The assessment is the case �Inglot�.
You have been asked to prepare a report. In doing so you should address the following aspects:
- Outline firm-level (micro) and country-level (macro) factors contributing to the development of
INGLOT�s competitive advantages and discuss their sustainability. - Develop INGLOT�s strategic plan for the next five years with a concrete outline of recommended
geographical expansion, business model evolution and product diversification.
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Table of contents
Executive summary………………………………………………………………………………3
Introduction …………………………………………………………………………………….4
Background of the company…………………………………………………………………….4
Firm-level (micro factors)……………………………………………………………………….4
Country level (Macro factors) …………………………………………………………………..7
INGLOT strategic plan for the next five years………………………………………………….10
Recommended geographical expansion…………………………………………………………11
Business model evolution ……………………………………………………………………….11
Product diversification……………………………………………………………………………12
Conclusion……………………………………………………………………………………….12
References ……………………………………………………………………………………….13
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Executive summary
INGLOT Cosmetics Company located in Poland is one example of a company that started small
and expanded. The company, which deals in cosmetics, has managed to grow and expand in
various countries by investing back of its profits. The company has managed to maintain its
markets niche in various countries and regions. The company microenvironment factors such as
customers, competitors, distributors, media, suppliers and general public have played as key role
in its expansion strategy The company values and embraces its customers. It designs and
manufactures products that comply with the needs of the customers. This has played a key role in
its success and its expansion to many countries
The company as well has gained a competitive advantage though its franchise strategy in
reaching many customers spread across the county of its operations. The company takes time to
analyze and research markets before making decision to invest in such markets. Macro
environment factors have as well impacted on the company competitive advantage. Some of
these macro environment factors include political factors, economic, social cultural competitive
and technology. The company has enjoyed political stability in the countries it operates. This has
influenced its business investments. It also complies with the legal aspects such as tax remittance
and registration requirements.
The company as well has a strategic plan of five years whereby it aspires to expand its business
to 110 countries. This strategy will enable the business to have a bigger market share. Through
benchmarking, the company will be able to compete and with overtake its competitors. Product
diversification as well opens an opportunity for the company to expand.
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Introduction
Every company either locally or internationally endeavors to achieve its set objectives.
Achieving objectives requires adoption of different strategies that can enable the company to
gain competitive edge and take over bigger market share to accrue huge profits. Various factors
and strategies come into play that contributes to business success. This report focuses of
INGLOT cosmetic company. The report addresses the firms’ micro and macro factors that have
contributed to its development of competitive advantage. It also covers on the sustainability of
these factors. A strategic plan for the next five years with an outline of recommended
geographical expansion, product diversification and business model are addressed.
Background of the company
The company founded 30 years ago in Przemysi town, as cosmetic firm has become one
of the leading firms in colour cosmetics. It began its international expansion in 2006 and
currently it operates franchises in more than 70 countries across the six continents (Marketline
Plus, 2014). The company has about 500 boutiques stores retail locations and stands across the
globe. The company has more than 1500 colors with 450 varieties to improve lips, 300 to portray
ones face and 600 to enhance customers face and up to 400 shades of nail polishes (Marketline
Plus, 2014). The company is performing well in the market due to its various strategies that it has
implemented in its operations.
Firm-level (micro factors)
INGLOT is affected by microenvironment factor that have contributed to its competitive
advantage. Microenvironment factors are immediate are operations that affect the company
decision making freedom and performance. Some of these factors that are relevant to INGLOT
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cosmetics include, customers, competitors, distribution channel, general public and the suppliers,
media and employees.
One of the major factors that have contributed to the company’s competitive advantage is
customers. Customers are the major focus of the company successes (Klovienė 2012).
Customers have contributed to greater height in the achievement of the company through their
loyalty and support. The company has invested in their customers by providing products and
services that meet the needs of the customers. The company identified the demand of the women
products and this made them to take advantaged and to provide the same hence, achieving high
profits. The fact that the company has invested a lot in improving its products has contributed to
increased and widening customer base which is evidenced with its expansion initiatives
(Marketline Plus, 2014).. The company has invested in innovation which has kept it ahead of its
competitors in the market. For instance, the company manufactures revolutionary O2M
Breathable Nail Enamel that used water and oxygen vapor permeability that is fashionable, good
looking and healthier. This nail enamel has attracted many customers that have contributed to
increased number of customers that are using the company products (Marketline Plus, 2014).
Competitors are other important microenvironment factors that have affected INGLOT
cosmetic. Competitors compete for the same market share because they have similar or
substitutes products. To overcome competitions, companies adapt to different strategies such as
focus cost or differentiating strategies. Cost strategies allow a company to reduce the costs of its
products or services to win over the competitors. Focus strategy, a company focus on a specific
target market while differentiation strategy, a company provides quality products that meets the
needs of the customers in the market. Such customers are not sensitive to the price of the
products (Marketline Plus, 2014). Like many other industries, INGLOT has a number of
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competitors such as Halal cosmetics that are growing faster. INGLOT cosmetics has managed to
attain its competitive advantage in the market because of its low cost strategy. The company
offers its prices at low prices below the competitors. The prices offered provide mark up for the
company because of the low production costs. The company has as well innovative and quality
products that attract more customers to purchase the products.
Distribution channel is another microenvironment factor that has affected the company
competitive advantage (Markman & Waldron 2014). The company has adopted franchise as its
distribution strategy that has seen it expand and reach in many areas. This strategy has enabled
the company to have a larger market share that has enabled it to remain competitive. The fact
that the company products are easily accessible to its customers in various locations makes it
accrue higher revenue through this wider market. The company has achieved this stride which
has enabled it to provide stiff competition to other companies that have not been able to expand
in their distribution networks (Marketline Plus, 2014). The company has well invested in its
employees which have contributed to its competitive advantage. The company appreciates the
contribution of employees. This has contributed to the success of the company. Employees
receive training to help add value to the company
Suppliers as well contribute to the competitive advantage of the company. The company
has established positive relationships with its suppliers and this has enabled the company to have
smooth flow of materials that has enabled continuous production of these products. The media
has as well contributed to greater magnitude to competitive advantage of the company. Media
through its advertisement has enabled the company to improve its images and as well showcase
its products. The market of the company has increased tremendously over the years through
media advertising and marketing. (Marketline Plus, 2014). Media plays a key role as one of the
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channels for reaching and informing customers on the various products and services. The
company has utilized the media platform making it more visible and famous compared to its
competitors something that has elevated it and widened its market share. Public is yet another
micro factor that has actually contributed to the success of the company. The members of the
public have supported the company and portrayed it positively making it attains a positive image.
These factors are sustainable as well have helped the company to sustain itself.
Country level (Macro factors)
Macro environmental factors are external factors that affect the operations of the business
and may as well have impact on its competitive advantage. Any company that operates in a
country across the borders on internationally level must ensure that they factor in these macro
factors to be able to attain a competitive edge. INGLOT cosmetic is one of the companies
affected with these microenvironment factors. These factors as well have a number of effects on
its competitive advantages. Some of the microenvironment factors that affect the company
include political-legal factors, economic factors, social cultural factors, competitive environment
and technological factors.
Competitive environment affects the competitive advantage of the company (Toole &
Lutz 2005). These factors include availability of competitive products, companies that compete
for similar consumers, substitute products among many others. INGLOT cosmetics is operating
in a competitive environment with other similar companies that have already established their
market niche in various locations. These companies have as well substitute products that they
sell to the consumers which reduces the number of consumers that purchase INGLOT cosmetic
products. INGLOT is not a monopoly and that is the reason why it has adopted cost strategies to
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woo many customers and compete in the market both locally and internationally. To develop a
competitive strategy, the company undertakes research of the markets to identify their suitability.
The company as well through market research identifies current and potential competitors, which
enables it to adopt to appropriate marketing strategies. The facts that the company anticipates
competitive actions has as well enabled it to vigilant and to promote innovations by coming up
with new products that makes it to compete favorably.
Political- legal environment as well affects the operations and competitive advantage of
INGLOT cosmetics company (Markman & Waldron 2014). Business operates in an
environment that has laws and regulations that they need to comply. Businesses are as well
expected to interpret these laws and ensure that they adhere to them as they as well protect the
rights of the consumers. Any company is expected to register and to have a certificate of
operation both locally and internationally. The company is as well expected to remit its tax
returns and adhere to any other laws relating to labor laws and environmental laws among many
others. INGLOT cosmetics operate in different countries that have different political and legal
environments. The company, nevertheless, has satisfied all these laws and legislations pertaining
to particular nations they operate in. Furthermore, the political stability of a country affects the
profitability of the business. So far, INGLOT cosmetics has been able to extend its products in
countries that experiences political stability. This has made the company to have conducive
environment of investment something that has contributed a lot to its increased level of
investment (Marketline Plus, 2014).
Various institutions ensure that the company operates well and does not deviate from the
activities or business initiatives they are registered to operate. These bodies includes the
government which provides licenses and ensure compliance with the law and issues to do with
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tax remittance and labor laws. Others include consumer safety that ensures that the products
meet the recommended standards for consumers. Products should not cause harm to the
consumers. Other bodies include, environmental protection agency that concerns with issues of
environment, health and safety and consumers interest groups among many others. These bodies
work independently to ensure that the company operates within the set thresholds.
Economic environment as well affects the competitive advantage of the INGLOT
cosmetic company. Economic factors influence the buying behaviors of the consumers. Their
buying power and strategies is dependent on the economic situation of the country. Different
countries experience different economic growth trends as some experience growth while others
experience slow growth. Such dynamics affects the operations and profitability of the country.
The stages of business cycle in these countries vary from one country to another and as well
affect their business performances. Inflation rates in the country as well have negative impacts
on the company products. During inflation, the company experiences decline in its profitability.
Deflation as well has impacts on the performance of the business the level of unemployment as
well affects the capability of the consumers to purchase these products. (Marketline Plus, 2014).
High level of employment means that consumers have higher level of incomes and can be able to
access these products. This therefore impacts positively on the company level of profitability.
and vice versa. The resources available in the company as well affect the performance of the
INGLOT cosmetics company. Currency fluctuations and exchange rates in these countries vary
as well have impacts on the company profitability. Some of the currencies depreciate and this
affects the profitability of the company as they incur some losses.
Technological factors as well affect the operations of the company as well as its
competitive advantage. INGLOT cosmetics has adopted technology by adopting to e-shop . This
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has enabled the company to be creative and innovative reaching many of its customers in various
places. The company has therefore adopted technology to sell its products as well as to market
its products to customers in various locations through technology hence being able to achieve a
competitive edge (Marketline Plus, 2014). Technology as well has improved the services and
products as this has led to effectiveness and efficiency in the production process. Compliance
has as well improved with technology making the company to operate smoothly.
Socio-cultural factors as well affect the competitive advantage of the company. The
company understands the dynamics of operating in the various regions and therefore, they ensure
that they adopt to suitable strategies that the particular customers in a certain region or country
want. This is achieved through modification of their products as well as strategies. For instance,
in their advertisements, the company uses languages that customers in the targets markets
understand. This ensures that their communication reaches the intended audiences. The company
as wells keeps into consideration the customers, and manners, material culture, social
institutions, religions among many others in their promotional strategies to win over their
customers. these factors are sustains the company and have enabled it reach this far.
INGLOT strategic plan for the next five years
In the next five years, the company wants to achieve set objectives. To achieve these
objectives it must have a strategic plan that acts as a framework. The plan provides the target
sales outcomes and the strategies the company wants to adopt to achieve the same.
One of the strategies is to establish positive relationship with the stakeholders including
suppliers, government and retail outlets to compete favorably. another strategy is to expand to
other 40 countries by the year 2019 this expansion strategy will see the company cover a wider
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market share. The company will also use internet and media to advertise the products to
consumers. The company believes that information is paramount in ensuring that people makes
purchasing decision (Marketline Plus, 2014). The company as well aims to reduce the cost of
productions by recycling its raw materials. This will enable the company to accrue high profits
through its low cost strategies. Furthermore, the company will use celebrities in its promotions
to gain a huge market. This will help the company to reach many customers. The fact that the
company is a cosmetic company makes it easier and viable to use celebrities to reach many
people.
Recommended geographical expansion
In the company expansions strategy, it must factor into consideration various factors
such as the culture, of the markets, the number of competitors in the market, the size of the
market, the cost of distribution, the political environment among many others. These factors are
critical because they will determine the competitive advantage of the company in the region. The
company intends to expand to more than 110 countries across the globe to make the total number
of countries that it operates to be 110. The countries cut across the six contents more so in the
Africa, Middle East and the South American continents. These markets have not been explored
and therefore, the company stands a chance to accrue huge profits from its operations in the
region.
Business model evolution
The business model to be adopted is benchmarking whereby products and process are
going to be measured against those of other organizations. INGLOT will therefore be able to
gain insights on its performance through this comparison. It will gain information on its internal
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and external performance of its products in line with those of their companies. INGLOT will
have an opportunity to search for the best practices that will enable it to record superior
performance levels (Denrell 2005). The company will achieve a strategic advantage, as it will
focus on its critical capabilities to develop a strategic advantage. Though benchmarking the
company will as well increase its learning rate hence facilitating its experience sharing (Jack
2004).
Product diversification
The company will also adopt a strategy of product diversification to ensure that it
achieves a competitive edge. The company even though has various products; it will still
improve in its innovations to ensure that it remains competitive. The customers will have
numerous options to choose form the company products.
Conclusion
INGLOT cosmetics is one of the companies that has managed to attain a competitive
advantage through its strategies that it has adopted. The company managed to grow and expand
to various countries. Various micro and macro factors affect the company competitive
advantage. The company still has to adopt other strategies such as product diversification to
expand to other regions to maximize its profits. The future of the company looks bright
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Reference list
Denrell, J 2005, ‘Selection Bias and the Perils of Benchmarking’, Harvard Business Review, pp.
114-119.
Jack, B 2004, ‘Quality Essentials: A Reference Guide from A to Z’, ASQ Quality Press, pp. 8–9.
Klovienė, L 2012, ‘Institutional factors as criteria for business environment identification’,
Economics & Management, Vol. 17 no. 4, pp. 1245-1251.
Markman, G, & Waldron, T 2014, ‘ Small entrants and large incumbents: a framework of micro
entry’, Academy of Management Perspectives, Vol. 28 no. 2, pp. 179-197.
Marketline Plus. 2014, Inglot Cosmetics. Inglot Cosmetics – How a Small Firm with Vision
Successfully Challenged Established Business Rules, pp. 1-25
Toole, J, & Lutz, J 2005, ‘Trade Policies of the Former Centrally Planned Economies’, Global
Economy Journal, Vol. 5 no. 3, pp. 1-21.
