Andersen Consulting - Strategic Services
Andersen Consulting - Strategic Services
Cosmetics Case
Situation: BeautyAsia (BA) is a health and beauty consumer products company headquartered in Malaysia. It manufactures and sells a line of cosmetic products ideally suited for the Malaysian marketplace. Although it has been a successful company for over twenty years, it has been losing money for the past two years and its market share has declined. The CEO has asked you to assist in diagnosing the problem and generating a few possible solutions. Question: What should BeautyAsia do to restore its profitability? Suggested Frameworks: Given the client’s decline in market share, the 3Cs model (i.e., Competition, Competencies, Customers) is an effective framework. Key Facts (to be shared as the case progresses): Company • Market share declined from 90% to 60% in the past two years. • Manufacturing is excellent • Inventory management systems are unsophisticated and ineffective, resulting in excess inventory and order fulfillment problems • Brands are widely recognized throughout Malaysia • No new products have been launched in the past eight years • BA sells its health and beauty products primarily through local mom and pop shops (i.e., convenience stores) • Management considered selling its current products outside Malaysia, but has been distracted by problems in its home country Competitors • Several large multinational manufacturers have entered the market • Competitors have flooded the market with new products • Multinational competitors sell their products through supermarkets
Consumers • As a result of multinational competitors entering the market, consumers have been exposed to new types of products and their health and beauty product tastes have become broadened and become more sophisticated Products • BA has multiple product lines ranging from lipstick to skin creams • BA’s products appeal to price-conscious consumers • The health and beauty products industry is growing approximately 15% per year
Cosmetics Case
Situation: BeautyAsia (BA) is a health and beauty consumer products company headquartered in Malaysia. It manufactures and sells a line of cosmetic products ideally suited for the Malaysian marketplace. Although it has been a successful company for over twenty years, it has been losing money for the past two years and its market share has declined. The CEO has asked you to assist in diagnosing the problem and generating a few possible solutions. Question: What should BeautyAsia do to restore its profitability? Suggested Frameworks: Given the client’s decline in market share, the 3Cs model (i.e., Competition, Competencies, Customers) is an effective framework. Key Facts (to be shared as the case progresses): Company • Market share declined from 90% to 60% in the past two years. • Manufacturing is excellent • Inventory management systems are unsophisticated and ineffective, resulting in excess inventory and order fulfillment problems • Brands are widely recognized throughout Malaysia • No new products have been launched in the past eight years • BA sells its health and beauty products primarily through local mom and pop shops (i.e., convenience stores) • Management considered selling its current products outside Malaysia, but has been distracted by problems in its home country Competitors • Several large multinational manufacturers have entered the market • Competitors have flooded the market with new products • Multinational competitors sell their products through supermarkets
Consumers • As a result of multinational competitors entering the market, consumers have been exposed to new types of products and their health and beauty product tastes have become broadened and become more sophisticated Products • BA has multiple product lines ranging from lipstick to skin creams • BA’s products appeal to price-conscious consumers • The health and beauty products industry is growing approximately 15% per year