaknesses – Estee Lauder SWOT Analysis
- Days inventory is very high compared to competitors, which makes the company need to raise capital to invest into the channel. This can affect the growth rate of Estee Lauder
- A high rate of attrition in the workforce – compared with other companies within the sector Estee Lauder is a high attrition rate and must invest more money compared to its rivals on the development and training of its employees.
- The financial planning process isn’t done effectively and efficiently. The current ratio of asset to ratio of liquid assets suggests that the business can utilize the cash more effectively than it does currently.
- There are gaps in the selection offered from the business. This is a problem that could allow a new competitor to gain position on the market.
- The company hasn’t been capable of tackling the issues presented by the new players in the market and has been losing market share in small-scale categories. Estee Lauder must develop an internal feedback system directly from its sales representatives on the ground to address these challenges.
- The ratio of profitability and Net Contribution percentage of Estee Lauder is below the industry average.
- A limited success outside of the core business. Estee Lauder is one of the top companies in its field, it has had difficulties transitioning to different product segments within its current business model.
Estee Lauder Opportunities – Estee Lauder SWOT Analysis
- The new technology gives an opportunity for Estee Lauder to employ a differentiating pricing strategies in the current market. This will allow the company to keep its loyal customers by providing excellent service and attract new customers by offering other value-oriented offerings.
- The green drive of the government also provides the possibility of buying Estee Lauder products by the government, as well as the federal contractors of government.
- Lower inflation rate. The lower inflation rate will bring stability to the market, permit credit at a lower rate to consumers from Estee Lauder.
- Environmental policies that are changing – These opportunities will provide an even game for players in the market. This is a fantastic chance that will allow Estee Lauder to demonstrate its advantages in the field of technological advancements and gain sales in the emerging category of products.
- The development of the market will result in the dilution of the advantage of competitors and allow Estee Lauder to boost its competitiveness compared to other competitors.
- New customers come from the online channels. Over the last few years, the company has invested a huge amount of money in the online platform. This investment has created a an entirely new channel of sales to Estee Lauder. In the coming years the company will benefit from this opportunity by understanding its customers better and addressing their needs through large data analysis.
- The core competencies of an organization can be successful in different product fields. One example is the case of GE health research has assisted it in the development of better oil drilling equipment.
- The economic recovery and the increase in customers’ spending, following years of economic recession and a slow growth rates in the sector, presents an excellent opportunity to Estee Lauder to gain new customers and expand their market share.
Estee Lauder Threats – Estee Lauder SWOT Analysis
- Local distributors’ growing power could pose a threat in certain markets, as local distributors are paying more to local distributors.
- The growing trend towards isolationism in the American economy may trigger similar responses from other governments which could negatively affect international sales.
- The demand for the high-profitable products is seasonal and any unpredictability during the peak season could affect the financial performance of the business in the short to medium-term.
- A shortage of skilled laborers in certain global markets is an obstacle to the constant growth in profits of Estee Lauder in these markets.
- Lawson liability in different countries differ and Estee Lauder could be exposed to liability claims based on modifications to the laws in these markets.
- Since the company operates across multiple countries, it is subject to currency fluctuations, particularly given the unstable political climate in various markets around the globe.
- Stable profit has led to an increase in the number of companies in the industry over the past two years, which has put pressure on profitability, not just but also sales overall.
- The changing buying habits of consumers from the online channels could pose an attack on the current physical infrastructure-driven Supply Chain model.
Estee Lauder SWOT Analysis Overview Template
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