Case Analysis of Sephora Direct Essay

2186 Words Apr 3rd, 2014 9 Pages
Case Analysis of Sephora Direct

MAR 6815

December 4, 2013

Problem Statement
The main issue with Sephora Direct is that Julie Bornstein, Senior Vice President of Sephora Direct, wants to double the budget for social media, video, and mobile in 2011. For the funding to be doubled, Bornstein must first convince David Suliteanu, President and CEO of Sephora USA. To convince Suliteanu, Bornstein’s team must identify what the company could gain from “winning” in the social media, video and mobile space. Also, figuring out what a “win” will mean for the company and how to measure the success of these digital efforts is important for Sephora.
Situation Analysis
The Sephora Direct Group is responsible for all of
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Will profits increase? Why will profits increase?

2. Maximize Customer Satisfaction And Retention: Customer satisfaction and retention is very important for Sephora to remain profitable. Will doubling their social media budget help increase customer satisfaction? How can increased customer satisfaction with Sephora’s social media increase profits?

3. Measuring Success If the Budget Is Doubled: Where will the money come from? What does it mean to “win” with social media? What can be gained from “winning"? What would a win look like for the company? How can Sephora measure their social media success?
Analysis of Alternatives
Sephora must analyze the two alternatives: maintaining the status quo or doubling the social media budget for 2011. The criteria that will help make the decision are the potential for future profits, maximizing customer satisfaction and retention, and measuring success of the doubled budget.
Investing Helps Potential for Future Profits
Investing in social media will help acquire new clients because many regions do not have a Sephora store; therefore Sephora’s online presence can reach out to those regions to invite new clients and gain more profit. Sephora’s e-commerce was projected to generate 15-20% of Sephora USA sales in 2010. Another benefit of e-commerce is that Sephora.com offers higher margins than a typical store due to lower

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