External Factors Impact On Estee Lauder

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External Factors Impact On Estee Lauder

Table of Content

External Factors Impact On Estee Lauder1



Economic Forces:2

Social, Cultural, Demographic and Environmental Forces2

Political, Legal, and Governmental Forces:3

Technological Forces:3


Market Penetration:3

Market Development:4

Horizontal Diversification:4

Product Diversification:4

Horizontal Integration:5

Business Level Strategy5


Expand product line:6

Retail chain stores:6

US department-store sales:7

International Markets:7


Customer satisfaction:8


Foreign economic and currency issues:8

Rivals and competition:9

High operating costs:9

Recession/ national economy:10

Changing tastes and trends:10


Rivalry within the industry: STRONG10

New Entrants: WEAK11

Barriers of entry:11

Expectation reactions of incumbent firms to new entry:13

Substitute products: WEAK13

Suppliers: WEAK14

Customers: MODERATE14

Key Success Factors15

Internet capability:15

Managerial Experience:16

Accurate filling of orders:17



Strong advertising and promotion:17

Brand name recognition:17

Product innovation:18

New product developments:18

Competitive capabilities:19


Internal operating problems:19

Obsolete products:20

Focused product line:20



Superior customer service compared to rivals:21

Quicker design-to-market times than rivals:21

More attractive product line than rivals:22

Stronger brand name than rivals:22

Stronger global distribution and sales capabilities than rivals:23


External Factors Impact On Estee Lauder


Estee Lauder, founder of what is now the major cosmetics empire, started her business with the single jar of face cream that was mixed by her uncle, the chemist. Today, based in New York City, Estee Lauder is the manufacturer and marketer of four cosmetics product lines, like skin care, makeup, fragrances, and hair care products. These products are sold in over 130 countries and territories under different brand names, such as Estee Lauder, MAC, Bobbi Brown, Clinique, Aveda and so on. The company has 26 brands and employs over 22,000 people worldwide. (Slater 1994: 14)


A young entrepreneur named Estee Lauder founded that being young, beautiful and youthful are common thought and feel to everyone, man and woman. Due to that, she felt that she could provide the product that espoused those qualities. The company was founded in by Estee Lauder and her husband, Joseph Lauder with help of her uncle, John Schotz. (Skrebneski 1987: 21)

Economic Forces:

Estée Lauder owns various brands that cater to different consumers. For example, Estée Lauder caters to higher end clients, who are willing to make the considerable investment in their skin care, whereas Clinique brand caters more to middle-class consumers. (Lauder 1985:12)Since most of brands owned by Estée Lauder cater to high-end or middle-class clients, prices are considerably higher compared to competitors products that are sold in drug stores, such as Revlon.

Social, Cultural, Demographic and Environmental Forces

An increase in life span of adults, gives Estée Lauder opportunity to utilize that market, by offering them products that offer healthy, younger looking skin. Therefore, Estée Lauder has to continue to develop and innovate products that cater to need of older women. Also, Estée Lauder provides products, not only within North America, but also to Europe, Middle East, Asia Pacific, and Africa. (Kent 2003: 32)

Political, Legal, and Governmental Forces:

Since Estée Lauder provides products all over world, it is important for it to consider regulations of those countries, as well as tax laws and tariffs should be kept in mind. Political state of country should also be considered, especially when entering new markets. (Kennedy 1988: 12)

Technological Forces:

With technological advances increasing in every industry, it is important for Estée Lauder to stay ...
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