Company Profile
Founded in 1946, this technologically advanced, innovative company has gained a worldwide reputation for elegance, luxury and superior quality. Our products come with a promise to uphold the finest standards of excellence. Through extensive research and stringent product evaluation, we are pleased to bring you skincare, makeup and fragrance products that are both gentle and highly effective.
Founder: Estee Lauder, the founder of the $8 billion company that bears her name, started her business with four skin care products and a simple premise: that every woman can be beautiful.
Principles: We are dedicated to working together with uncompromising ethics and integrity. We encourage our people to create, to innovate, to be entrepreneurs and to strive for the best, always.
To ensure the long-term success of our Company, we integrate the “High-Touch” aspect of our business –our best quality– into all our day-to-day business activities. Our workplace culture fosters a unique spirit of teamwork, innovation, passion and a shared mission of "Bringing the Best to Everyone We Touch and Being the Best in Everything We Do." We clearly post the following commitments in our offices throughout the world for our employees to live and work by: • Provide customers with innovative cosmetic products of the highest quality.
• Deliver outstanding service by treating each individual as we ourselves would like to be treated.
• Create an environment that fosters personal growth and well-being.
• Build partnerships with our suppliers, retailers and colleagues based on fairness and trust. • Enhance our reputation of image, style and prestige. • Pursue profit, but never at the expense of quality, service or reputation. • Eliminate waste and reduce inefficiencies in order to provide maximum value to our customers. • Be responsible citizens in every community we serve.
We continue to learn from the best practices of our brands and employees to unite and strengthen our efforts across brands, regions and functions as we strive to be the best. We are proud of the progress we have made to date and we recognize that we have opportunity for growth. We are committed to constantly improving our results.

Creativity and Innovation: The entrepreneurial talents of our employees are one of our key strengths. They enable us to design products and services that capture the imagination of our consumers and take the industry in new directions.
Corporate Strategy
As we pursue our strategic journey, we’re investing greater resources in our most promising opportunities – by category, brand, region, and channel. We carefully decide where to allocate our resources to drive our momentum for the long term.
The Estée Lauder Companies’ long-term strategy seeks to achieve higher levels of sustainable, profitable growth to remain a leader in global prestige beauty. Our Company is committed to increasing innovation throughout all aspects of its business, putting a greater focus on consumer insights and integrating its brands, regions and functions to leverage scale and efficiencies. We are strengthening critical areas that distinguish our Company.

Management Team
John Demsey, Group President of Domestic Operations International Operations
John Demsey, Group President of Domestic Operations International Operations
Cedric Prouv, Group President of International Operations
Cedric Prouv, Group President of International Operations

Vision and Mission Estee Lauder Companies vision is: “bringing the best to everyone we touch and being the best in everything we do. By ‘the best’ we mean the best products, the best people and the best ideas.” Furthermore, the company is committed to uncompromised ethics and integrity. For all employees domestically and globally, and the board of directors, the highest standard of ethics is a condition of employment. The company official homepage elaborates by stating the following:
“The Estee Lauder Companies, Inc. is committed to the highest standard of professional and personal conduct. All employees of the company are expected to conduct themselves at all times within the letter and spirit of the Code. The Code of the Conduct applies to all employees of the Company throughout the world and to the members of the Board of Directors.” A full description of the code of conduct can be found at http://www.elcompanies.com?pdfs/code-of-conduct-2010.pdf.
Estee Lauder does not have a written mission statement.

External Opportunities 1. Increasing numbers of people are buying products online for convenience, cost savings, and confidentiality. 2. Men are increasingly becoming more concerned with their looks and stereotypes of men using skin care products are diminishing. 3. Customers are becoming more interested in herbal products that are derived from natural sources. 4. Weak US Dollar makes US based products more affordable to customers in Canada and Europe.

External Threats 1. Many new startup companies with specialty products are created each year. 2. Top competitors in the cosmetics industry are diversified with many brand names and a wide range of products. 3. Products can be purchased at significantly lower cost over the Internet, harming revenues and traditional distributors. 4. Growing trend among sections of the population for a more natural look and reduction in their use of makeup and related products. 5. Customers tend to be extremely brand loyal.

Competitive Profile Matrix | Estée Lauder | Revlon | Procter & Gamble | Critical Success Factors | Weight | Rating | WS | Rating | WS | Rating | WS | | Market SharePriceFinancial PositionProduct QualityProduct LinesConsumer LoyaltyEmployees | 0.200.100.200.150.100.200.05 | 4234444 | 0.800.200.600.600.400.800.20 | 4312334 | 0.800.300.200.300.300.600.20 | 3442424 | 0.600.400.800.300.400.400.20 | | TOTAL | 1.00 | 3.60 | 2.70 | 3.10 | |
Based on the CPM, Estee Lauder obtained the highest score which is 3.60, followed by Procter & Gamble with 3.10 and Revlon with 2.70. As we see, when it comes to competition, we can say that Estee Lauder is very competitive. But, even though they’ve got the highest score, they should not be at ease. They should focus at the factors that they’re the lowest. For price, they should also cater those who can’t afford to buy their normal price of their product. Like the students who got their money through their allowances. And product lines, Estee Lauder should widen the line of the product they’re selling because each product has its own decline.

External Factor Evaluation Matrix

Key External Factors | Weight | Rating | Weighted Score | Opportunities | 1. Increasing numbers of people are buying products online for convenience, cost savings, and confidentiality. | 0.12 | 3 | 0.36 | 2. Men are increasing becoming more concerned with their looks and the stereotypes of men using skin care products are diminishing. | 0.10 | 4 | 0.40 | 3. Customers are demanding products not tested on animals and which are environmentally friendly. | 0.03 | 3 | 0.09 | 4. Customers are becoming more interested in herbal products that are derived from natural sources. | 0.10 | 4 | 0.40 | 5. Weak US Dollar makes US based products more affordable to customers in Canada and Europe. | .10 | 4 | 0.40 | Threats | 1. Many new startup companies with specialty products are created each year. | 0.10 | 2 | 0.20 | 2. Top competitors in the cosmetics industry are diversified with many brand names and a wide range of products. | 0.10 | 2 | 0.20 | 3. Products can be purchased at significantly lower cost over the Internet cutting into revenues and harming traditional distributors. | 0.10 | 1 | 0.10 | 4. Growing trend among sections of the population for a more natural look and reduction in their use of make up and related products. | 0.10 | 3 | 0.30 | 5. Customers tend to be extremely brand loyal. | 0.15 | 3 | 0.45 | TOTAL | 1.00 | | 2.9 |

According to this EFE Matrix, Estee Lauder weighted a 2.90 score. The weighted score indicates that the company’s response had a huge effect in its existing Opportunities and Threats in the Personal Products Industry. “Customers tend to be extremely brand loyal.” is the densest in all the factors because customers love their product, the quality they see and the benefit of it to them. The external factors are coping up, that which can affect the financial position of the company.

Internal Strengths 1. Wholly owned and operated offices in 43 countries and territories and products sold in over 135 countries. 2. Test products on animals only when required by law. 3. Estee Lauder operates under numerous brand names including Clinique, Origins, Bobbi Brown, Flirt! Among others. 4. Detailed succession plan in place for Fabrizo Freda to take over as CEO in March of 2010. 5. The company has global rights to products sold under several name brands including Tommy Hilfiger, Donna Karan, Missoni, and Sean John. 6. Company specializes in mid level and upper end cosmetics products; markets over 9,000 products. Internal Weaknesses 1. In 1990, 75 name palte department stores sold Estee Lauder; today that number is only 17. 2. Stock price has been stuck between $25 and $50 trading range since 1996. 3. Estee Lauder lacks a clear mission and vision statements. 4. Confusing organizational structure; it is unclear whether group residemts have control over the product lines or geographic areas. 5. Net sales of fragrance products decreased 4% to $21 billion as the company continues to struggle in this segment. 6. Company does not offer enough brand names tailored to lower budget consumers.

Internal Factor Evaluation Matrix

Key Internal Factors | Weight | Rating | Weighted Score | Strengths | 1. Wholly owned and operated offices in 43 countries and territories and products sold in over 135 countries. | 0.15 | 4 | .060 | 2. Test products on animals only when required by law. | 0.05 | 4 | 0.20 | 3. Estee Lauder operates under numerous brand names including Clinique, Origins, Bobbi Brown, Flirt! Among others. | 0.10 | 4 | 0.40 | 4. Detailed succession plan in place for Fabrizo Freda to take over as CEO in March of 2010. | 0.05 | 4 | 0.20 | 5. The company has global rights to products sold under several name brands including Tommy Hilfiger, Donna Karan, Missoni, and Sean John. | 0.10 | 4 | 0.40 | 6. Company specializes in mid level and upper end cosmetics products; markets over 9,000 products. | 0.05 | 4 | 0.20 | Weaknesses | 1. In 1990, 75 name palte department stores sold Estee Lauder; today that number is only 17. | 0.05 | 2 | 0.10 | 2. Stock price has been stuck between $25 and $50 trading range since 1996. | 0.15 | 1 | 0.15 | 3. Estee Lauder lacks a clear mission and vision statements. | 0.20 | 1 | 0.20 | 4. Confusing organizational structure; it is unclear whether group residents have control over the product lines or geographic areas. | 0.20 | 1 | 0.20 | 5. Net sales of fragrance products decreased 4% to $21 billion as the company continues to struggle in this segment. | 0.15 | 1 | 0.15 | 6. Company does not offer enough brand names tailored to lower budget consumers. | 0.10 | 2 | 0.20 | TOTAL | 1.00 | | 3.00 |

Shown in this table is a score of 3.00 which means that Estee Lauder has a good internal structure. The 0.60 score is because of the increasing number of stores in the world.

Strengths – Weaknesses – Opportunities – Threats (SWOT) Matrix SWOT MATRIX | Strengths | Weaknesses | | 1. Wholly owned and operated offices in 43 countries and territories and products sold in over 135 countries. 2. Test products on animals only when required by law. 3. Estee Lauder operates under numerous brand names including Clinique, Origins, Bobbi Brown, Flirt! Among others. 4. Detailed succession plan in place for Fabrizo Freda to take over as CEO in March of 2010. 5. The company has global rights to products sold under several name brands including Tommy Hilfiger, Donna Karan, Missoni, and Sean John. 6. Company specializes in mid level and upper end cosmetics products; markets over 9,000 products. | 1. In 1990, 75 name palte department stores sold Estee Lauder; today that number is only 17. 2. Stock price has been stuck between $25 and $50 trading range since 1996. 3. Estee Lauder lacks a clear mission and vision statements. 4. Confusing organizational structure; it is unclear whether group residemts have control over the product lines or geographic areas. 5. Net sales of fragrance products decreased 4% to $21 billion as the company continues to struggle in this segment. 6. Company does not offer enough brand names tailored to lower budget consumers. | Opportunities | SO Strategies | WO Strategies | 1. Increasing numbers of people are buying products online for convenience, cost savings, and confidentiality. 2. Men are increasingly becoming more concerned with their looks and stereotypes of men using skin care products are diminishing. 3. Customers are becoming more interested in herbal products that are derived from natural sources. 4. Customers are demanding products not tested on animals and which are environmentally friendly. 5. Weak US Dollar makes US based products more affordable to customers in Canada and Europe. | 1. Expand product offerings in foreign nations (S1, S6, O4). | 1. Continue to expand the respective brand name website and offer incentives to customers (W1, W3) 2. Introduce new fragrance products for men and boys (W5, W4). | Threats | ST Strategies | WT Strategies | 1. Many new startup companies with specialty products are created each year. 2. Top competitors in the cosmetics industry are diversified with many brand names and a wide range of products. 3. Products can be purchased at significantly lower cost over the Internet, harming revenues and traditional distributors. 4. Growing trend among sections of the population for a more natural look and reduction in their use of makeup and related products. 5. Customers tend to be extremely brand loyal. | 1. Offer rebates to compete with black and gray market distributors (S6, T5). 2. Market new soaps and skin care products that tailor to the natural look (S6, T4). | 1. Draft new vision and mission statement along with a new clearer corporate structure to compete with current competition (W3, W4, T3, T5). 2. Create a new line of products tailored to customers on smaller budgets ( W6, T3). |

Strategic Position and Action Evaluation (SPACE) Matrix Financial Strength 1. Return on Equity 2. Leverage 3. Liquidity 4. Income/ Employee 5. Inventory Turnover | 65522 | Rating4.0 | Industry Strength 1. Growth Potential 2. Financial Stability 3. Ease of Entry into Market 4. Resource Utilization 5. Profit Potential | 53446 | 4.4 | Environmental Stability 1. Rate of Inflation 2. Technological Changes 3. Price Elasticity of Demand 4. Competitive Pressure 5. Barriers to Entry into Market | -3-4-3-6-4 | -4.0 | Competitive Advantage 1. Market Share 2. Product Quality 3. Customer Loyalty 4. Technological know-how 5. Control Over Suppliers and Distributors | -1-1-2-1-4 | -1.8 |

x-axis : 4.4 + -1.8 = 2.6 y-axis : 4.0 + -4.-0 = 0.0

Competitive
Competitive
Defensive
Defensive
ES
ES
FSS
FSS
Aggressive
Aggressive
Conservative
Conservative

1
5
4
3
2
1

-5 -4 -3 -2 -1 1 2 3 4 5 6
-1
-2
-3
-4
-5

The graph shows that Estee Lauder is aggressive, meaning they are very competitive. All companies should be competitive if they want to stay in the market and to cater the needs of each customer, as well as to earn more profit. Boston Consulting Group (BCG) Matrix

Estee Lauder has a large market share in the fast growing industry. They generate cash and but because of fast growing market, they require huge investments to maintain their lead. Their net cash flow is modest. They are highly competitive in the industry.

Internal – External (IE) Matrix

The IFE Total Weighted Score Strong Average Weak 3.0 to 4.0 2.0 to 2.99 1.0 to 1.99 I | II | III | IVEstéeLauder | V | VI | VII | VIII | IX | High 3.0 to 3.99

Medium 2.0 to 2.99

Low 1.00 to 1.99

The EFE Total
Weighted Score

Market Penetration: Estee Lauder hasn’t tapped yet their potential consumers to purchase the product. Penetration of the product may increase their sales.

Grand Strategy Matrix

Rapid Market Growth
Rapid Market Growth

II I

Strong
Competitive
Position

C
Strong
Competitive
Position

C
Weak
Competitive
Position

C
Weak
Competitive
Position

C
Slow Market Growth
Slow Market Growth

III IV

Product and Market Development, Market Penetration, Backward Integration, Forward Integration, and Concentric Diversification.
Estee Lauder has focus on a single product and can go for related diversification strategy to minimize the risk related to limited product line.

Quantitative Strategic Planning Matrix (QSPM)

Strategic Alternatives | Key Internal Factors | Weight | Market Penetration | Market Development | Strengths | | AS | TAS | AS | TAS | 1. Wholly owned and operated offices in 43 countries and territories and products sold in over 135 countries. | 0.15 | 2 | 0.24 | 4 | 0.48 | 2. Test products on animals only when required by law. | 0.05 | | | | | 3. Estee Lauder operates under numerous brand names including Clinique, Origins, Bobbi Brown, Flirt! among others. | 0.10 | 3 | 0.30 | 4 | 0.40 | 4. Detailed succession plan in place for Fabrizo Freda to take over as CEO in March of 2010. | 0.05 | | | | | 5. The company has global rights to products sold under several name brands including Tommy Hilfiger, Donna Karan, Missoni, and Sean John. | 0.10 | 3 | 0.30 | 4 | 0.40 | 6. Company specializes in mid level and upper end cosmetics products; markets over 9,000 products. | 0.05 | 4 | 0.20 | 3 | 0.15 | Weaknesses | 1. In 1990, 75 name palte department stores sold Estee Lauder; today that number is only 17. | 0.05 | 2 | 0.20 | 3 | 0.30 | 2. Stock price has been stuck between $25 and $50 trading range since 1996. | 0.10 | | | | | 3. Estee Lauder lacks a clear mission and vision statements. | 0.10 | | | | | 4. Confusing organizational structure; it is unclear whether group residemts have control over the product lines or geographic areas. | 0.05 | | | | | 5. Net sales of fragrance products decreased 4% to $21 billion as the company continues to struggle in this segment. | 0.10 | | | | | 6. Company does not offer enough brand names tailored to lower budget consumers. | 0.10 | 4 | 0.20 | 2 | 0.10 | Subtotal | 1.00 | | 1.14 | | 1.83 |

Key Internal Factors | Weight | Market Penetration | Market Development | Opportunities | | AS | TAS | AS | TAS | 1. Increasing numbers of people are buying products online for convenience, cost savings, and confidentiality. | 0.12 | 2 | 0.24 | 4 | 0.48 | 2. Men are increasingly becoming more concerned with their looks and stereotypes of men using skin care products are diminishing. | 0.10 | 4 | 0.40 | 1 | 0.10 | 3. Customers are becoming more interested in herbal products that are derived from natural sources.. | 0.10 | 3 | 0.30 | 1 | 0.10 | 4. Customers are demanding products not tested on animals and which are environmentally friendly. | 0.03 | | | | | 5. Weak US Dollar makes US based products more affordable to customers in Canada and Europe. | 0.10 | 1 | 0.10 | 4 | 0.40 | Threats | 1. Many new startup companies with specialty products are created each year. | 0.10 | | | | | 2. Top competitors in the cosmetics industry are diversified with many brand names and a wide range of products. | 0.10 | | | | | 3. Products can be purchased at significantly lower cost over the Internet, harming revenues and traditional distributors. | 0.10 | | | | | 4. Growing trend among sections of the population for a more natural look and reduction in their use of make up and related products. | 0.10 | | | | | 5. Customers tend to be extremely brand loyal. | 0.15 | 4 | 0.6 | 1 | 0.15 | Subtotal | 1.00 | | 1.1 | | 1.23 |

Strategy Recommendation
Through this Quantitative Strategic Planning Matrix, we can see that in what areas are Estee Lauder should focus. The Market Development had the highest score, Estee Lauder is recommended to partner with much known companies to be able to increase their market share.

Strategy 1 – Market Penetration A. Expand Geographic Presence
Middle East and Asia had a rise of demand in terms of cosmetic products. Thus, it is good opportunity to take advantage of this scenario by having more presence in other countries including: advertising, promotions and other marketing communication mix.

Strategy 2 – Product Development A. Congruence with the Target Market
It’s essential to make product be align with the skin type of your market, whether it is for Asian, Caucasian and other skin types, with this, it allows you to penetrate a certain market easier and have the brand loyalty to the product since it best fits their skin type. B. Improve Operation and Service.
Develop operations and service to adopt customs. Like what I have aforementioned, for a certain product to proliferate, the advertising or penetration process is tedious and complicated, you have to know details and great familiarity with the market such as being culturally sensitive. This can entail large research development expenditures. In the clothing industry, the company will always pursue to build a healthier balance sheet and strong capital position by its substantial progress. Implementing this could improve to achieve the strategy. It can be involved a design that can create and organize plans and handle turn – downs on the next year.

C. Updating new fashion technology
Progressive researched in terms of product technology is necessary since it depicts maximization upgrades of product. It is aligned with the current needs and wants of the customers. Like using environmental material or ingredients that beneficial to the skin and to the environment itself. Thus, making your product to be as dynamic as it can be.

D. Utility of Resource
In the advent of Social media and e-commerce technology, it has paved way for business to be accessible and their market to be reached as far as they can without many constrain

Strategy 3 – Market Development Strategy
Involvement in selling present products and services in new markets and audience, this can be an investment for reaching out to other well – known company to increase market share, share growth and company profits. This can gain brand and company awareness with the other company alliances to create partnership or corporation with the company’s products and services.