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How Estee Lauder Earns? Estee Lauder Case Study

Do you know the king of the Cosmetic Industry? 

It’s Estee Lauder who is a leading international manufacturer and marketer of Skincare and beauty products. Who generates $15.2 Billion in revenue annually.

The company is working in more than 150 countries and territories with more than 48000 employees. Company has been founded by Estee lauder who is most influenced lady of the United States. This is the only company who solely focused on Beauty products.

The Company has never raised any funding only launched its IPO to become a private company. Company has a diversified portfolio of more than 25 prestige brands.

So let’s read the Case Study of Amazing company, and learn how it started and become the #1 in cosmetic Industry.

1. About Estee Lauder 

Estee Lauder company is a leading international company of marketing and manufacturing of beauty products. The Company was founded in 1946 by Estee Lauder and Joseph Lauder in New York City.

The company officially incorporated on Dec 9, 1976. Now the company offers a wide range of beauty products including skincare and hair products. The company has a diversified portfolio of more than 25+ prestige which includes AVEDA, BECCA, DKNY, GlamGlow etc. Estee Lauder is working in 150+ countries and territories with more than 48000+ employees.

The Net sales of the company till now is   $14.82 Billion. Its skincare products fulfil many needs of skin likes moisturizers, serums, cleansers, toners, body care etc.

2. How Estee Lauder Started 

Estee lauder company is founded by Estee Lauder and her husband Joseph Lauder in New York. In 1946, they began producing cosmetic products. In the beginning, they divide their responsibilities according to their skills and manage the different works of their ventures. They are continuously working to expand their business.

In 1960, they launched their first international store in London. They launched their two brands who become the most successful brands in Cosmetic history named Aramis and Clinique. In 1968, Esteem launder becomes 10 of outstanding women in business by business and financial editor which leads the company to more success in the future.

The company continuously launching new products to expand their business. Later these products become successful one after one. In 1980, Estee lauder recognised as most influenced lady in beauty business In November 1995 companies launch Its IPO went public. Later in 2000, the leadership of Estee lauder Companies is transitioned to William Lauder. The company continuously launching new brands and hit the net sale of $10 Billion in 2012 for the first time.

3. Business Model of Estee lauder

The Business model of Estee Lauder is very simple. It is a manufacturing company who produces many cosmetic, health care, personal care and hair care products.

They sell their products to another distributor like as a wholesaler. The company also has its stores in which they sell their products which means they sell directly to their customers.

They also sell their products through their e-commerce stores. Thus the company generates its revenue by selling its products. Their profit is the difference between the cost of product development and the selling price of their products.

Estee lauder Case Study

4. Management Team of Estee Lauder 

Estee Lauder company founded by Estee Lauder and her husband Joseph Lauder. Estee Lauder is an American beautician and businessman who run these successful company. She is the most influential lady in America and top 10 outstanding businesswomen. Let’s read another team member of Estee Lauder.

 

President & SEO Fabrizio  Freda 
Chief Technology OfficerRhonda Vetere
Melissa Chu Director 
Board MemberWilliam P. Lauder
Board Member Barry Strenlicht
Websitewww.elcompanies.com/
FacebookView on Facebook
LinkedinView on LinkedIn
TwitterView on Twitter
Estee Lauder Case Study

6.Fun Facts

Categories Consumer Goods, Cosmetics, Fashion, Health Care
Founded Date 1946
HeadquarterGreater New York Area, East Coast, Northeastern US
Operating Status Active
Funding Status IPO
No. of Employees 10001+
Company TypeFor-Profit

7. SWOT Analysis 

SWOT Analysis is a type of analysis which is used to measure the straight weakness paternities and threats of a business. The SWOT Analysis of Estee Lauder is following

Strengths

  • Estee Lauder has a team of well-qualified professionals
  • Company has a beautiful user-friendly website
  • Company has a strong distribution Channel 
  • Company has a strong financial position from the beginning
  • Company has a large asset base which provides the company stability

Weakness

  • Company spend more than the industry on R&D. Thus, other companies have a competitive advantage of their unique products. 
  •  A lot of Outlets of the company is rented which increase the expanses of the company
  • The company have a high employee turnover ratio as compared to industry
  • Company spend less on quality control
  • Company has a lack of legal department

Oppturinites 

  • The company has an opportunity to build a great presence on the internet
  • There is a rapid growth in the change of sales in e-commerce Industry. Which also increase the sales of the company.
  • Social Media is a great way to market any business. Estee Lauder use social media very best to market its business
  • Technology development reduced the cost of  Production.

Threats 

  • There a lot of competition in the cosmetic industry.
  • Constant technology development leads to educate the employees which increase the cost. 
  • Regulation is increasing day by day of using chemicals because there are a lot of chemicals in cosmetic products
Estee lauder Case Study

8.Funding 

Company launches its IPO on 16 November 1995 with a share price of $26.50 per day on the New York Stock Exchange. Its share now trending for 

$218.49  who is highest.  Estee lauder raises more than $450 million from its IPO. 

9.Investments

The company invested a lead investment in DECIEM for undisclosed amount on Jun 15, 2017.

DECIEM is Canada based manufacturer of beauty products. DECIEM develops skincare treatment products like cleansing conditioners, hair growth serums and body anti-ageing products. 

Estee Lauder Case Study

10. Acquisition

The company has acquired 8 companies. Their most recent acquisition is Have & BE Co ltd for $1.7 B. So far they acquired many famous companies like Too Faced Cosmetics, BECCA, le lebo and Smashbox cosmetics etc.   

Acquiree NameDatePrice
Have & Be Co LtdNov 24,2019$1.7 B
Too Faced CosmeticsNo 14,2016$1.5 B
BECCAOct 21,2016
Le LaboOct 15,2014
Smashbox Cosmetics May 17, 2010
Origins Jul 9, 2007
Laboratoires Darphin SasApr 30,2003
SassabyOct 1,197

11. Competitor of Estee Lauder

Like all other competitors, there is also a lot of competition in the cosmetic Industry. Estee Lauder majorly competed with Coty, Avon Products and Beiersdorf. Coty is also and manufacturer and marketer of cosmetic products who is majorly competing with Estee lauder. Avon products is another competitor of Estee Lauder who also manufactures and markets beauty products. Beiersdorf is another company who manufacture and market personal care products.

Estee lauder featured image
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