Essay about Cosmetics Industry

9879 Words Mar 28th, 2012 40 Pages
MGMT 4842
Group Case 2

Retail Specialty Cosmetics
Industry Analysis

March 19, 2012

TABLE OF CONTENTS Industry Type Degree of Industry Concentration Opportunities and Threats Opportunities Threats Past and Projected Market Growth Rate Competitive Analysis New Entrants Substitutes Rivalry within the Industry Suppliers Buyers Driving Forces Analysis Industry Key Success Factors Financial Analysis Works Cited

Retail Specialty Cosmetics Industry Analysis

Industry Type, SIC and NAICS code

The Cosmetics Industry involves providing the consumer a product that will give them the ability to improve the appearance or scent of
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“In 2009, the latest data from the Bureau of Labor Statistics shows that the average consumer spent $596 on personal care products and services.” (Beauty, Cosmetics & Fragrance Stores in the US)Despite having a few years of economic downfall the cosmetic industry has been able to grow consistently over the last 3 years.

Degree of Product Differentiation

The degree of differentiation between cosmetic stores is very slim. Most of the beauty stores will carry the same products even though some will have a better selection of brands. Once the customer has found the product he or she desires the only reason to go to another store to look for the item is due to brand loyalty. For example you would be able to find shampoo at Harris Teeter and Wal-Mart and stores such as these but if you are looking for a specific brand then I suggest going to a beauty store where the variety and selection would be much greater. There are beauty stores that have a wide variety of products and then there are specialty stores that contain specific items. These stores include specialty hair care, nail care, and sun care that focus on a particular aspect of cosmetics. Products in the cosmetic industry have a variety of different market shares while the skin care products have the largest revenue. “Consumers are more likely to purchase beauty products from well-known and well-respected retailers that operate on a wide scale, rather than from a local beauty shop that has no reputation.”

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