I witnessed a strama defense late last week on beauty industry
I saw some difficulties in the strategy paper:
1. The business in engaged in 3 sub businesses: skin, spa, beauty products. Hence there is no strategy b
because strategy means focus on an objective.
2. The author did not include the focus vs multiproduct as a strategic issue.
3. On the opportunity (EFE) the question ask are: where is money to be made (high GP rate, or high sales rate on thin margin)
This should have been analyzed on their product line up and the services in the industry. What does the data show
Furthermore, the culling of data from SEC was a hostile data for the author: the NI and sales were declining
4. A panelist inquired if the services were price sensitive. She said no, beauty product is a superior product, it recession proof yet mentioned it as threat at her EFE
5. The proliferation and expansion of malls was cited as an opportunity; yet it was mentioned that there were franchises that lost money
Going back to the main strategic issue: which is better - multi product or multi brand strategy or single product. In the industry, the beauty products those who focussed on Spa alone, fitness alone, surgery alone made the most. As for the shot gun businesses?
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