Estée Lauder: External Audit
Opportunities
• There is a lot of room for international expansion. Estée Lauder is a well-known brand, and therefore once it enters new markets it should be able to establish itself without much difficulty.
• Estée Lauder owns several brands, which allows it to reach out to customers of all income ranges. Furthermore, it supplies everything from makeup to fragrances to hair products.
• Estée Lauder is a successful company, and can afford to take additional brands under its wings. This can prove to be especially beneficial if it buys out brands in foreign markets, such as China and Africa, to be able to increase its market share.
• Estée Lauder has the prestige and brand loyalty, to be able to expand further into the fashion industry, by introducing products like handbags or jewellery
• Estée Lauder’s reputation and credibility allows it to sell products at a higher price,
Threats
• Intense competition is the major thereat for Estée Lauder. Therefore, it needs to be aware of what the competitors are doing, and respond accordingly to retain its market share.
• Inadequate research and development, and testing can result in lawsuits, if a product impacts customers adversely.
• Because Estée Lauder sells products in different parts of the world, restrictive trade policies of other countries may become an issue. Also, exchange rate fluctuations can impact the company’s bottom line profit considerably.
Key External Factors
Economic Forces:
Estée Lauder owns various brands that cater to different consumers. For example, Estée Lauder caters to the higher end clients, who are willing to make a considerable investment in their skin care, whereas Clinique brand caters more to middle-class consumers. Therefore factors such as disposable income, tendency of consumers to spend, and economic conditions are an important factor.
Since most of the brands owned by Estée Lauder cater to high-end or middle-class clients, the...