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strategic analysis - lush

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by

Louise Pitt

on 30 June 2016

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Transcript of strategic analysis - lush

Background
Lush cosmetics was founded in Poole, Dorset, UK, Mark Constantine and Liz Weir (the creator of the bath bomb) , in 1995. After meeting in a hair and beauty salon they decided to create their own business specialising in natural hair and beauty products, a £282.5 million business idea (2014).
Compactions after selling their products to the body shop prevented them from opening up their own business for five years, however they did start up there own successful mail order company called "cosmetics-to-go"but the company ended up burning up.
Swot Analysis
Industry Life Cycle
strategic analysis of lush cosmetics
The Original Store in Poole
PESTEL Analysis
Political Factors
Strengths
Weakness
Opportunity
Threat
Economic Factors
Environmantal Factors
Social Factors
Technological Factors
Legal Factors
well known
great reputation
high brand loyalty
highly ethical - more appealing to customers
USP- cruelty free, and fresh produce
growing competition (less and less companies testing on animals)
have to charge high prices to maintain a profit margin
online presence isn't well known
increase online sales
improve the online shopping experience
an increase of advertising to improve the awareness of the ethic advantages.
there is already a lot of online competition
as more and more companies are becoming cruelty free, there is a lot more competition.
Mission Aims and Objectives
Bowman's Strategy Clock
Waste and Recycling
in the packaging that they use 89% of of it is recycled.
the pots and bottles used to hold shower gels,face masks, moisturisers etc are made with 100% post consumer recycled plastic, saving on the amount of carbon dioxide (65 tonnes), never used before plastic (90 tonnes), and oil (800 barrels) per year
The carrier bags are made with consumer recycled paper, saving 100 tonnes of carbon dioxide per year. Thee has also been a reduce in weight by 2 grams which has reduced emissions.
The gifts sold are packed with recycled paper and are then protected using Ecoflow (potato starch) and is 100% biodegradable.
the gift boxed use packed with a biodegradable filler
Energy
They're an anti frackng company, and they choose who they buy they're energy from carefully as to not support fracking companies
water
This is what I believe Lush Cosmetics' strategic clock would look like, the reason why I think they would fall into differentiation is that they aim to offer customers the highest level of perceived added value. I believe they would fall into position 5 as they are one of the luxury brands in terms of bath bombs, as well as his theyre cosmetic products are very highly priced, this is why i believe they would fall into position 6. As a result of Lush being in position 6 we see an increase in the amount of people buying bath bombs from other high street stores who have branched into this, as well as an increase in trends of buying cruelty free cosmetics.
Lush saves 450,000 liters of water each year from selling shampoo bars globally.

Raw Materials
they go out of their way to only use sustainable materials
all of their products are biodegradable
none of their products contain synthetics
Market Map
High Quality
Low Quality
low price
high price
Lush
the body shop
Over time we can see that sales are increasing and lush is therefore either in the growth stage or the maturity stage of their industry life cycle.
At Lush, they believe that they should pay a fair tax in each of the countries in which we operate. They will take advantage of legitimate business tax structures and benefits available in each country – but they will never search for loopholes or devise schemes that stretch the rules beyond their obvious intended purpose.
references
https://uk.lush.com/article/company-tax-policy
“Skin care is the winner and the only category to show growth during the recession, averaging 4%. However, this compares to only 1% growth for hair care and a decline for fragrance,” meaning that even during the recession they were still a profitable business.
http://www.cosmeticsbusiness.com/technical/article_page/incosmetics_marketing_trends__a_time_for_recovery/55120
Lush are making use of their e-commerce by allowing the customers to buy there products through their online website.
In china its illegal to sell cosmetic products without testing on animals, however lush has a strict no animal testing rule, this would effect their sales in china.
Lush don't use a sweat shops to make there products, but would still be effected my labour laws, eg minimum wage and working conditions.
http://www.vault.com/company-profiles/retail/lvmh-mo%C3%ABt-hennessy-louis-vuitton-sa/company-overview.aspx
LVMH
Derma Nova
Ansoff Matrix
http://www.slideshare.net/ismailre/assignment-marketing-3-mar303docx

Summary
South America has as a whole undergone rapid economic development lately meaning that lush have been more able to sell there products here.
http://www.mapsofworld.com/south-america/economy/
In summary, lush is clearly a highly profitable business that is still growing, with the introduction of new products every month they make sure that there is always something new to impress the customers with every shopping experience. As well as being a highly profitable business, they are also highly ethical with regards to the environment, from there strict no animal testing policies, all the way to their biodegradable packaging, its clear that lush is a company who cares.
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