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Transcript of SEPHORA STRATEGY
Founded in France in 1970
broad range of product categories
More than 100 brands
1300 stores, 30 countries
In 2005 the first Sephora’s store was opened in Spain
fragrance collection with Mary-Kate and Ashley Olsen, and make-up line with Marc Jacobs
different price segments. different types of stores
brand colors: black & red
€ 1, 5 billion
More than 10000 employees
29% of business of LVMH
engaged in charity
Innovative Objectives (Oslo Manual)
Competition, demand and markets:
increased ranges of goods and servces, standarts for eco-friendly cosmetics, increased market share, new markets,increased stores' visibility
Production and delivery
: flexibility of products and services provision, incresed capacity of products provision, changed sales policy, reduced operation costs and labor costs, improved IT capabilities
connection among different nbusiness activities (network, partners), knowledge sharing, increased the ability to adapt different client demands, strong relationships with customers
Freeman’s Classification Proactive strategy:
Offensive R&D: wide innovative range of services
High risk innovation (My Beauty Bag, Color ID)
High profitability potential (support from LVMH business group)
Innovation Strategy Formulation
Description of the innovation process
a particular project...
This project was conceived in order to offer the client a “quality fast food” nails polish service. But the biggest difference is that you can get a quick manicure in Sephora’s stores at a really competitive price.
factors hampering the innovation process...
1. Idea (I+D department)
2. Development (In-store place to set up the idea and collaborations)
3. Prototype (First stores in Manhattan & San Francisco)
4. Production (Good results, spread it out in Europe and in North America)
4.2 Hampering factors
Difficulty in entering in Asian markets
Problems to open new stores due to the crisis itself.
The competitors in the market like Marionnaud or Mac
It is a mixed structure and it consist of a divisional structure (which includes the different countries in which it is operating) and a structure by functions that is specific to each country.
The advantages and disadvantages of the matrix structure are:
Higher capacity to face complexity, uncertainty and change.
It facilitates ideas exchange. Inter-function communication improves. It integrates knowledge.
Participative decision-making. It facilitates learning.
Risk of conflict between managers
Unclear job and task responsibilities
Unclear cost and profit responsibilitie
Innovation Strategy Implementation
driven by customers and competitors
collect and analyse data about customers
accurately target different segments
provide relevant information
interlocking network: in stores+ mobile app+ web-site
market opportunities to get e benefits, to renew and rejuvenete the firm
doesn't stop the optimization and innovation developments
Interner growing strategy: e-commerce
Clients are the most important part of a company in order to innovate; without them, innovation makes no sense.
Workers are a key part of the structure, as they work as “the link” between the clients’ feedback and the information which goes to the “decision makers”.
The job a middle employee does is not only related to its tasks; it’s related to how they can facilitate the “triggers” to develop new innovative ideas within the company. And those ideas can be the beginning of new services, new products and so on.
Most of all we have learnt that an innovative process takes time, money and other costs like opportunity costs when we are developing an idea. We have to establish the idea, then look if it’s feasible, try it after that (to see how people react facing it) and, then and only then, put it into the market
innovation strategy formulation and analysis of innovation objectives
analysis of on particular project of the company
innovation strategy implementation
My Beauty Bag
(virtual make-up bag):
collect and organize favorute products
keep track of online and in-store purchases
purchases+ "loves" parts
(scanning technology): helps customer to find a shade of make-up that matches their skin tone.
Our company is a global company that belongs to a group of enterprises. We have two organizational structures: one of the own Sephora and another of the enterprise group to which it belongs. We will focus on the Sephora structure.
Sephora is located around the world but is based in Paris (FRANCE) and from there, the Sephoras of the different countries in which it operates are managed.
The organization chart would be like this:
Organizational Learning Capability (OLC)
In this sense Sephora is a quite safe company. Usually it doesn’t take too many risks. It has a range of own products and also it sells another brands. The share of the other brands is a sure sale. The "risky" part of their activity has been take its own product line, but even so the quality of the products is quite reasonable and the price is affordable and it is proven that this range of products sell very well and consumers (mostly women) like it. It was a very studied and safe decision.
Participative decision making:
as we have previously pointed out, the relationships in our company are very clear, simple and sharp, very hierarchical. Decision are made by the managers of each department. It is not a participatory process that involved workers and contribute ideas.
We can conclude that the OLC our company has more strengths, where is best developed, such as Experimentation and Interaction with the External Environment and others that is weaker, as Participation in the decision process and the internal Dialogue and it should work to obtain better results in its OLC.