Course
SWOT Analysis
STRENGTHS
The company teams up with other investors to develop a chain that has seen France record 54 stores which is almost an 8% of the total French prestige perfume market
The company has a great record in creating partnerships and building strong relationships with cosmetic manufacturers who provide a wide range of cosmetic products
Sephora stores have a features that set the mood and the tone of the environment as the black, white and red colours generate a cool feeling while alternative music and pop music brings a party atmosphere thus most attracting youthful customers
Sephora allows customers to experiment with products like eye shadows and lipsticks in their stores
Sephora stores have employees that are trained on a variety of products and are non-commissioned to offer guidelines to customers with queries
The company has exceptional organization as seven departments effectively coordinate to meet the company’s objectives and customer needs, including a call centre for the company
It was targeting women between 25-35 as the main market by 2010 most of whom have grown with Sephora
WEAKNESSES
Sephora mostly relied on brands that were less known to make their shelves full
Sephora includes all of the prestige brands except Chanel and MAC cosmetic products that are offered by their competitors
Most of Sephora stores are not in locations that are termed “off-mall” and do not have ample parking space compared to their close followers ULTA
The confidentiality of the customer in the company’s Facebook page is not guaranteed
The companies has issues on determining optimal investment levels for the investors due to its revenue
Sephora only favours cross-promotional opportunities rather than working with brands sold at its stores on a personal level
The company applies a traditional method of calculating the ROI
It was hard for the company to predict substances that would entail profiting from substantial traction
OPPORTUNITIES
Many of the beauty companies offered to pay Sephora to seek cross-branding through using Sephora’s Facebook site to conduct surveys and polls
Several companies like Shopkick had been considered to be partners with Sephora since Shopkick is an excellent platform for shopping in different retailers
Sephora was offered an opportunity to launch a new fragrance that would be exchanged for promotion of the highest level
New technology platforms offered numerous opportunities to the company as Bornstein increased allocations for the 2011 budget
The company has a great opportunity to offer exquisite beauty advice to the public via Beauty Talk
Sephora’s social media platforms have initiatives that develop an emotional connection that cannot be determined in quantity
THREATS
The rapidly changing digital media landscape proved to be an obstacle to a strategic plan of three years for Sephora Direct
It became hard for the company to determine substantial traction that would be gained in the coming one or two years for the start-ups
The company funds the digital e-commerce ventures oin a daily basis which is a threat to revenue returns
The company faces a threat of measuring its success with media platforms that are new based on return on investment
The company faces a threat of lacking innovation when they become more mainstream
Issues
Customers raised concerns on the app specification the company developed to meet customer needs. Only the iPhone app was made, with blackberry and android phones having no versions by August 2010 (Short term)
The company is still finding a way of calculating the return on investment (ROI) traditionally (Short term)
The company’s balance that needs to be maintained after one of its competitors, Starbucks, established through counterinsurgency (Long term)
Problem Statement
Lack of innovation turns a customer off. Sephora spends a lot of capital in digital avenues to market itself but does not focus more on innovation. More competition is coming from Ulta due to its qualities of being innovative, down to earth, and approachable in style to the customer. This matters as there is divided allegiance between Ulta and Sephora on the customers’ side.
Case Response
Sephora needs to put more emphasis on technical innovation that meets the customer’s interests and will help the company come up with a strategic team with experts on solutions, delivery, and management. This will break the barrier of calculating ROI through a powerful project.
