Essay on Agilent
Sa Sa Cosmetics is a very successful Hong Kong based discount cosmetics retailers. The case describes how Sa Sa became successful, culminating in its IPO in 1997. Since then, however, its fortunes have declined somewhat. Most big companies have faced a crisis period after 10-20 years of their induction. We believe that Sa Sa Cosmetics is passing through a similar phase as these big companies. They lost their core competency in discounted retail stores as many new competitors came up with …show more content…
In 1989, Sa Sa’s lease was due to renewal, and the lad lord doubled the rent, Kwoks decided to abandon the place and move to a new street-facing 800 square feet retail space in the neighbourhood. In order to retain the customers and continuity of the operation, they maintained both the old and new location for 6 months in order to inform their customers of their move.
It was a big hit, generating nearly $30,000 on the day it opened. In the next few years, Sa Sa’s sales continued to grow to reach a monthly average of $770,000. Realizing the growth potential, Kwoks began opening more stores.
By mid 1990s, Sa Sa had 10 stores in major shopping districts in Hong Kong. On June 13, 1997 Sa Sa completed Initial Public Offering and was listed on The Stock Exchange of Hong Kong. It was a huge success; they raised approximately $100 million.
A typical Sa Sa store had 2,000 square feet of retail space, approximately 600 brands of 18,000 SKUs. Products were categorized into four groups: skincare, cosmetics, fragrances and hair care and accessories. Sa Sa’s pricing strategy was to offer value for money. In general, Sa Sa set prices within the customers’ comfort-zone, which were considerably lower than the MSRP. Each store consisting of a supervisor and 12