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Competitive Environments: Estee Lauder Essay

1023 words - 5 pages

Competitive Environments

This reflective piece takes a look at the success of the analysis of the competitive market that has been researched, and how beneficial this was in relation the presentation on Estee Lauder.

The objectives of the assignment and report on Estee Lauder were: to identify Estee Lauder’s market, including it’s positioning within that market and its target audience. It was also to look at current strategies used by the company and to identify and problems found within these strategies. From this analysis and research into the brand, it was possible to suggest certain recommendations on how they could improve and solidify their competitive edge within the beauty ...view middle of the document...

The model PEST identified the wider environment surrounding Estee Lauder. The political environment did not spring too much apart from a boycott that was led by pro-Palestinian activists who targeted the Estee Lauder corporation because of the pro-Israel activities of Ronald Lauder (http://www.inminds.co.uk/boycott-estee-lauder.html). The economical environment is the obvious problem of the worldwide recession which, as previously stated, means it is likely to see consumers turning towards cheaper brand alternatives as people have less expendable income. The social environment is that Estee Lauder Brand ‘says’ something about its customer but as social ranking is diminishing so is the strength of this, people are far more likely to mix-and-match brands nowadays hence taking away from he status symbol Estee Lauder once had. The technological environment means that to stay ahead of competitors and keep customers, Estee Lauder need to stay ahead of technological breakthroughs. Estee Lauder has in-house D&R (Development and Research) but sometimes this can be prohibitive. The model PEST was useful to identify specifics facing the Estee Lauder brand, (for example how politics and social influences have played their part in the development and success of the brand), and also to get an idea of the general environment surrounding the beauty industry to provide insight into where Estee Lauder stand against competitors within the industry.

In terms of Porter’s 5 Forces, threat of new entrants is relatively low due to the fiercely competitive higher end of the market Estee Lauder has placed itself in. It would be incredibly difficult – practically impossible – for a new brand to enter the market and compete with Estee Lauder with no reputation, expensive products and no consumer base to work with. The main threat would be the possibility of new, smaller and much cheaper brands which can cater to peoples’ current needs during the financial downturn.

Threat of substitution helped to establish the main reasons for customers to turn to other alternatives (again mainly the recession). Consumer power was shown to be extremely high as...

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