INTRODUCTION INNISFREE MKT PDF

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introduction on report the company of innisfree mkt243...

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INTRODUCTION

(INNISFREE COMPANY BACKGROUND)

Amore Pacific owns and established Innisfree, a South Korean cosmetics company that was launched in 2000. ‘The Lake Isle of Innisfree’ a poem by Irish poet W.B.Yeats ,inspired the brand name .South Korea ,Hong Kong ,China ,Japan ,Taiwan ,Singapore ,Malaysia ,Thailand, Vietnam ,Indonesia ,the Philippines ,India ,The United States ,Canada ,Australia and The United Arab Emirates are among the countries with Innisfree stores .It is owned by Amor Pacific Corporation, South Korea’s largest cosmetic company ,which also owns popular brands Laneige ,Etude House and Sulwhasoo .South Korea is a country in East Asia that occupies the Korean Peninsula’s southern half .It’s a very competitive corporate world out there .South Korea is the world’s eighth largest cosmetic market ,accounting for about 3.0% of worldwide sales .The purpose of this research is to provide a PESTEL and Porter study of Innisfree. Innisfree is well-known for its affordability and brand idea ,which promotes healthy, moderately priced beauty products made with ingredients safely obtained from South Korea’s Jeju Island .Innisfree is the first Korean natural beauty company ,selling makeup, skincare ,body cleanser and other items for both men and women .It’s one of the few Korean companies that uses organic components that have been certified by the ECOCERT organization in France .Innisfree meticulously explores and investigates the benefits of nature, and formulates healthy and harmless beauty products with its finest ingredients .The brand’s commitment to preserving the natural balance has led them to utilize solely environmentally friendly packaging .Clean and refreshing air ,soft and warm sunshine, enriched and healthy soil and water that is unpolluted and clear .Jeju ,which holds the four energies of nature ,is a haven of pure and real beauty .Innisfree’s goal is to satisfy clients .Only natural components from Jeju Island are used in Innisfree ,such as volcanic clay ,canola ,camellia and green tea that symbolize the island’s clean and pure natural environment at affordable pricing .Innisfree also strives for a balance of greenery and healthy beauty .It is committed to attaining an environmentally friendly green lifestyle in order to create a space

where nature and skin can recover. Since it is founding in 2000,Innisfree has been representing naturalism-oriented cosmetic brands with the finest quality ,pursuing the benefits of pure nature .Innisfree Perfect UV Protection Cream Long Lasting SPF50+ PA+++ for Oily Skin is the flagship product ,and it embodies the company’s commitment to using natural and dependable ingredients .The first Innisfree store in Singapore opened in late November 2013 at Takakshimaya Shopping Centre in Ngee Ann City .It has been highly accepted by Singaporeans and there are now seven locations across the country .Amor Pacific Corporation owns the South Korean cosmetics and skincare brand Innisfree ,which focuses on offering natural and ecologically friendly beauty products to females aged 18 to 25 .While no financial figures are available ,Innisfree Singapore’s rapid store expansion can be extrapolated from its tremendous growth over the years ,particularly given the expensive leasing prices in Singapore retail malls (Heng, Singh ,& Kua ,2016).Indeed, according to Euromonitor International estimates (2016), the Korean beauty wave ,particularly the availability of natural products ,is expected to continue to be a major driver of the beauty and skincare industry’s growth in Singapore .

MISSION, VISSON AND SWOT ANALYSIS

MISSION:

The brand’s purpose is to work in sync with nature, making natural skincare products from the island while also contributing to its preservation. Innisfree spends a great deal of time researching and studying the benefits of nature and then uses only the purest ingredients to create healthy and safe beauty products. 1.Making it cleaner and more friendly with the world. 2.Increasing the global popularity of natural products. 3.Convey the products to the consumer in a safe and healthy manner. 4.Bring happiness and satisfaction to the customers.

VISION:

It shares the benefits of nature from the beautiful island of Jeju, allowing for colorful beauty and pursuing an eco-friendly green lifestyle in order to preserve the natural balance.

SWOT ANALYSIS

STRENGTH 1. The high level of R&D expenditure and the high level of consumer confidence in product quality. Because of the speed and originality with which cosmetics products are developed in the country ,Amore Pacific is developing as a center for innovation in the sector .R&D is critical in developing their one-of-a-kind amazing things .R&D is in charge of identifying the best products for this customer’s needs .Due to numerous requests ,Amore Pacific chose to deepen its R&D as part of its localization plan .The company has spent a significant amount of money on research and development ,which has resulted in innovative items that have been granted patents .Amore Pacific was awarded four patents in 2014 ,the most important two of which were for goods containing natural volcanic stone and red ginseng .The company’s innovative goods earned great popularity and botanical plants and other inventive and natural ingredients .The corporation built R&D centers in a variety of international locales ,including China ,where these institutes work with local scientific institutions . 2. High levels of international expansion and market share (CHINA) In the Asian market, Amore Pacific has a great brand awareness. This company’s unfettered growth was fueled by a smart international strategy ,which resulted in a 160 percent gain in share price this year .In terms of foreign operations ,the company’s current statistics reveals that international sales account for one-fifth of the company’s revenue ,up 38% in just the first half of the year .Outside of South Korea ,China is the company’s largest market ,accounting for 8.6% of sales in 2013 .By 2020,China is estimated to account for 30% of Amore Pacific Group’s overall sales .Furthermore, the South Korean cosmetics company plans to build more stores this year ,which will appeal to a wealthy Chinese middle class looking to indulge . 3. Securing a diverse distribution network The company’s cosmetic items are distributed through a vast network of street shops or the three big department stores ’long-standing supremacy (Hyundai ,Lotte ,and Shinsegae) .Hypermarkets ,online sales and TV-Home shopping channels account for a modest portion of the industry .The majority of imported cosmetics brands are available at department stores .By providing a mobile platform and acquiring new online channels ,the corporation has also adapted quickly to current developments in distribution channels ,which include the internet and home-shopping channels .

WEAKNESSES 1. Cosmetics have a high level of dependency. There are subsidiaries of Amore Pacific that are not in the cosmetics industry. Pacific Pharma, which joined Amore Pacific in March 2015 ,and PACIFIC GLAS ,a container manufacturing company ,are two of the non-cosmetics affiliates .the performance of non-cosmetics was quite low, according to the annual report of 2014.By turning up its pharmaceutical business ,Pacific Pharma saw its revenue and profitability drop to 79.1 billion Korean won (-37%) and minus 3.6 billion Korean won (-186%),respectively. Because of the rising cost of retrofitting facilities ,PACIFIC GLAS has maintained a loss in operational profit .This means that Amore Pacific’s revenue is mostly defined by and dependent on cosmetics affiliates ,while non-cosmetic businesses do not have industry compatibility. 2. Organic growth Amore Pacific’s sales results are noteworthy because the company has established a strong reputation and a leading position in the Korean cosmetics sector. However, the company still has a long way to go to realize its aim of becoming a global brand, as it must improve its position in already-penetrated regions and expand its list of international markets. Amore Pacific is reliant on organic growth, which takes a long time in most cases. If the company wants to develop and grow more quickly ,it should leverage M&As and joint ventures in the same way that other worldwide brands do. In comparison to their goal and other worldwide cosmetics brands, such as L’Oréal, the company’s market expansion is insufficient. OPPORTUNITIES 1. Korean wave Over the last decade, the global rise of Korean pop culture has drawn attention to skincare products used by Korean celebrities, particularly those featured on beauty websites and blogs. The “Korean Wave”, or the popularity of Korean pop culture, has dramatically boosted the reputation of Korean cosmetics, particularly in China. 2. Increased interest in male beauty in South Korea It is worth noting that nowadays, not only Korean women spend a lot of money on cosmetics, but males do as well. On a global scale, South Korea is known to have become the largest market for men’s cosmetics, with the men’s cosmetics market in the country increasingly focusing on gender neutral goods. Due to a larger and more diverse set of people interested in cosmetics items other than women, Amore Pacific is obtaining more target customers.

3. Cosmetics industry’s stability The Korean beauty and health-care business has been steadily expanding in terms of exports and imports, as well as total market size and product and service diversification. Korea is one of the most lucrative countries in terms of cosmetics and health-care related items, thanks to expanding life expectancy, a growing desire for better life quality, and a great fondness for a youthful and healthy appearance .Even in the aftermath of the global financial crisis ,the industry shown its ability to weather the storm .This suggests that Korean consumers ,regardless of their financial status ,are excited about purchasing cosmetics .

THREATS 1. Import regulations for cosmetics in China. Pre-market approval or notification from the Chinese State Food and Drug Administration is required for all cosmetics imported into China (SFDA). Administrative Approval or Administrative Notification are the two terms used to describe the approval. Before entering the market, all regular cosmetics must be notified to the SFDA, and special use cosmetics must receive Administrative Approval. Furthermore, cosmetics containing new ingredients that have not previously been approved for the Chinese market require special pre-approval from the SFDA before they can be used in Chinese-market cosmetics. This entails a lengthy and complicated procedure. Due to the Chinese government’s tougher licensing process for all imports, the launch of one of Amore Pacific’s brands, Sulwhasoo ,has been postponed . 2. Global Marketing of a Foreign Company Western cosmetics giants such as L’Oréal and Estée Lauder have already imported Asian-inspired beauty products to the United States ,such as sheet masks .Bamboo grass, mushrooms ,and snails are among the new sources of inspiration for Western cosmetics businesses in Asian countries ,including South Korea .Because Western customers have already encountered those products from their own country’s brand ,the introduction of Asian original cosmetics ingredients into Western countries may stymie Amore Pacific’s globalisation strategy because the cosmetics Amore Pacific provides may no longer be fresh or innovative to Western customers .Furthermore ,Procter & Gamble , L’Oréal ,and Beiersdorf goods are well-known and sold in South Korea ,as are items from other foreign corporations .Kiehl’s is a non-Korean brand that has experienced fast growth in recent years ,with annual sales volume increasing by three-digit percentages . What was notable was that the company did not spend a lot of money on marketing, instead relying on an unparalleled word-of-mouth marketing effect from devoted Korean customers. This could be the most serious

threat to Amore Pacific, because if customers increasingly gravitate toward international brands ,the company’s products will lose appeal and even market share in its home country.

SWOT ANALYSIS

STRENGTH  The formula for our product is unique-unlike other brands.  Our snail mask’s ingredients are of excellent grade.  Our firm has a big number of largescale machines-we can produce in large quantities.  This snail mask was developed during 3 years of study and development.  Organic ingredients.  Recycle containers.  Enlisting the help of eco-friendly campaigns.

OPPORTUNITIES  South Korea’s fashion is on the riseHong Kong people are affected by the Korean dramas, idols, and pop music.  Increase confidence in purchasing Korean skincare products due to a positive public image.  Women in Hong Kong have a lot of spending power when it comes to skincare products.  Men are becoming more conscious of their appearance and are beginning to use skincare products to safeguard their skin.  The skin of Vietnamese people resembles that of Koreans.  A variety of online and offline distribution channels.  Cosmetics from other countries account for 90% of sales, while

WEAKNESSES  The selling price is high due to the high production costs.  Our snail mask’s packaging is unappealing.  We cannot devote a lot of money and resources to this product because we have a lot of other skincare items in our company.  Brand recognition is low.

THREATS  The escalating rate of currency exchange (RMB) –as our factory is Located on the Mainland, manufacturing costs are increasing.  Because Hong Kong’s weather is not as dry as South Korea’s, people may not use our snail mask as often.  Medical beauty treatments are becoming more popular, as traditional masks are no more appealing.  Substitute items with similar functionalities with high power.  Vietnam’s underdeveloped cosmetic industry is so attractive and promising, the number of rivals entering the country is growing.  Individual retailers are increasingly selling cosmetic products online at lower prices.

native brands account for barely 10%....