The Estee Lauder Company was founded by 1946 by Mrs Estee Lauder and her husband, Joseph Lauder. The Estee Lauder Company is the company that sell numerous beauty and skin care products in the cosmetics marketplace. Estee Lauder acquired many brand licensing such as Michael Kors, Tommy Hilfiger, Donna Karan, Bobbi Brown and La Mer. The company’s vision is: “Bringing the best to everyone we touch and being the best in everything we do. By ‘the best’ we mean the best products, the best people and the best ideas.” Besides, the company also committed to uncompromised ethics and integrity. The highest standard of ethics is a condition of employment for al Estee Lauder’s employees. The company is committed to the Code of Conduct which require the employees to conduct themselves at all times within the letter and spirit of the code.
Up to date, there are 27% distribution channels, 28% department stores, 13% perfumeries, 9% retail stores, 9% travel retail, 5% salons and spas and 9% other sources.
Estee Lauder promotes its products through free samples and gift-with purchase plans. It also uses celebrities as endorses in testimonial advertising for commercials on TV and magazines in order to introduce a consistent brand imagery around the world. Gwyneth Paltrow, Carolyn Murphy, Hilary Rhonda and French model Constance Jablonski as Estee Lauder’s face and spokespersons. The products priced from brand to brand ranging from mid-high to high. Prestige pricing is the effective strategy due to the company’s target markets.
The personal products industry has a relatively high margin compared to other industries because of the intense advertising and brand name recognition. The financial position of Estee Lauder’s is small compared to some of its rivals. In 2010, the net sales was $ 7.8 billion compared to its competitors, L’Oreal which net sales was $ 19.5 billion. L’Oreal is one of the worldwide leaders in cosmetics and distributes products in 130 countries with 19 global brands such as Matrix, Lancome, Ralph Lauren and Georgio Armani. Others examples of Estee Lauder’s competitors are like Procter & Gamble (P&G) with the net sales of $19.1 billion, Colgate-Palmolive which owns Colgate’s oral care brands and Palmolive brands and Revlon that offers a variety of cosmetics and beauty products under many brands names.
Due to the situation, Estee Lauder has initiated the four-year strategy which aimed to increase market share to generate more than 60% of sales from international markets, 1% of sales growth from acquisitions over the next three years, increasing operating margins from 13% to 14%, increasing the rate of inventory turnover, reduction of costs and reinvestment of $50 million to increase global growth and market share.