Herborist Case
CAS E ANALYS I S :
0 : I NTRODUCTION
Herborist is a high end brand for natural beauty products from traditional Chinese ingredients. The brand is owned by Jahwa United Co. Ltd, a Chinese-based company product of the merge in the mid-90s. Since 2008, the brand began acquiring steady expansion by entering foreign markets, especially Europe and Hong Kong. This combined with the promising forecast of the natural cosmetics industry, even despite of an economic slowdown, made an interesting scenario for high profits and a great brand out of Herborist.
Nevertheless, the brand faced tremendous competition beyond their segment of traditional based cosmetics facing the ultimate top three competitors of the personal care industry: P&G,
Unilever and L’Oreal, as well as the many other domestic . And as if this was not enough, Herborist had an almost null experience as to enter markets abroad, unlike these corporate giants.
W ith all this promising and challenging market, we should proceed to analyze the current conditions of the company and its brand and analyze the previous and most promising decisions that they should pursue.
1 : A BOUT J AHWA A ND THE INDUSTRY
Jahwa became one of the strongest personal care enterprises in China with several brands, being the largest and oldest with a distribution in over 200 cities. Also, the company was well diversified in other activities that went from real state and beverages to rubber products, among others.
The company had a diverse portfolio of mass-market products and kept a high reinvestment in R&D, creating a constant increase in its product line and SKUs . This combined with the previous experiences of local acquisitions, cooperations, joint ventures and distributions with many international related companies such as SC Johnson or Adidas , gave Jahwa a great competitive
advantage in a market that was able to grow over 100 billion USD in less than a decade (see
Exhibit A), but all of these actions
0 : I NTRODUCTION
Herborist is a high end brand for natural beauty products from traditional Chinese ingredients. The brand is owned by Jahwa United Co. Ltd, a Chinese-based company product of the merge in the mid-90s. Since 2008, the brand began acquiring steady expansion by entering foreign markets, especially Europe and Hong Kong. This combined with the promising forecast of the natural cosmetics industry, even despite of an economic slowdown, made an interesting scenario for high profits and a great brand out of Herborist.
Nevertheless, the brand faced tremendous competition beyond their segment of traditional based cosmetics facing the ultimate top three competitors of the personal care industry: P&G,
Unilever and L’Oreal, as well as the many other domestic . And as if this was not enough, Herborist had an almost null experience as to enter markets abroad, unlike these corporate giants.
W ith all this promising and challenging market, we should proceed to analyze the current conditions of the company and its brand and analyze the previous and most promising decisions that they should pursue.
1 : A BOUT J AHWA A ND THE INDUSTRY
Jahwa became one of the strongest personal care enterprises in China with several brands, being the largest and oldest with a distribution in over 200 cities. Also, the company was well diversified in other activities that went from real state and beverages to rubber products, among others.
The company had a diverse portfolio of mass-market products and kept a high reinvestment in R&D, creating a constant increase in its product line and SKUs . This combined with the previous experiences of local acquisitions, cooperations, joint ventures and distributions with many international related companies such as SC Johnson or Adidas , gave Jahwa a great competitive
advantage in a market that was able to grow over 100 billion USD in less than a decade (see
Exhibit A), but all of these actions