INGLOT CASE STUDY
Order Instructions:
The assessment is the case “Inglot”.
You have been asked to prepare a report. In doing so you should address the following aspects:
1. Outline firm-level (micro) and country-level (macro) factors contributing to the development of INGLOT’s competitive advantages and discuss their sustainability.
2. Develop INGLOT’s strategic plan for the next five years with a concrete outline of recommended geographical expansion, business model evolution and product diversification.
Do not exceed 3000 words; scripts that are excessively long (i.e. exceeding the limit by more than 10%) will not be read beyond the point of the word limit. The word limit applies to the main report only, and excludes exhibits. There is no minimum word limit.
Note carefully that this is not a project, but a case analysis, and as such the case contains all the information available to answer the issues at stake. You should NOT study sources for recent information on the company such as its Report and Accounts or its website, its competitors or its industry. You may however consult academic books or papers on general approaches to treating aspects of analysis that you consider important. Please note carefully that if you copy text from such sources you must correctly reference the source, and clearly identify copied text by means of italics or inverted commas.
Please note the following general points on case analysis:
– As noted above, the principle of a case is that it contains all the information available to answer the issues at stake.
– It is traditional to open a paper with a quick summary of past events described in the case and to outline the current situation. Then you state the issues facing the company or the managers, as appropriate. Usually these issues are explicit in the case; if not, you have to identify them.
– Most business decisions must be based on both qualitative and quantitative considerations. Most case analyses require both (but there are exceptions, e.g. in finance or in organizational behaviour). You must dig into the data, not merely quote them from the case. Be critical. Push the numbers around. If there are insufficient data, make an intelligent and justified estimate.
– Remember, all the time you are focusing on the issues you have already announced at the beginning of the discussion or text. In that way, you can reach your recommendations and leave the reader satisfied that you have built your argument and justified your conclusions.
DO NOT PLAGIARISE – DO NOT USE EXTERNAL SOURCES
The overall structure should encompass:
1. Cover Page (1 page)
2 Table of Contents/List of Exhibits (1 page)
3. Executive Summary (1 page)
4. Main Report (respecting the above word limit)
5. Exhibits (if any)
6. References/Bibliography
The bibliography is an important element, and all references should relate specifically to points in the text, and be identified as such, and not simply “general” sources. Referencing should use the Harvard system.
Submissions are in WORD ONLY (.doc or .docx). Submit only one file and include any Excel analysis as images, not embedded files.
SAMPLE ANSWER
Table of contents
Executive summary………………………………………………………………………………3
Introduction …………………………………………………………………………………….4
Background of the company…………………………………………………………………….4
Firm-level (micro factors)……………………………………………………………………….4
Country level (Macro factors) …………………………………………………………………..7
INGLOT strategic plan for the next five years………………………………………………….10
Recommended geographical expansion…………………………………………………………11
Business model evolution ……………………………………………………………………….11
Product diversification……………………………………………………………………………12
Conclusion……………………………………………………………………………………….12
References ……………………………………………………………………………………….13
Executive summary
INGLOT Cosmetics Company located in Poland is one example of a company that started small and expanded. The company, which deals in cosmetics, has managed to grow and expand in various countries by investing back of its profits. The company has managed to maintain its markets niche in various countries and regions. The company micro-environment factors such as customers, competitors, distributors, media, suppliers and general public have played as key role in its expansion strategy The company values and embraces its customers. It designs and manufactures products that comply with the needs of the customers. This has played a key role in its success and its expansion to many countries
The company as well has gained a competitive advantage though its franchise strategy in reaching many customers spread across the county of its operations. The company takes time to analyze and research markets before making decision to invest in such markets. Macro environment factors have as well impacted on the company competitive advantage. Some of these macro environment factors include political factors, economic, social cultural competitive and technology. The company has enjoyed political stability in the countries it operates. This has influenced its business investments. It also complies with the legal aspects such as tax remittance and registration requirements.
The company as well has a strategic plan of five years whereby it aspires to expand its business to 110 countries. This strategy will enable the business to have a bigger market share. Through benchmarking, the company will be able to compete and with overtake its competitors. Product diversification as well opens an opportunity for the company to expand.
Introduction
Every company either locally or internationally endeavors to achieve its set objectives. Achieving objectives requires adoption of different strategies that can enable the company to gain competitive edge and take over bigger market share to accrue huge profits. Various factors and strategies come into play that contributes to business success. This report focuses of INGLOT cosmetic company. The report addresses the firms’ micro and macro factors that have contributed to its development of competitive advantage. It also covers on the sustainability of these factors. A strategic plan for the next five years with an outline of recommended geographical expansion, product diversification and business model are addressed.
Background of the company
The company founded 30 years ago in Przemysi town, as cosmetic firm has become one of the leading firms in colour cosmetics. It began its international expansion in 2006 and currently it operates franchises in more than 70 countries across the six continents (Marketline Plus, 2014). The company has about 500 boutiques stores retail locations and stands across the globe. The company has more than 1500 colors with 450 varieties to improve lips, 300 to portray ones face and 600 to enhance customers face and up to 400 shades of nail polishes (Marketline Plus, 2014). The company is performing well in the market due to its various strategies that it has implemented in its operations.
Firm-level (micro factors)
INGLOT is affected by micro-environment factor that have contributed to its competitive advantage. Micro-environment factors are immediate are operations that affect the company decision making freedom and performance. Some of these factors that are relevant to INGLOT cosmetics include, customers, competitors, distribution channel, general public and the suppliers, media and employees.
One of the major factors that have contributed to the company’s competitive advantage is customers. Customers are the major focus of the company successes (Klovienė 2012). Customers have contributed to greater height in the achievement of the company through their loyalty and support. The company has invested in their customers by providing products and services that meet the needs of the customers. The company identified the demand of the women products and this made them to take advantaged and to provide the same hence, achieving high profits. The fact that the company has invested a lot in improving its products has contributed to increased and widening customer base which is evidenced with its expansion initiatives (Marketline Plus, 2014).. The company has invested in innovation which has kept it ahead of its competitors in the market. For instance, the company manufactures revolutionary O2M Breathable Nail Enamel that used water and oxygen vapor permeability that is fashionable, good looking and healthier. This nail enamel has attracted many customers that have contributed to increased number of customers that are using the company products (Marketline Plus, 2014).
Competitors are other important micro-environment factors that have affected INGLOT cosmetic. Competitors compete for the same market share because they have similar or substitutes products. To overcome competitions, companies adapt to different strategies such as focus cost or differentiating strategies. Cost strategies allow a company to reduce the costs of its products or services to win over the competitors. Focus strategy, a company focus on a specific target market while differentiation strategy, a company provides quality products that meets the needs of the customers in the market. Such customers are not sensitive to the price of the products (Marketline Plus, 2014). Like many other industries, INGLOT has a number of competitors such as Halal cosmetics that are growing faster. INGLOT cosmetics has managed to attain its competitive advantage in the market because of its low cost strategy. The company offers its prices at low prices below the competitors. The prices offered provide mark up for the company because of the low production costs. The company has as well innovative and quality products that attract more customers to purchase the products.
Distribution channel is another micro-environment factor that has affected the company competitive advantage (Markman & Waldron 2014). The company has adopted franchise as its distribution strategy that has seen it expand and reach in many areas. This strategy has enabled the company to have a larger market share that has enabled it to remain competitive. The fact that the company products are easily accessible to its customers in various locations makes it accrue higher revenue through this wider market. The company has achieved this stride which has enabled it to provide stiff competition to other companies that have not been able to expand in their distribution networks (Marketline Plus, 2014). The company has well invested in its employees which have contributed to its competitive advantage. The company appreciates the contribution of employees. This has contributed to the success of the company. Employees receive training to help add value to the company
Suppliers as well contribute to the competitive advantage of the company. The company has established positive relationships with its suppliers and this has enabled the company to have smooth flow of materials that has enabled continuous production of these products. The media has as well contributed to greater magnitude to competitive advantage of the company. Media through its advertisement has enabled the company to improve its images and as well showcase its products. The market of the company has increased tremendously over the years through media advertising and marketing. (Marketline Plus, 2014). Media plays a key role as one of the channels for reaching and informing customers on the various products and services. The company has utilized the media platform making it more visible and famous compared to its competitors something that has elevated it and widened its market share. Public is yet another micro factor that has actually contributed to the success of the company. The members of the public have supported the company and portrayed it positively making it attains a positive image. These factors are sustainable as well have helped the company to sustain itself.
Country level (Macro factors)
Macro environmental factors are external factors that affect the operations of the business and may as well have impact on its competitive advantage. Any company that operates in a country across the borders on internationally level must ensure that they factor in these macro factors to be able to attain a competitive edge. INGLOT cosmetic is one of the companies affected with these micro-environment factors. These factors as well have a number of effects on its competitive advantages. Some of the micro-environment factors that affect the company include political-legal factors, economic factors, social cultural factors, competitive environment and technological factors.
Competitive environment affects the competitive advantage of the company (Toole & Lutz 2005). These factors include availability of competitive products, companies that compete for similar consumers, substitute products among many others. INGLOT cosmetics is operating in a competitive environment with other similar companies that have already established their market niche in various locations. These companies have as well substitute products that they sell to the consumers which reduces the number of consumers that purchase INGLOT cosmetic products. INGLOT is not a monopoly and that is the reason why it has adopted cost strategies to woo many customers and compete in the market both locally and internationally. To develop a competitive strategy, the company undertakes research of the markets to identify their suitability. The company as well through market research identifies current and potential competitors, which enables it to adopt to appropriate marketing strategies. The facts that the company anticipates competitive actions has as well enabled it to vigilant and to promote innovations by coming up with new products that makes it to compete favorably.
Political- legal environment as well affects the operations and competitive advantage of INGLOT cosmetics company (Markman & Waldron 2014). Business operates in an environment that has laws and regulations that they need to comply. Businesses are as well expected to interpret these laws and ensure that they adhere to them as they as well protect the rights of the consumers. Any company is expected to register and to have a certificate of operation both locally and internationally. The company is as well expected to remit its tax returns and adhere to any other laws relating to labor laws and environmental laws among many others. INGLOT cosmetics operate in different countries that have different political and legal environments. The company, nevertheless, has satisfied all these laws and legislations pertaining to particular nations they operate in. Furthermore, the political stability of a country affects the profitability of the business. So far, INGLOT cosmetics has been able to extend its products in countries that experiences political stability. This has made the company to have conducive environment of investment something that has contributed a lot to its increased level of investment (Marketline Plus, 2014).
Various institutions ensure that the company operates well and does not deviate from the activities or business initiatives they are registered to operate. These bodies includes the government which provides licenses and ensure compliance with the law and issues to do with tax remittance and labor laws. Others include consumer safety that ensures that the products meet the recommended standards for consumers. Products should not cause harm to the consumers. Other bodies include, environmental protection agency that concerns with issues of environment, health and safety and consumers interest groups among many others. These bodies work independently to ensure that the company operates within the set thresholds.
Economic environment as well affects the competitive advantage of the INGLOT cosmetic company. Economic factors influence the buying behaviors of the consumers. Their buying power and strategies is dependent on the economic situation of the country. Different countries experience different economic growth trends as some experience growth while others experience slow growth. Such dynamics affects the operations and profitability of the country. The stages of business cycle in these countries vary from one country to another and as well affect their business performances. Inflation rates in the country as well have negative impacts on the company products. During inflation, the company experiences decline in its profitability. Deflation as well has impacts on the performance of the business the level of unemployment as well affects the capability of the consumers to purchase these products. (Marketline Plus, 2014). High level of employment means that consumers have higher level of incomes and can be able to access these products. This therefore impacts positively on the company level of profitability. and vice versa. The resources available in the company as well affect the performance of the INGLOT cosmetics company. Currency fluctuations and exchange rates in these countries vary as well have impacts on the company profitability. Some of the currencies depreciate and this affects the profitability of the company as they incur some losses.
Technological factors as well affect the operations of the company as well as its competitive advantage. INGLOT cosmetics has adopted technology by adopting to e-shop . This has enabled the company to be creative and innovative reaching many of its customers in various places. The company has therefore adopted technology to sell its products as well as to market its products to customers in various locations through technology hence being able to achieve a competitive edge (Marketline Plus, 2014). Technology as well has improved the services and products as this has led to effectiveness and efficiency in the production process. Compliance has as well improved with technology making the company to operate smoothly.
Socio-cultural factors as well affect the competitive advantage of the company. The company understands the dynamics of operating in the various regions and therefore, they ensure that they adopt to suitable strategies that the particular customers in a certain region or country want. This is achieved through modification of their products as well as strategies. For instance, in their advertisements, the company uses languages that customers in the targets markets understand. This ensures that their communication reaches the intended audiences. The company as wells keeps into consideration the customers, and manners, material culture, social institutions, religions among many others in their promotional strategies to win over their customers. these factors are sustains the company and have enabled it reach this far.
INGLOT strategic plan for the next five years
In the next five years, the company wants to achieve set objectives. To achieve these objectives it must have a strategic plan that acts as a framework. The plan provides the target sales outcomes and the strategies the company wants to adopt to achieve the same.
One of the strategies is to establish positive relationship with the stakeholders including suppliers, government and retail outlets to compete favorably. another strategy is to expand to other 40 countries by the year 2019 this expansion strategy will see the company cover a wider market share. The company will also use internet and media to advertise the products to consumers. The company believes that information is paramount in ensuring that people makes purchasing decision (Marketline Plus, 2014). The company as well aims to reduce the cost of productions by recycling its raw materials. This will enable the company to accrue high profits through its low cost strategies. Furthermore, the company will use celebrities in its promotions to gain a huge market. This will help the company to reach many customers. The fact that the company is a cosmetic company makes it easier and viable to use celebrities to reach many people.
Recommended geographical expansion
In the company expansions strategy, it must factor into consideration various factors such as the culture, of the markets, the number of competitors in the market, the size of the market, the cost of distribution, the political environment among many others. These factors are critical because they will determine the competitive advantage of the company in the region. The company intends to expand to more than 110 countries across the globe to make the total number of countries that it operates to be 110. The countries cut across the six contents more so in the Africa, Middle East and the South American continents. These markets have not been explored and therefore, the company stands a chance to accrue huge profits from its operations in the region.
Business model evolution
The business model to be adopted is benchmarking whereby products and process are going to be measured against those of other organizations. INGLOT will therefore be able to gain insights on its performance through this comparison. It will gain information on its internal and external performance of its products in line with those of their companies. INGLOT will have an opportunity to search for the best practices that will enable it to record superior performance levels (Denrell 2005). The company will achieve a strategic advantage, as it will focus on its critical capabilities to develop a strategic advantage. Though benchmarking the company will as well increase its learning rate hence facilitating its experience sharing (Jack 2004).
Product diversification
The company will also adopt a strategy of product diversification to ensure that it achieves a competitive edge. The company even though has various products; it will still improve in its innovations to ensure that it remains competitive. The customers will have numerous options to choose form the company products.
Conclusion
INGLOT cosmetics is one of the companies that has managed to attain a competitive advantage through its strategies that it has adopted. The company managed to grow and expand to various countries. Various micro and macro factors affect the company competitive advantage. The company still has to adopt other strategies such as product diversification to expand to other regions to maximize its profits. The future of the company looks bright
Reference list
Denrell, J 2005, ‘Selection Bias and the Perils of Benchmarking’, Harvard Business Review, pp. 114-119.
Jack, B 2004, ‘Quality Essentials: A Reference Guide from A to Z’, ASQ Quality Press, pp. 8–9.
Klovienė, L 2012, ‘Institutional factors as criteria for business environment identification’, Economics & Management, Vol. 17 no. 4, pp. 1245-1251.
Markman, G, & Waldron, T 2014, ‘ Small entrants and large incumbents: a framework of micro entry’, Academy of Management Perspectives, Vol. 28 no. 2, pp. 179-197.
Marketline Plus. 2014, Inglot Cosmetics. Inglot Cosmetics – How a Small Firm with Vision Successfully Challenged Established Business Rules, pp. 1-25
Toole, J, & Lutz, J 2005, ‘Trade Policies of the Former Centrally Planned Economies’, Global Economy Journal, Vol. 5 no. 3, pp. 1-21.
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