Ch. 2 - Strategic Planning for Competitive Advantage

     When operating an organization, one must obviously have a strategic plan in order to survive the cut-throat world of business. When planning, the managerial staff must be conscientious of the organization's objectives and resources as well as evolving market opportunities, to ensure the organization grows and makes a profit in the long run. In this post, I will analyze Lush Cosmetics' strategic plan, but first it is crucial to perform a SWOT analysis in order to predict the success of Lush Cosmetics' plan...


     Strengths: Lush Cosmetics is a very powerful, influential brand that has tons of loyal customers around the world. Lush's stance against animal testing and use of organic ingredients sets the brand apart from more generic cosmetic companies. Lush creates their own fragrances to incorporate into only their own products (meaning these scents aren't available elsewhere). Lush involves itself in a multitude of charities which promotes a benevolent image that attracts consumers. The company focuses on customer satisfaction and relationship marketing which creates an abundance of faithful customers. Lastly, Lush locations are always in wealthy areas which helps promote its imperial status.

     Weaknesses: Despite Lush Cosmetics being very successful, it could still use a bit of improvement.The current circumstances makes Lush a bit inaccessible for some people- for instance, some of the high end products are not affordable by the lower class. Also, there are only around 670 store locations in only 44 countries which makes it difficult for many consumers to get to the actual stores. Another weakness is the fact that because their products are so fresh, many have expiration dates which can discourage customers. Lastly, the most hindering weakness is their absence of a marketing department. However, it can be argued that Lush doesn't need a marketing department since they rely on satisfied customers to bring in potential buyers. It is because of Lush's extraordinary success that one can't help, but wonder how much more business Lush would get if they were to implement a marketing department.

     Opportunities: The world is becoming more and more progressive by each day; the consumers want organic products that are politically and environmentally conscious.  It is because of this that Lush Cosmetics has the opportunity to push their innovative products and eventually dominate the cosmetic industry. Also, with Valentines day coming up, they could use that to their advantage in order to bring in more profit.

     Threats: One of Lush Cosmetics' biggest threats is the possibility that consumers will choose conventional over responsible products. For example, consumers might choose MAC Cosmetics over Lush because of its mainstream appeal and their makeup being easier to use than Lush's. Another threat is The Body Shop. The Body Shop basically has the same mission statement as Lush Cosmetics and also has a huge fan base. If The Body Shop were to create new innovative products that made Lush's obsolete, it'd be extremely detrimental to the profitability of Lush.

     Lush Cosmetics, being the innovative company that it is, likes to expand its horizons and always tries infiltrate new markets as seen last year when Lush had launched its brand new line of liquid eyeliners, cream eyeshadows, and liquid lipsticks (something they have never done before) called "Emotional Brilliance." In 2011, Lush released a line called "Toothy Tabs," a plastic tube free alternative to regular toothpaste. The fact that Lush is even dabbling in the dental care industry makes it apparent that Lush Cosmetics utilizes Ansoff's strategic opportunity matrix: a strategic marketing method that matches products with markets.

     There are four different options firms may explore when emulating Ansoff's strategic opportunity matrix: market penetration, market development, product development, and diversification.

1) Market Penetration: is a marketing strategy in which the firm tries to increase market share among already existing customers. They may do this by trying to show their products in a different light and trying to get
customers to use your product in a way they might not have thought of before.

2) Market Development: is a marketing strategy that tries to attract new customers to already existing products.

3) Product Development: is a marketing strategy in which the firm creates new products for already existing markets. This is usually done by listening to consumers' evaluation of your product and using their evaluations to help improve your product.

4) Diversification: a strategy used to increase sales by launching new products into new markets.

     Lush Cosmetics may lack a marketing department, but they circulate a catalog entitled "Lush Times" in which they list all of the existing products and highlight new ones as well as give certain news and messages to their readers (mostly recurring customers). In Lush Cosmetics last issue of Lush Times, the writers exhibit knowledge of the Ansoff strategic matrix by using the market penetration technique. Lush encourages their customers to make a new hair resolution for the new year and post pictures of the products you buy (for your hair resolution) on a social media site called Instagram. I believe this is an ingenious marketing strategy because it will definitely encourage the recurring Lush customers, eager to buy as much Lush as they can, to purchase products they haven't tried before or to stock up on an old favorite which will increase profits from their hair care lines. Also, I believe it's a great idea because Lush relies on its customers to spread the word about its brand; encouraging customers to post about Lush on social media sites is bound to bring in new customers as well as the old ones.
   
     As said previously in the post, Lush doesn't have a marketing department and thus must find other ways to attract customers. Lush has practiced market development recently since Lush has opened 10 more stores in Northern America like Boston, Indiana, New Mexico, and more and are planning to open even more store locations in the near future. It is because Lush created stores in locations previously unexplored before, they are gaining a lot, a lot, a lot of new customers and they will profit off of the same old products just because of their new locations. This will definitely increase Lush's profits, but it will also strengthen their company seeing as not having many store locations and accessibility has been identified as one of Lush's weaknesses. Every new store Lush builds is another step towards conquering the cosmetic world.

The Ex-Factor Bath Bomb

Sexy Fun Times Gift Set

     Lush Cosmetics has taken advantage of this year's upcoming Valentines Day. Valentine's Day is a day where many will take a bath/shower with their significant other or they will take a bath or shower alone and cry. Lush has developed new products (product development) hat will aid both consumer's needs. One new product is "The Ex-Factor" bath bomb which is obviously targeted to single (and spiteful) girls who will be spending Valentine's Day alone. The product description on LushUSA.com is "who knew vengence could smell so sweet? Drop our little vanilla an ylang ylang man into your tub and delight in watching his limbs disolve." This is a great route for product development seeing as they were able to create such a unique bath bomb that targets a whole different group of consumers even though they already have a vast number of strikingly different bath bombs. Also, new to Lush are three brand new gifts for Valentine's Day; "Sexy Fun Times," "Be Mine," and "Heart of Gold." Lush Cosmetics made a smart move developing three

Heart of Gold Gift Set

Be Mine Gift Set

new gifts for the upcoming holiday not only because it's a unique alternative from the cliched chocolate and roses, but also because of the prices. The most inexpensive option one has when choosing between gifts for their significant other is the Sexy Fun Times gift set priced at $26.95. As you may have noticed already, the Sexy Fun Times gift is pink with red hearts on it, both colors and symbols associated with femininity. This means that all the boyfriends looking to buy their girlfriends a present will choose Sexy Fun Times out of the three gifts mainly because of the packaging targeting women and partly because it's the cheapest. Most men don't place a high value on bath products and sometime skin care, so making the cheapest gift target men/boyfriends was a genius idea when developing new gifts.

Lush Color Wheel

     In Lush, there hasn't been much diversification this year, however Lush Cosmetics made a bold step last year into the world of makeup with their Emotional Brilliance line. The Emotional Brilliance line is composed of a wide selection of liquid lipsticks, cream eyeshadows, and liquid eyeliners. The concept behind the line is to reject colors that are "in" during the current season and instead wear colors that suit your mood and mindset. A year later and they still have color wheels in all of their stores in order to do "color readings" for their customers. If you seem to be interested in the Emotional Brilliance products, a Lush employee will happily perform a one-on-one color reading for you to find three colors that best describe you (also there's fog, who doesn't like fog?). I actually attended the launch party in the New York, Union Square location where many fellow consumers were skeptical about buying face makeup from Lush seeing as this was Lush's first time branching out into the face makeup market. Lush obviously expected this but dismissed everyone's worries with color readings and delicious vegan cookies. I wasn't interested in buying Emotional Brilliance, however they encouraged me to get a color reading as well and because they focus so much time on each customer, I felt kind of bad not buying it because the employees invested so much time into me and made me feel extremely welcomed. Keeping the color wheel in all store locations to this day is a great way of banishing all of new customers' doubts. Even though Lush Cosmetics took a risk and ventured out into a new market, Lush evidently knows how to utilize their relationship marketing skills (and baking skills) to lure in old and new customers.