Elizabeth Arden Company Strategy - Research Paper Example

History of Elizabeth Arden (Make-Up Company) History The Elizabeth Arden, Inc. was established in 1910, at an age where it was rare for women to be found wearing make-ups, and also when it was even unusual for a woman to start, own and run a business. Therefore, Florence Nightingale Graham, who was a Canadian-American woman born in 1884 was an exclusive woman, who spearheaded the establishment of the cosmetics company that has become the world giant in the cosmetics industry1. However, while starting the company, it was initially started as a small cosmetics retail, referred to as the Red Door salon. The Spa was opened on Fifth Avenue, and it has formed the basis of the existing world cosmetics giant, which has been involved in acquiring many other brands and products from various producers, to boost its line of products. The proprietor of the company was a women’s advocate who was very active in advocating for the rights of women, through searching for all ways to empower women, at an age when the rights of women was a disturbing subject that many avoided to confront with. As a way of empowering and showing the solidarity of women, she advocated for beauty and fragrance of women through the use of make-ups, which then gave her the motivation to establish the make-up salon, the Red Door salon, which she could use for advocacy campaign, where alongside other 15,000 women who were suffragettes, she matched past her salon wearing red lipstick, as a show for women’s solidarity2. Initially started as the Red Door salon, the company obtained its present name from the coinage of a name from a previous partnership that Florence Graham had with Elizabeth Hubbard, which dissolved in 1909, and then added the name Arden from her favorite poem, Enoch Arden, to come up with the current name of the company3. She embarked on a journey of growing the business, both as a motivation for other women to get into independent productive ventures, and also to prove to those who were opposed to giving women their rights. Florence Nightingale Graham increased her business management skills through travelling to France in 1912 to learn the techniques of running a beauty salon, while also learning the kind of products that were used in such salons. There, she learnt the beauty and face massage skills, as well as learning how to prepare various powders for use in the massage process. When she returned back home later in that year, she had all the requisite skills of diversifying her business from just offering beauty services and products, to the inclusion of massage services. By 1914, the expansion strategy for the business was well shaped, with the business starting to formulate, manufacture and sell its own beauty and cosmetics products. Thus, the Red Door salon grew and expanded immensely, and by 1915, she embarked on making her business international, through opening other salons in different parts of the world, where the first the Elizabeth Arden salon was opened in France in 19224. By 1930, the Red Door salons had been established in the major fashion capitals of the world, and thus the company, as a brand, had become as popular as the Coca-Cola Company. Until her death in 1962, Elizabeth Arden, Inc. had been recognized the world over as a giant in the cosmetics industry, and she had won several honors for her contribution to the 21st century entrepreneurship. However, the company was highly affected by the great depression occurring in the period 1938, although the brands of the company were still popular, thus it continued to make reasonable sales that enabled it to survive the economic crisis, while earning low profits. The Elizabeth Arden, Inc. during the World War II Elizabeth Arden, Inc. was especially active during the World War II period, with a special focus on facilitating women who were joining the fighting forces. This way, the Elizabeth Arden, Inc. engaged in the production of various brands meant for the women soldiers, which included lipsticks that were required to match the uniform of the soldiers. For the women soldiers in Britain who were serving the Women’s Royal Naval Service, the company produced for them the ‘Auxiliary Red’ lipstick, which was well designed in cylinder kits, suitable to fit into the uniform pockets5. For the USA women soldiers, the produced red lipstick, especially for the female Marine officers, that was red in color, to match the dressing requirements of the fighting forces in the war6. All this was meant to facilitate the beauty of the female soldiers even at war. During the same war, Arden was accused of possibly opening salons, which were pro-Nazi cover ups during. The FBI embarked on investigating the claims that Elizabeth Arden, Inc. was supporting the Nazis, and though an investigation occurred, no nothing was proven concretely7. The Elizabeth Arden, Inc. in 1950s While the target of the Elizabeth Arden, Inc. was on offering the cosmetics and beauty products to women, its focus changed in line with its diversification strategy, to include the sale of a clothing line in the 1950s8. This marked the departure of the company from its specialization in offering cosmetic and beauty products, to the offer of clothing products. The other major aspect of diversion from the company’s tradition that was registered in the 1950s was the venture of the company to the target the male demographic group, through availing men’s fragrances into the market, while also opening a male boutique during the same period9 Elizabeth Arden, Inc. business, marketing and advertising techniques The growth of the company from a single salon established in 1910 to the giant in the cosmetic industry, which have various branches internationally is spearheaded by the application of certain business, marketing and advertising strategies. Elizabeth Arden, Inc. business strategies Innovation Innovation is one of the fundamental business strategies that have been applied by the Elizabeth Arden, Inc., to grow and expand, and become the giant in the cosmetics industry that the business has become today. The company has remained innovative over the years, through venturing into the research and production of new beauty and cosmetics products, thus increasing the range of products that the company offers to its customers worldwide. Therefore, in line with its marketing strategies, Elizabeth Arden, Inc. emerged as the first company to introduce the eye make-up products for women. Additionally, the company is credited with the innovation that saw it emerge as the pioneer of the “makeover” (H) 10. The innovation of this company went on to open the gate of producing the first travel-size beauty products, which would allow travelers to easily pack and travel with their make-up and cosmetic products to their various destinations, from where they could then apply them. Thus, innovation has been a fundamental business strategy for the Elizabeth Arden, Inc., which has allowed the company to venture into different line of products, thus enabling the company to remain relevant, since it keeps introducing products that are in line with the developing needs of its clients, while being able to fight the competitive forces within the cosmetics industry, through ensuring that its clients are constantly receiving new brands, and thus has no need to look elsewhere for cosmetic products. Innovation has also been a very fundamental business strategy that has enabled the company to increase its sales revenues, through ensuring that it avails a range of products to its customers, thus tapping revenues from various clients who may be in need of different beauty and cosmetic products. Through the production of different beauty and cosmetics products, the company has been able to ensure that it expands into different markets, considering that it has products that are suitable for any market. Innovation, which was a traditional concept for the business since it was established, has remained one of its core strategies, which has enabled the company to remain relevant and competitive in the beauty and cosmetics industry. Holistic approach to beauty The Holistic approach to beauty is yet another business strategy that has been applied by the Elizabeth Arden, Inc. to grow and expand for the last century. While she was opening the first cosmetic and beauty business in 1910, Florence Nightingale Graham believed and adopted the creed that “to be beautiful is the birthright of every woman” 11. Through perceiving beauty as the birthright for all women, the focus of the company has been to ensure that women are provided with beauty products that meets every aspect of their make-up needs. Therefore, the product line that is manufactured and sold by the Elizabeth Arden, Inc. are comprehensive, consisting of the facial make-ups, lipsticks, perfumes, fragrances, massage powders and oils, as well as many other beauty and cosmetic products and clothing, which are not only essential for beauty, but also for fashion enhancement. The company has been able to produce over 300 brands of beauty and cosmetic products for its client base, with more than 10 more brands being launched in the fiscal year 2009, which included Elizabeth Arden branded skin care and color products, Prevage Body and the Elizabeth Arden fragrance12. This strategy has been instrumental in the growth and expansion of the Elizabeth Arden, Inc., since they ensure that the clients to the company get a variety of products from the same company, thus ensuring to secure the market share that the company has annexed in the cosmetics industry. A company that produces a range of products that are able to meet the needs of its customers benefit through forging goodwill and customer loyalty from its customers. This in turn serves to secure the market share of the company, from the competitors operating in the same industry as the company (B) 13. Therefore, the application of the Holistic approach to beauty has enabled the Elizabeth Arden, Inc. to build on the goodwill of its customers over the years, through ensuring that it provides the customers with all natures of the products that the customer could require, that shielding its customer base from being attracted to its competitors. Targeting diverse geographic markets The strength of the Elizabeth Arden, Inc. is derived from its ability to target diverse demographics and geographic markets, thus enabling the company to have a wide market that it serves, as opposed to concentration on a limited geographical and demographic market only, which would highly limit the business of the company14. The Elizabeth Arden, Inc. is a global brand, serving different markets in the world. Since its establishment in 1910 as a beauty salon, the business had an expansionary strategy to serve different world markets, which saw the business open its first branch outside the USA in 1922, when the Red Door salon registered its presence in France. Ever since the company has embarked on a global expansionary strategy, aiming at serving the major fashion capitals in the world, a dream that was realized in 1930, when the Elizabeth Arden, Inc. had opened its doors in different international markets15. By the close of the century, the company had expanded globally, to serve the beauty markets of different regions, which include the United States, where the company was initially started, to Europe, and then to Australia and South America, where the company has opened well over 100 Elizabeth Arden salons16. Additionally, through its expansionary strategy, the Elizabeth Arden, Inc. has ensured that its products are distributed all over the world, through a chain of marketing and distribution strategies that have seen the company secure market bases globally. The company has produced different brands of beauty and cosmetic products that suit each of the markets that it serves, ensuring that different markets are supplied with a different range of products, depending on the needs of such geographical markets. Targeting a specific demographic market niche While diversification as a strategy is essential to see a company grow and expand, specialization, through targeting a certain market niche is yet a unique business strategy that allows an organization to fight competition, through building on the confidence and loyalty of the market niche, which then remains loyal to the company and its products. While it was first established, the Elizabeth Arden, Inc. mission and objectives were set at serving the beauty needs of women, and the target has remained to serve women throughout the history of the company, which runs over a century. The proprietor of the beauty and cosmetics company had the belief that "To be beautiful is the birthright of every woman" 17. Therefore, the business embarked on a mission to ensure that women will always have the necessary beauty products to keep them beautiful and presentable, a commitment that saw the business expand to different global markets, while also expanding the range of its beauty products, just so that all the beauty needs of women could be covered through the range of products offered by the company. This has seen the company open over 100 branches globally, while producing over 300 types of beauty products, most specifically targeted to women. This in turn has served the objectives of the company well, through ensuring that women, who are the targeted demographic group by the company remains loyal to the company, since they have all their needs for beauty and cosmetic products covered. The advantage associated with targeting a certain demographic niche is the fact that; the company is enabled to fully focus on the needs of the specific group that it seeks to serve; as opposed to applying diversionary tactics that keeps shifting the attention o the company from one group to the other. This way, the company builds confidence on of the targeted market. Thus the market remains loyal to the company, as opposed to a company that tries to serve different demographic groups, which may not be able to serve the unique needs of a certain demographic market niche. Therefore, it is through targeting women as the only focus for the company, that the company has been able to focus, understand and meet the unique needs of women beauty, an aspect that has allowed the company to overcome the competitive forces in the beauty and cosmetics industry, while also expanding and increasing its sales18. Additionally, the focus on women has been a major advantage for the company, since women forms the highest percentage of the global population that is sensitive to beauty and make-ups, thus making the target of the company conform to a wider demographic market selection. Cost structure and working capital efficiencies The cost and working capital reduction strategies are yet some other strategies that the Elizabeth Arden, Inc. has applied to grow, expand and remain competitive over the last century19. The supply chain and logistics concepts of the business have been particularly targeted for cost reductions, through the inclusion of formidable partnerships with the distributors and suppliers, which have ensured that the logistical and supply chain challenges that highly derail the operation of organizations while increasing their costs of operations have been comprehensively addressed. Technology is one of the tools that has been extensively applied by the company, to ensure that the cash flow system of the company, as well as the logistics and transactional systems have been made effective, to eliminate all the loopholes that would cause revenue losses, while ensuring that transactions are undertaken in a timely and effective manner, thus eliminating the unnecessary delays. The Global Efficiency Re-engineering initiative was initiated by the Elizabeth Arden, Inc. in 2007, covering the logistics, the supply chain and the cash flow systems of the company, to ensure that both the transactions of the company and those of its partners in the supply and distribution chain has been technologically integrated20. Thus, the supply chain and the business processes of the company has since been improved, while a shared transactional model has been introduced for sharing between the company and its partners in the supply and distribution chain, which has gone a long way in increasing the cost and time transactional efficiencies of the Elizabeth Arden, Inc., thus reducing its costs of production21. Additionally, the company has accomplished the performance of an Oracle financial accounting system, which also entails an integrated order processing system, which makes it fast and efficient to make orders with the company, and to have them supplied in good time, while also ensuring that the management of such transactions finances is effective. This has gone a long way in eliminating the inconveniencies associated with long process of order processing, which in turn serving to increase the costs for the company. Thus, through the efficiency initiatives, the Elizabeth Arden, Inc. has been able to improve its efficiency both in time and costs incurrence, thus enhancing its financial performance22. Acquisitions The Elizabeth Arden, Inc. has applied business acquisitions as one of the major strategies, appropriate for expanding both the products range of the company, as well as its global presence, through reaching various geographical markets by acquiring the beauty and cosmetic companies that operates in those markets23. Through licensing opportunities, the company has been able to acquire both singly manufactured products and brands from individuals, as well as acquiring fully fledged companies, to ensure that the needs of the customers that the company is not able to serve through its operations are covered under its umbrella. This is a vital business strategy that ensures that the loyalty and goodwill of the customer in the company remains steadfast, since the customers do not have to go for brands from a different organization to fulfill their beauty and cosmetics needs, since such needs will be met by the subsidiaries of the Elizabeth Arden, Inc., on the event that the mother company is not able to cater for such customer needs. Therefore, the Elizabeth Arden, Inc. focuses on the markets that it believes has the potential to grow, and then acquires the companies that operates in that market, which has the full capacity for integration and expansion to serve the markets effectively. Through the acquisition strategies, the Elizabeth Arden, Inc. has been able to acquire affiliates in different regions of the world, which include the Americas, Europe, the Middle East, especially in Dubai, and also in Asia, where the company has acquired some affiliate in the Great China24. This way, the company has been able to expand its presence globally, while ensuring that different needs of women regarding beauty and make-ups have been effectively met by the company and its acquired affiliates, thus shielding its loyal customer base from the other competitors, who would have taken the advantage of supplying the customers with the products that the Elizabeth Arden, Inc. cannot produce, thus denying the company its sales and competitive advantage. Elizabeth Arden, Inc. marketing strategies The marketing strategies adopted by this company have been instrumental in enhancing the expansion and growth of the company as a global brand. Pricing is one of such marketing strategies, where the Elizabeth Arden, Inc. has applied both the entry point pricing strategy, as well as the skimming pricing to enhance the acquisition of a large customer base, while also ensuring the improvement of the sales and revenues for the company25. Entry point pricing is applied as a strategy to introduce new products, which are sold at a relatively low price to attract customers. On the other hand, skimming pricing is applied for the major popular products that the customer offers, to ensure that only few of such products are sold to break-even, and thus the rest of the extra incomes covers for the low pricing applied in the entry point pricing products. This way, the duo-price marketing strategy benefits the company through opening its doors for many customers, while also enhancing its profitability. Salesmen have also been applied as the other marketing strategy for the company, which ensures that it promotes its products through experienced salespeople, who in turn increases the sales and revenues of the company. In fact, the Elizabeth Arden, Inc. was the first in the cosmetics business to train and commission its team of salesmen to travel and demonstrate its products26. The recruitment of high profile workforce, as well as the target and incorporation of well trained and experienced employees into the company also serves as a major marketing strategy for the Elizabeth Arden, Inc., which serves to attract more customers, owing to the association of the company with professionalism. For example, the company recruited Sharilyn Abbajay, who is a renowned Spa industry expert to join its senior management team on May 2, 201327. This is an attractive marketing strategy that pulls the experienced staff from the competitors, while also boosting the professionalism image of the company, thus attracting more customers. The acquisition strategy is yet another marketing strategy applied by the company, which serves to prove the ability and worth of the company to the world as well as to its competitors, through acquiring major companies and brands in the beauty and cosmetics market, which in turn boost the caliber of the company in the eyes of customers and the competitors of the company. This in turn attracts more attention to the company, which comes with customer loyalty and new customer acquisition advantages. Elizabeth Arden, Inc. advertising strategies The Elizabeth Arden, Inc. has applied several marketing strategies which are pivotal for its growth, expansion and revenue increasing objectives. The company has been involved in extensive advertisement campaigns through the mainstream media, both in Television, Radio as well as in the print media. The company has also been engaged in extensive advertising campaigns through the social media, where it has established its pages in social media platforms such as brickfish, facebook, and twitter, while also promoting its products through its official website28. These advertising strategies have generated many positive engagements for the company, while greatly increasing its online sales transactions. Another advertising strategy adopted by the Elizabeth Arden, Inc. is the application of product branding as an advertising strategy. All the products of this company are well branded and packed in such a way that they are true representations of beauty, which makes the brands not only attractive, but also desirable to customers, considering that women are highly sensitive to beauty and neatness. Through the branding and packaging techniques only, the company has been able to attract more customers to purchase its products, than it would have through the normal advertising in media. Additionally, the application of the color schemes has formed the basis of product advertisement for the company, through the application of blight and attractive colors that are the favorite for women, such as pink, purple and red. In fact, the proprietor of the company used to advertise the brands offered by the company through her characteristic purple dressing, which identified with major brands offered by the company29. Through this strategy, the company has been able to maintain the attractiveness of its products, and thus has been able to attract more customers. Bibliography Albro Martin, “Elizabeth Arden,”Notable American Women: The Modern Period (Cambridge: Harvard Univ. Press, 1980). Harvey, Carol, “Elizabeth Arden,” in Frank Magill, ed., Great Lives from History: American Woman Series (Pasadena, Calif.: Salem Press, 1995). “Elizabeth Arden Corporate Web Site” http://www.corporate.elizabetharden.com, accessed April 20, 2013 Harriman, Margaret, “Profiles of Glamour, Inc.,” (Obituary in the New York Times, October 19, 1966) Shuker, Nancy Elizabeth Arden: Cosmetics Entrepreneur (Englewood Cliffs, N.J.: Silver Burdett Press, 1989). Peiss, Kathy, Hope in a Jar: The Making of America’s Beauty Culture (Pennsylvania; First University of Pennsylvania 2011) PRNewswire, ‘Elizabeth Arden Red Door Spa Grows Business and New Skincare Line with the Appointment of Sharilyn Abbajay, Renowned Spa Industry and Retail Authority’, (PRNewswire, May 2, 2013). http://www.cnbc.com/id/100700253 Rice, Faye, 'Elizabeth Arden: Profiting by Perseverance,' (Fortune, January 27, 1992, p. 84). Stern, Aimee L., 'How Elizabeth Arden Gave Itself a Makeover,' (AdWeek's Marketing Week, September 9, 1991, pp. 18-19). United States, Elizabeth Arden (Federal Bureau of Investigation; Washington D.C.) Willett, Julie, American Beauty Industry Encyclopedia (Santa Barbara, Greenwood Publishers (2010) Woodhead, Lindy, War Paint: Madame Helena Rubinstein and Miss Elizabeth Arden: their lives, their times, their rivalry (Hoboken, N.J.; John Wiley & Sons 2003) Read More