Document Type


Publication Date

Fall 2018


Ron Khormaei

Course Title

Strategic Planning

Course Number

ETM 525/625


Cosmetics industry -- Strategic planning, New products -- Management, Management -- Technological innovations


REA is an American company that plans to enter the beauty and skincare industry. It wants to enter the skincare industry with a range of innovative products. However, we will focus on analyzing its moisturizing cream and creating a strategic plan for the product.

In our research we were able to understand how the firm studied the current conditions in the skincare and beauty industry to identify a potential business opportunity. We believe that the firm has been successful in recognizing the opportunity and developing a product that would be able to exploit the opportunity they identified.

We studied the general, industry and competitor segments to determine the vision, mission and goals for the firm. The strengths, weaknesses, opportunities, and threats presented by the segment were analyzed to shape our strategic decisions. Many opportunities for product development and promotion were envisioned. It was also determined that some of the threats and weaknesses can be mitigated by patenting the technology, trademarking the products and marketing it to the right customers with the right medium at the right time.

We determined that creating a MVP, generating capital and launch of the MVP are appropriate goals for the stage and size of the firm. We detailed the strategies to achieve individual goals and were able to identify opportunities for expansion of the business strategy for future growth. Based on our analysis of the internal environment, we were able to identify the value proposition for the firm along with the core competencies for short-term as well as long term above-average returns for the firm. The reputation, reach and knowledge of the founder along with the differentiated product are the core competencies for this firm. We suggest investing in the development of the differentiated product as the competencies to develop for future to maintain the competitive advantage for the firm.

We have also identified the customer for the initial offering for the firm. We created and conducted a survey to establish the market need, medium of promotion as well as a lucrative price point for the offerings. We were able to validate the customer persona as a potential target customer segment for the product. The data from the survey formed the basis of some of the strategic decisions we made and the directions we decided to take for the firm.

From the initial assumptions and survey results, the Marketing Mix 4P for the product was developed. Most of the initial assumptions were supported by the survey results. The amulet and truffles will be sold separately. However, these cannot be used separately and the sale of both products are highly correlated. The acceptable price ranges were found to be $80 - $120 per box of truffles that last for a month and $150 - $200 for an amulet. It was also determined that a combination of the 2 offerings should be sold as a starter kit to the customers.

The selling place was determined to be beauty product outlets, salons, and spas in upscale locations. Online sales and subscription-based sales should also be available for continued sales to the targeted customer segment. For promotion, the most cost-effective way was found to be digital marketing through social media and product website. These would also be used to engage the customers with education and product videos. The visual differentiation of the product was also determined to be a key driver for continued customer engagement. Social media influencers were identified as a key player in expanding the reach and acceptability of the product.

A high-level financial analysis was done to check the financial viability. According to the set assumptions, the breakeven would be achieved in the 4th year of market launch. However, this is subject to change based on product development and market response.

We have also determined that based on the response to the initial offering, we should revise the goals, strategies and tactics applied to fully exploit the identified customer segment while formulating goals and strategies for expanding the customer segments with extended line of products if needed.

The Lean Startup model is applicable to the product strategy as the product needs to start with minimum production, incorporate customer feedback, and continuously improve the operations.

Persistent Identifier