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Free Toiletries and Cosmetics Industry Essay Sample

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SWOT analysis is a planning procedure used to evaluate the industry's strengths, weaknesses, opportunities and threats. The Toiletries and, Cosmetics industry faces a large number of strengths and opportunities. The industry has growth opportunities and threats especially to individual firms as the competition increases.

Industry SWOT Analysis

Major strengths of this industry cut among a number of the principal industry players are such as high responsiveness to customer needs and wants. This large capital base enhances worldwide presence and factors of production such as costs of inputs, nearness to requisite raw materials and the ability to adjust plans and means of production applied.

The ability of individual firms to change footing incase of a problem acts as a major strengths in times of crisis or harsh times such as a recession. Other strengths arise from factors peculiar to trade. Also, marketing decisions, advertising, clever targeting of consumers from certain geographical locations with their products. “Sales were bolstered by healthy demand across all product categories and geographic regions, with a particularly strong showing in travel retail and emerging markets” (Nugent, 2011).

Inadequacy of capital to conduct enough research into newer methods of production, customer preferences and factors that would affect types of products needed in different areas is one weakness that many forms face especially new entrants into the market. Promotions to boost sales in certain areas with potential may also be negatively affected by inadequate capital.

Poor managerial skills on the part of management may also prove detrimental to the success of a firm. Main areas that offer opportunities for growth in the industry include among others baby products, anti-ageing and dermatological products, sun-care and men’s grooming products. The demand for natural and organic cosmetics also keeps rising as health concerns become a priority of most people.

Beauty salons and health spas are another growing area which offers an opportunity for both existing businesses and new entrants into the industry. These salons and spas expand to become a leading health and beauty centers all over the world. The cosmetic companies are leading with various investments that had a high initial capital outlay

January-February 1963, Joseph E. North, the Cosmetics and Toiletries Industry Threats are mainly factors such as competition which is a weighty one as the market continues to broaden, defamation by competitors aimed at gaining an extra market niche for themselves at the expense of their competitor firms.

Strengths

High responsiveness to customer needs.

The industry ensures timely delivery of services and quality products.  It has the  many available distribution centers where customers can easily get the products that they need.

The presences of trade peculiar factors

 The industry offers competitive packaging of products in order to cushion itself against market uncertainties as it offers the most popular products like the Clinique in the internet gaining a greater awareness in to the market.

Opportunities

Demand for men’s grooming products.

There is an increase in demand for men’s products thus placing the industry at an advantage. . “Both the age LOC Galvanic Body Spa system and age LOC R2 were developed utilizing Nu Skin's proprietary age LOC science that enables the company to identify unique groups of genes specific to the aging process, called Youth Gene Clusters, and then target and reset them to more youthful patterns of activity” (Economics & Business Week 2012).

Health spas and beauty spas

Due an increase of health awareness the demand of the above product has gone high. “Sales were bolstered by healthy demand across all product categories and geographic regions, with a particularly strong showing in travel retail and emerging markets” (Nugent, 2011).

Weaknesses

Inadequacy of capital

The industry has inadequate capital to finance its undertakings and other budgetary projections. Due to the high inflation rate the industry is facing  financial crisis. “In fiscal 2011, the Europe/Middle East/Africa region represented 37% of net sales and 57% of operating income”(2011).

Poor management

There is mismanagement of resources and misappropriation of funds by the management. Also, the managerial skills are inadequate to cater for the industry needs.

Threats

Competition

The industry faces stiff competition from counterfeit products, new market entries and, other companies offering similar products at a lower price. “Even the firm's products category sales remained the same during turmoil in retail markets, with its skin care and makeup businesses together generating about 80% of its overall revenue since 2008” (Colbert, 2011).

Defamation

Other competitors spoil the industry’s image through false accusations thus; spoiling the industry’s reputation in the market.  This industry has a diversity of product such as anti aging products, shaping gel and the new nutritional supplement in the market. This makes its competitors to base that these products have future negative side effects while is not true (Seale, 2010).

Conclusion

The future of the industry is such that many firms are and will continue to turn towards natural and organic toiletries and cosmetics. This is in response to customer needs and, preferences which creates health awareness on the ingredients used and, their effectiveness, as opposed to the cost. Mergers and alliances between or among both large and small companies continue to become a popular trend.

Companies such as Nu Skin Enterprises and, The Estee Lauder Companies Inc. prove to be a suitable investment choice. Their past performance, current planning and, goals have promising rewards for potential investors.

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