Power point presentation

Part I – Evaluating Sustainability business model opportunities

Clear Essence Cosmetics/ Bluefield Associates Inc. Five Forces

1) Threat of New Entrants:

· The cosmetics industry has a high threat of new entrants. Entering the market in Morocco Africa will be extremely easy because most of the products that are sold in Morocco are international and expensive.

2) Bargaining Power of Vendors:

· Clear Essence Cosmetics & BlueField suppliers have a high bargaining power due to the fact that the demand for cosmetics is high in the African market.

3) Bargaining Power of Customer:

· Bargaining power of customers is high due to up abundance of upcoming cosmetics and home cosmetics that could be easily made at home.

4) Rivalry Among Firms:

· Rivalry among existing competitors is high within cosmetics industry. Clear Essence Cosmetics & BlueField operated in with major competitors such as international brands and upcoming local brands.

5) Power of Substitutes:

· There is a high power of substitutes because it very easy to create the same cosmetic product at home or find the same cosmetic product online for a cheaper price.

Value Net Analysis

Malee, llera, Apothecary, Ajali handmade naturals, soil sa vane and fricology are the following cosmetics brands share the same target market by offering a similar product or service. They all provide natural handmade skincare product created in Africa for ethnic skin. The Clear Essence Cosmetics & BlueField will have local farmers (suppliers) that will provide all organic ingredients. As for the complementors the Clear Essence Cosmetics & BlueField will provide small bundle for different types of skins. For instance if a customer has extreme dry skin the bundle will come with a serum, lotion and toner that will be formulated to their skin. Lastly, we are targeting female and male who have sensitive skin.

Market Structure

The cosmetic industry has a huge amount of firms along with thousands of brands that sell differentiated cosmetics products to consumers and certain degree of control over pricing. Therefore, the market structure is monopolistic competition.

Environmental Analysis (Qin Shen)

Marketers all over the world from different industry are known to use similar marketing strategy to capture the market of their interests (Farah et al., 2002). Marketing environment is greatly affected by several factors that include; STEEP of marketing is greatly affected by the production environment in which the company is operating. This article will create an environmental analysis of Clear Essence Cosmetics/ BlueField Associates Inc. The article will focus on the cosmetic industry in Morocco, and the analysis will be lined to sustainability-related STEEP and Competitive Moves in the Moroccan cosmetic industry.

Social factors

Trends are shifting to the importance of skin protection and social media leading consumers to care about the way they look, feel, and smell. In society women are pressured to look beautiful which explains the growth in demand for cosmetics and skin care products.

Technological factors

With technology enhancing every year in Africa, this will help Clear Essence/ BlueField Inc. innovate new skincare products. Also using social media can help the company by overseeing the newest trends online.

Ecological factors

The Ecological factors are pollution of the water supplies due to dumping of raw sewage along with coastal waters have been polluted by oils. This will have a negative impact on obtaining natural ingredients for their products.

Economic factors and trends

Africa has a growing economy of middle-class consumers which is driving the demand for cosmetics products in the beauty and skin care markets. African women have more spending power due to higher education therefore allowing women to pursue promising careers and illustrate purchasing power.

Competitive Moves Analysis

Just like any other companies in the cosmetic industry in Morocco, Clear Essence Cosmetics Company has been forced to come up with marketing strategies that have helped the company strive in the industry market (Farah et al., 2002). The company has had to invest in cheap cosmetic products so as to increase its sales and maximize profits. The company has embarked of extensive advertisement and promotion of its products to create awareness and has invested heavily in natural cosmetic products so as to earn a large market share

Market Opportunities for Alternative Business Models

Clear Essence Cosmetics in Morocco is a global cosmetics firm offering various cosmetics products to the customers. The company is able to gather its market opportunities using various marketing aspects such as generic business strategies, blue ocean strategy, and value canvass tools. Firstly, in the generic plans the firm entirely applies three aspects to gain big pool of customers for the products. In cost leadership, the firm is able to offer products to the customers at lower prices than the other competing firms in the market although the competition is not that rampant. For this reason, the firm is able to take full regulations in pricing of the commodities. Additionally, the company is able to offer cosmetics to the customers depending on their needs through differentiation plans. In the end, the firm is dominating the cosmetics industry in the country.

In Morocco, there are few cosmetic firms operating. We can say that the competition levels are not that high and therefore, the pricing mechanism is not that strict. For this reason, the firm is able to set low prices on the commodities for easy affordable by the customers. In some instances, the firm is able to make improvement in the products. This demonstrates how blue ocean strategic plan is helping in gaining marketing opportunities. On the other hand, the firm is in a position to understand the customer's’ needs in concern to the cosmetics. This has enabled the firm to achieve large market share in the cosmetics market within the country.

In contrast to generic business strategies, blue ocean strategy that aims at establishing new value chains, promoting its cash flows, liquidity and profitability. Blue ocean strategy entails undertaking a market research for existence of market gaps in new locations with the aim of overcoming competition from the current and already saturated markets. It is in the spirit of blue ocean strategy that the company is venturing into the new market in Morocco. The benefits this strategy to the company will include enhancement of its value proposition through unlocking of new demand for its product. part of the blue ocean strategy applied in Morocco. Strategies like product penetration to the new Market in Morocco, pricing, choice of locations, brand name and product promotion through marketing exercised at home will constitute part of the blue ocean strategy that aims at positioning the business in the new market in a manner that overcomes competition.

Reduce- minimizing environmental impact. For example, ensuring that our packaging is recyclable. In addition, this will reduce our cost on packaging as environmentally-conscious customers will recycle their packaging every time they purchase new products. We will keep our quality the same, but lower our prices, take a lower profit margin to get our foot in the door and get a lot of customers and then once we have that established we can slowly increase our profit margin. The reduction in costs, given by our new packaging strategy, will allow us to lower prices and maintain profit margins.

Eliminate – Take all chemicals ingredients out. We are planning to use argan oil in our products, since its very poplar nowadays, especially in morocco. Many competing international firms are slowly becoming more and more organic in the ingredients they use in their products. The examples are many. For instance, Sephora, well-known cosmetics distributer, is slowly launching new product lines that are chemical-free. Another example would be Clinique, the cosmetic firm that prides itself for producing natural products. Nowadays, consumers are becoming more aware about the side effects caused by chemical ingredients, therefore, they look for organic and natural alternatives.

Raise- raise our reputation by utilizing the social media platform. With social media becoming as popular as it is nowadays, it is becoming more appealing to use its channels for marketing. Marketing also entails raising awareness about how our products are changing to accommodate the changes in consumer demands. An example would be to have a YouTube channel where customer can upload their videos from using our products. In this case, we are employing the power of the crowed to our advantage.

Create – mobile applications have become very popular. Consumers now are very connected and attached to their mobile devices. Hence, we plan to utilize this advantage to create a mobile application for our organization. The mobile application will aim to make it more convenient for consumers to shop and perform different tasks right from their mobile devices. A breakthrough example would be to pair a skin-reading device to help consumers do skin test via our app and provide automated suggestions. The app can also feature make up training sessions, beauty salon locator, and location-based recommendations (near beaches, sunny cities, etc.)

For network exchange, plan to establish and nurture strong bond with distributors and retailers. We plan to contract with local beauty salons to retail our products. A successful example of this utilization would be the Paul Mitchell products sold at every SuperCuts salon. Paul Mitchell relies on stylists to market their products. In addition, we will improve our website to increase online sales and provide different perks for loyal customers such as subscription discounts, bundling, and use data mining to improve website personalization.

Competitor Analysis

Clear Essence Cosmetics has partnered under Bluefield Associates to become a growing player in the cosmetic industry. Looking to expand its products to Morocco, Africa; Clear Essence Cosmetics must first observe the competition. A competitor’s analysis of the market’s industry leaders will assist in understanding the functional strategies driving competitors success. First we should understand the target market we are entering before we can begin to look at the competitors. Skin care is a growing industry in Africa, with projected market growth at 9% the door will open for many cosmetic firms to establish a presence in Africa. The market is driven by the growing middle-class locals, which has tripled in size in the past 3 years. Now that we know we are in the midst of a growing and booming economy we can take a deeper look into the top competitors to illustrate their strengths to continue to strive and grow in the skin care market. There are 3 key vendors operating in Africa currently. L’Oreal, Procter & Gamble, and Unilever. Let’s take L’Oreal for example because they have tapped into the Moroccan territory in which we are looking to expand into. In conducting a 9 M analysis on L’Oreal, some key points stood out. L’Oreal has managed to gain a leading position in the market with a 20% value share with strong presence across premium and mass segments of the market. L’Oreal has accomplished it’s lead by knowing the target market. They were the first to take action in Ethnic hair and skin research both here in the States and in Africa. L’Oreal has taken an action to understand their products and recently has taken initiative to understand African skin and hair specialties. They have also partnered with Kenya Associate dermatologists to boost understanding and strong connections through African Skin & Hair workshops. This interaction allows L’Oreal to gain first hand knowledge of what type of products their clients want. With fake hair and skin products on the rise in Africa claiming to moisturize and add nutrients to skin and hair, clients are willing to spend a little more money on a loyal product that actually works.

Key Insights

The cosmetic industry in Africa shows promising growth with consumers now placing cosmetic care on the same standing as other lifestyle essentials. With the opportunity for growth in the cosmetics industry in the African region (more specifically the Moroccan region), Clear Essence Cosmetics needs to find a way to differentiate themselves from the high volume of substitutes that are available in the cosmetics industry. Premium cosmetic products are on the rise globally over generic and low-end products. In order to establish themselves as a high quality brand to new customers, Clear Essence Cosmetics should have not only affordable products that will allow the majority of consumers to purchase and experience their products, but they should also offer a premium line of products that will allow them to have a premium status over their competitors. The electronic industry in the Moroccan region is also growing, and because of that, Clear Essence Cosmetics also needs to establish a well developed online presence to draw in as many potential consumers as possible.

Part II – Evaluating Capability readiness of the firm

Capability Readiness

Purpose of the analyses

The purpose of this analysis is to evaluate the capability and readiness of Clear Essence Cosmetics into a highly competitive, growing market of skin care products in Africa. A value analysis of our core competencies and dynamic capabilities using product stream, custom solutions and network exchange approaches will illustrate the value Clear Essence can offer to the health and beauty market. We will identify foundations of having home advantage using the diamond analysis strategy. Looking deeper into the health and beauty market a growth strategy will be observed with emphasis on motivations, alternatives and risk for growth. Our analysis will touch on the possibility of a collaborative and acquisitions strategy to highlight motivations, alternatives, and risks of collaborations or acquisitions to lead to growth within the market. Finally a summarization of key highlights and insights will round off our capability analysis for Clear Essence Cosmetics venture into the Moroccan market.

Value Analysis

Existence of differentiated product streams based on tastes and preferences of existing and potential customer base has been critical in diversifying the company’s revenue drivers. Venturing into the new target market in Morocco, the company will continue to use new technology to innovate and design dynamic products with the aim of even differentiating its products further so that they meet the ever-evolving needs of customers. The company believes in holistic customer care and quality service delivery. To maintain its competitive advantage both in the current and in the new market in Morocco, the company plans to expand the existing network exchange approach in collecting customer sentiment about its products. The existing approaches of collecting feedback from customers via the company’s website, Facebook and Twitter platform will be boosted by creation of a survey that will be send to customer’s phone numbers and email addresses asking them to rate the level of satisfaction with the products. They would also be required to give opinion on what should be done in order to enhance service delivery and customer satisfaction.

Home advantage

The company enjoys numerous merits that will be transferred to the new business channel in Morocco. They range from multi-lingual capabilities, which will enable communication in a number of languages with customers, as well as highly skilled and surplus workforce. The home advantage can best be described using Porter’s Diamond Framework for National Competitive Advantage. The framework exhibits four universal factors that apply to most markets. The first factor is company strategy, structure, and rivalry. The company’s strategy is to achieve continuous steady growth in the region. The company established good robustness to withstand rivalry. The second factor is demand conditions. The company operates in a market that has high demand on cosmetic products. The third factor referred to as factor conditions. This factor is really important in analyzing the home advantage for most organizations. In our case, the company is taking advantage of Morocco’s natural resources that make essential raw materials for cosmetic production. In addition, Morocco is well-known for its superior quality Argan oil, which increases the home advantage for the company. The company also enjoys abundance of raw materials and unrivaled technology. Lastly, is related and supporting industries. The last factor refers to the availability of domestic supply and distribution chains. The company is well-positioned in the Moroccan market and has established unique supply and distribution chains. This advantage helps the company design and distribute products that are unique, competitive, and generate higher demands. The internal control mechanisms are so efficient that the company is able to overcome most of the risks that may negatively affect operations.

Growth strategy

For businesses to sustain themselves and at the same time remain very profitable, there is always a need to have a growth strategy. Growth strategy performs a major role in ensuring the business expands and gains profits as much as possible. There are different types of growth strategies which can be used by organizations, but this depends on several factors that must be considered. The cosmetics industry especially in Africa is on the rise with much focus being put in the East African countries such as Kenya and Uganda, West African countries such as Nigeria, North African countries and also South Africa. Morocco has been the home of several beauty products including the famous Argan Oil which is indigenous in this region. Argan Oil played a major role in bringing Morocco to the global cosmetics world (Lybbert, Barrett & Narjisse, 2002).

The major growth strategy in which Morocco has been using is market expansion. Argan Oil is one of its kind and has performed a major role in providing unique components required by the skin. In addition to this, Argan Oil is purely organic and therefore does not have any chemical components that may end up affecting the body skin of the users. To therefore grow the business, market expansion to the different parts of the world has been key having deep understanding that there is a great need for organic cosmetics that will ensure no negative effects once used. As stated before, market expansion has been carried out in different parts of Africa and also in other regions of the world whereby the Oil is getting introduced. Secondly, Morocco has also used diversification as part of its growth strategy. People have different skin types and therefore, there is need to focus on these groups. Having one type of cosmetic despite of its usefulness may not be effective to the larger global market. The organization has therefore focused upon diversifying the product based on the different skin needs among people of different regions of the world. This has been a major strategy in increasing the market share in addition to expanding the markets. There has been lots of motivations with respect to the development of cosmetic products. First of all, the middle class in different parts of Africa and the world in improving and this therefore means that the affordability of the products will not be a major problem. African countries are currently under a period of transformation whereby large numbers of people are moving from the low class to the middle class thus ensuring they can always afford the product. Secondly, there is a dire need of the product with most ladies sacrificing as much as they can to ensure they can obtain the product. Argan Oil has also received international recognition which is a major boost for African women who have always viewed products from Europe or United States being superior in comparison to those which are locally processed.

Growth Strategy Chart

Customer

Innovation

Leadership

Globalization

Commercial

Excellence

Growth strategy

The company aims at ensuring it satisfies the needs of the customers. Innovation is key towards ensuring there is diversification of products. Commercial excellence is key in marketing and awareness creation of the product. Globalization performs a major role in the creation of emerging markets. Leadership is key towards ensuring different factors are put together to ensure the growth of the organization.

Risks for growth in the target market

There are certain risks for growth in the target market. Just like any other resource becoming exhausted after long term extraction, so does these cosmetic products. Growth in the target market will result into a higher demand for the product; a higher demand will result into more extraction. This will in the end result into exhaustion of the resource especially if the sustainability of the product is not put into consideration. Another major risk is that more players will be interested in joining this industry. With more players coming in competition will be expected to become stiff and this may affect this organization positively or negatively if they lack a competitive advantage (Kumar, 2005).

Collaboration

We plan to collaborate with the top cosmetics stores along with famous spas in tourist cities in Morocco. If we partner up with the top cosmetics stores in Morocco this will help us promote our skincare products to the Moroccan consumer base for cosmetics. Also, having to sell our products to spas and salons will help advertise our skincare product not only to the locals but also to other consumers in other countries in Africa. The risk would be that the company we would want to collaborate with will go under and they will no longer be able to sell or promote our product.

Key Insights (Matt)

Part III – Implementation plan

Purpose of Analysis

The purpose of this analysis is to use the findings of the Market Research undertaken by Clear Essence Cosmetics Company to craft an implementation plan that will be used as a guide in entering the new market in Morocco. We will endeavor to create strategies that seek to convert major cultural, administrative, geographical and economic differences or distances anticipated in the target market into strengths that can place the company at a competitive advantage.

In overcoming the cultural, administrative, geographical and economic differences identified by the research, we will design three alternative scenarios using combination of AAA strategies. The revenue and cost implications of each scenario will be assessed with the aim of identifying the best scenario to pursue.

A stakeholder analysis will be undertaken to identify key stakeholders, their values and powers in relation to the chosen scenario. Strategies will be created to guide the implementation team in managing the power of the stakeholders.

An analysis identifying how Clear Essence Cosmetics Company will globalize its business model will also be undertaken. Analysis of the globalization model of the business will concentrate on market selection and appropriate mode of entry, value proposition, value infrastructure, and global participation strategy and organization. Finally, this part will conclude by providing key insights that summarize key highlights of our analysis.

CAGE analysis – major cultural, administrative, geographical and economic differences or distances anticipated in the target market (MATT)

The CAGE Distance Framework helps to analyze the similarities and differences that two different countries or regions may have with one another. Generally speaking, the less in common two countries have with one another, the more difficult it will be to conduct business in the foreign region. We will look at the similarities and differences between the Inland Empire region and Morocco.

Cultural distance: The Inland Empire contains a majority Caucasian population, with Hispanics coming in second. Morocco contains an overwhelming majority of an Arab-Berber population. Although the Inland Empire is home to a large Muslim population, there is undoubtedly a cultural distance between the two regions, not only in regards to race/ethnic background, but also in language, consumer taste, etc. In order to break the cultural barrier, Clear Essence will need to bring in employees that understand the Moroccan culture.

Administrative distance: Administrative distance may perhaps be the biggest limiter of growth out of all sections of the CAGE Distance Framework. A company can be successful in all three other parts, but if they don’t understand the legal and administrative rules of a country, they will not truly be able to succeed. In the case of the United States and Morocco, the two countries are currently in a free trade agreement, that came into effect in 2006, which aims to promote the trade and foreign investment between Morocco and the US.

Geographical distance: Even though the Inland Empire and Morocco are thousands of miles apart from each other, there are still some positive aspects to take away from each region. First off, the Inland Empire contains a large distribution network, so companies thrive in this area due to the amount of resources that are available to get their products shipped and delivered as fast as possible. Secondly, Morocco is located on the northwestern coast of Africa, which allows for faster delivery over other landlocked countries.

Economic distance: Economic distance can be a particularly challenging factor to overcome when entering an international market. While Southern California and Moroccan consumers may not be relatively close as far as economic distance is concerned, the Moroccan middle class is continuing to grow as the economy grows right alongside, and as a result, the demand for retail products has been increasing with Moroccan consumers’ increase in disposable income.

AAA Scenarios – Design three alternative scenarios using combination of AAA strategies to overcome the CAGE differences. Assess the revenue and cost implications of each scenario, and identify the best scenario to pursue (MATT)

Stakeholder analysis – Identify key stakeholders and their values and powers in relation to the chosen scenario, and how will you manage the power of these stakeholders (alyssa)

Stakeholder are people who are interested in the company and willing to invest money in order to make profits for themselves. Therefore the stakeholders would be customers, investors, suppliers, employees, government and the community. That being said, our products will have natural ingredients that will be formulated for ethnic skin.To get natural ingredients for our products the water and soil must not get contaminated. Unfortunately, Morocco does environment is not at its best. We will contact the government about providing regulations to help minimize environmental impact. Not only does this help our suppliers to provide us non contaminated ingredients for our products but it will also help the communities water, soil and air.

Business model – Identify how should the firm globalize its business model in terms of the market selection and mode of entry, value proposition, value infrastructure, and global participation strategy and organization(QIN)

Growth of firms and organization solely depends on certain aspects such as marketing strategies and global participation. The Morocco cosmetics firm need to ensure it take certain strategies to improve its global participation and value proposition as well as its infrastructure value . This will be majorly associated with business strategies that are important to implement for any given firm to improve their popularity in the world. These aspects of globalizing the firm will help in promoting the success of the firm and the possible ways to do this is as explained below.

To begin with, the firm should advertise itself widely to increase its popularity and knowledge to people. Advertisements of the firm should be done through television channels that have wider geographical viewing. They should also reach many countries and this includes the world television channels that are viewed almost in all countries of the world. This will improve the firm’s mode of entry to the global market and its value proposition. Morocco Cosmetic firm to improve its global popularity and participation can use this important strategy .

Beside this, the firm could also engage in more marketing research strategies to improve its global infrastructure and global participation. This marketing will help to establish appropriate marketing strategies for the firm to use in marketing its products and services in the global market. Moreover, the organization should engage in partnership forms of business such as corporation where it unites with other similar company to create a monopoly type of market through elimination of competition among them. This will provide favorable marketing terms that will increase its popularity in the global market. In addition, the organization should ensure it uses high modern technological equipments and ways of production and service provision . This will help to improve the accessibility of the world clients, as the name of the business will be popular due to high quantity and quality of the product and services of the organization.

Key insights – summarizing key highlights of your analyses in this part(Shawna)

References

Mu, J. (2017). Dynamic Capability and Firm Performance: The Role of Marketing Capability and Operations Capability. IEEE Transactions On Engineering Management, 1-12. http://dx.doi.org/10.1109/tem.2017.2712099

Kabue, L., & Kilika, J. (2016). Firm Resources, Core Competencies and Sustainable Competitive Advantage: An Integrative Theoretical Framework. Journal Of Management And Strategy, 7(1). http://dx.doi.org/10.5430/jms.v7n1p98

Elfring, T., & De Man, A. (1998). Theories of the firm, competitive advantage and government policy. Technology Analysis & Strategic Management, 10(3), 283-294. http://dx.doi.org/10.1080/09537329808524317

Works Cited

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“Morocco.” Morocco Economy: Population, GDP, Inflation, Business, Trade, FDI, Corruption, www.heritage.org/index/country/morocco. Accessed 11 July 2017.

“Skin Care in Morocco.” Skin Care in Morocco, www.euromonitor.com/skin-care-in-morocco/report. Accessed 11 July 2017.

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http://next10.org/sites/next10.org/files/inland-empire-econ-snapshot.pdf. Accessed 18 July 2017.