How did Estee Lauder earn? 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.
What’s in it for me?
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 $14.98 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.
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.Estee Lauder Co.’s Recruits Tara Simon as Too Faced’s Sr VP & Global GM on 31 August 2020.”Tara has great respect for the vision, grit and passion with which Jerrod and Jeremy built Too Faced. She will be instrumental in helping to bring the unique brand narrative centered around Jerrod’s inspiring products and experiences to new audiences globally,” Demsey continues. The beauty giant plans to reduce its workforce by 1,500 to 2,000 jobs worldwide, or about 3% of total staff, and boost its digital operations after pandemic lockdowns hit demand for makeup. Most of the cuts will be store employees and support workers. BASF partners with The Estée Lauder Companies and Solidaridad to provide COVID-19 support to sustainable palm farmers in Indonesia. MODA Partners With Estée Lauder For Breast Cancer Awareness Month In October.Atropos Therapeutics has announced a joint agreement with The Estée Lauder Companies.
Atropos Therapeutics is a biotech company focused on the discovery, development, and commercialization of therapies targeting the formation of senescent cells. Atropos’ proprietary platform identifies chemical matter that can modulate the formation of senescent cells — and these are useful in both beauty, specifically, anti-aging, as well as cancer research. ‘Estee Lauder’ officially presents Girls’ Generation’s YoonA as their new muse
|President & SEO||Fabrizio Freda|
|Chief Technology Officer||Rhonda Vetere|
|Board Member||William P. Lauder|
|Board Member||Barry Strenlicht|
|Categories||Consumer Goods, Cosmetics, Fashion, Health Care|
|Headquarter||Greater New York Area, East Coast, Northeastern US|
|No. of Employees||10001+|
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
- 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
- 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
- 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.
- 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
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 222.93 on August 28, 2020, which is highest. Estee lauder raises more than $450 million from its IPO.
EVP-Global Human Resources of The Estee Lauder Inc Michael O’hare sold 3,615 shares of EL on 09/04/2020 at an average price of $218.79 a share. The total sale was $790,926.
The company invested a lead investment in DECIEM for an 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.
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.
|Have & Be Co Ltd||Nov 24,2019||$1.7 B|
|Too Faced Cosmetics||No 14,2016||$1.5 B|
|Le Labo||Oct 15,2014||–|
|Smashbox Cosmetics||May 17, 2010||–|
|Origins||Jul 9, 2007||–|
|Laboratoires Darphin Sas||Apr 30,2003||–|
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 an 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.
12. Marketing Strategy of Estee Lauder
Estee Lauder centres its marketing philosophy on promoting its high-quality products to its loyal consumer base. Let’s see how Estee Lauder follows the 4P’s of marketing.
They provide a wide range of products and had diversified product portfolio. Estee Lauder started with just 4 products which were Creme Pack, Super-Rich All Purpose Creme, Skin Lotion, and Cleansing Oil.
But now, it includes many products, some are as follows -:Skincare includes products like cleanser, face oil, toner, mask, BB crème, moisturizer, anti-blemish, anti-wrinkle, eye-care, and repair serum
Fragrances include Sensuous, Pleasures and Beautiful for women and Intuition and Lauder for men
Makeup products include powder, blush, concealer for face, mascara, eyeliner, eyeshadow for eyes, lipstick, lip pencil for lips, nail lacquer and accessories like refills and brushes
Re-Nutriv includes eye cream, face oil, a mask for skincare and concealer and foundation for make-up
Estee Lauder is reviewing its products for skin-lightening references to avoid criticism.
Estée Lauder Says ‘Lipstick Index’ Is Out, Moisturiser Is In
Estée Lauder has introduced ANRcade, a microsite featuring web-based videogames that promote the brand’s Advanced Night Repair Synchronized Multi-Recovery Complex. Each of the four games found on the site has different play styles and provide information about Estée Lauder’s products.
The company is a multinational that operates in many countries like Japan, China, Brazil. They started their journey from New York, the United States, and soon expanded the network among many countries.
The first international city in which they expanded was London, the UK in 1960. At present, they operate in more than 135+ countries by selling products through a chain of retail outlets and also selling online.
Estee Lauder has a premium branding in its target audience mind. They always projected itself as a premium brand and provide high-quality products. They targetted the upper section of the society.
They adopted Premium Pricing Strategy because this portrays them that they offer value-added products to their customers.
But at the same time, they offer several discounts and gift cards for retaining customer loyalty.
They had taken many steps to promote their brand awareness. They offer a 15% discount to the new customer and had launched a new scheme for providing gift cards and coupons.
This helped them create a new customer base and also benefitted the existing customer.
The company promotes its product through several media like photo displaying, email marketing, and sales and marketing executives are advised to connect with the customer as much as possible.
The headquarter are situated in New York, United States.
Lipsticks, Lipcolour, Cream, Skin Tone Whitner, etc.
Yes, Estee Lauder also manufactures products for men like fragrance and spray.
Joseph Lauder and his wife Estee Lauder in 1946.
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