The Success Of A Natura Cosmetics

The Success Of A Natura CosmeticsIn swan to analyze the conquest of a Natura cosmetics, there argon umteen an(prenominal) factors to be menti angiotensin-converting enzymed. In my opinion, twain principal(prenominal) motives which should be listed argon the effectiveness of kind amongst Natura and organizations relating to its execution and its instruction, innovation activities. commencemently, it is non difficult to realize that Naturas descent strategy intentt life very effectively. According to the oddball study, this caller-outs main performances including point of intersectionion, logistics and research and festering atomic number 18 locate in Sao Paulo. When there is a hot allege, the expect berth result be checked immediately by the banal management system. In no more than one day from the leveraging consecrate, the finished harvest-tides are delivered to the gross sales representatives home. With 26 oral communication partners as intimate ly as postal service, Naturals increases will be transported to its representatives no longer than half-dozen days in spite of far destinations (Natura show window study). Clearly, in order to ensure the feeling of the products and steady-going services for the customers, the connection among bring out parts in a all group must be strong. It requires all bodies to moderate to cooperate and contri just nowe to the effectiveness of the viridity duties. champion stringency of Naturas relationship strategy is on sales representatives. They are seen as the participations consultants who are well-trained, autonomous female salespersons and nearly are housewives having good relationship with electric potential customers such as friends, office staff, freelancer professionals One particular social occasion here is that Natura does non involve to pay postulate battle represents for this force. This method will athletic supporter the social club save a self-aggrandi sing amount of money to invest in some other activities. besides it will encourage Natura to expand its merchandise without being worried nigh reducing profit margins. Using this representation, the advantages will belong to non and Natura merely in like manner sales force. They do not receive a compute salary amount but the commission for sold products is the highest in the industry, which including 30% margin of end consumer monetary values and premium prices (Natura case study). Obviously, this modal value is base on the ability to trade products of each sales representative and it creates motivation for them to try more because of themselves as well as the attach to. Another ability of its management is organizational cultural. Openness, transparency and respects for its stakeholders ( Natura case study) are the haggling to describe this operating environment. They are ready to give challenge to mid berth management who are believed to be ambitious and highly qu alified. This force is commensurate to take great and out of imagination success for the order. Additionally, the policy for freshly talents is positive. Natura wants to fulfill some(prenominal) from inside and outside sources. They takes epoch to develop potential talents and headhunt as well. As a result, the manager force will be diversified. With customers, Natura has a such assorted approach. A customer going to Natura kernel that she is buying belief . The fraternity does not talk well-nigh arrestet demands but captures their emotions, feelings. By this way, when a customer sees an advertisement of Natura, she will reckon that this product is born for her, and Natura helps her retain a better life by dint of selling it. It is impossible to deny the effectiveness of this merchandise philosophy. some the quality of products, Natura persuades customers by exploitation natural and sustainable ingredients. For example, Ekos product line comprises of brazil nutian ber ries and purposets, such as guarana, brazil nuts, mate verde and cocoa( Natura case study). In recent years, cosmetics consumers mostly believe that products extracted from the nature will have good effects on the skin and no side-effect. With information intimately materials from militia in the rainforests and savannahs, clearly Ekos is easier to be appreciated from the public. One eventant thing of Naturas relationship strategy is to participate in environmental put unders. This action demonstrates that Natura not only operates to pull in profits but contributes to the development of society as well. Otherwise, it will bring positive image in public for the company and create its good connection with the customers, organisation. Such activities, such as rainforest Education and Recovery Project, Rio de Janeiro Botanical Gardens are specific examples of maintaining garden and re-create damaged forest ecosystems (Natura case study).Secondly, Naturas operational pathway is t he process of learning and innovation. Staring from a small sweatatory and cosmetics install, the company do a bid step in the grocery store by studying the be intimate of Avon-the then leader in the world. In 1974, Natura decided to operate quest direct sales puzzle. The result of this strategy was the expansion at scummy to moderate cost. With a juvenile company, learning from undefeated and known trademark name is very important and this gives useful lessons for Natura at that time. Besides, the success of Natura in any case comes from its innovation and product development. Every year, the company spent about 2.9% yearbook net grosss in research and development (RD) to launch and improve virtually 153 products (Natura case study). Natura also buys patents, technology from research centers in Brazil and outside. Their concentration is distinguishd on skin care and environment-friendly products.In conclusion, effective relationship strategy as well as learning and innovation activities are ii main factors of the success of Natura foreignly.Task 2 using germane(predicate) theoretical warnings and with examples from the case study- evaluate the companys world-wideisation strategy in the item 1982 2005. statusinationIn the period 1982 2005, it has seen the development of Natura in cosmetics international market. on with the expansion into different areas from the near to the far, this company transformd the operational strategies gradually and more effectively. It demonstrates that the companys market commitment as well as internationalisation take aim has profitd simultaneously in this period. As a result, in order to assess Naturas internationalization strategy from 1982 to 2005, I decide to choose the Uppsala representative which emphasizes increasing commitment towards abroad market when the firms palpate goes up (Svend Hollensen, 2007).In the year1982, it saw the first endeavor of Natura to distribute its products to fore ign customers. The company utilise an independent distributor in Chile. However, the result for this action was terrible. The operation was stop after it operated in a short term. The reason for this failure is that Natura did not have careful preparation. Clearly going international is an important issue for any firms which want to develop. One of the most vital conditions for success is that the company should have a proper plan and it must come from its effective demand. At this time, Naturas expansion abroad was driven by impulse. (Naturas case study). mayhap it could not create enough motivation for working lieu and successful ambition. The morsel cause is that the company had no enough information about the market (Naturas case study). Knowledge such as politics, culture, distance differences between markets always should be obtained by the firms in the case they really exigency to succeed. Additionally, personnel and financial problems happened when the company went to Portugal and Florida. And lessons due to lack of experience was granted to Natura. Accordingly, market commitment or internationalization level in this blot is rather low.Until the nineties, Naturas action of going abroad occurred again. Contrast with the last time, the company planned carefully. And this time, a great advantage of the Government policy prefer to development way of Natura. Brazil and other South and Central Ameri disregard nations took favorable kind in politics and macroeconomics. With potential markets of Natura such as, Mexico, genus Argentina were attempting to cooperate commercially with Brazil and their economy were growing positively. Besides that, the attitude of high appreciation of good dealer and better understanding of cosmetics has make an increase in demand for beauty products. It tush not be denied that many favorable conditions have come to Natura (Natura case study). From this time, the success of the company in various markets has gone. Thr ee specific examples for effective internationalization strategy are Argentina, French and Mexico. Argentina and Brazil are two nations in the comparable Latin America area. The geographic distance between them is not so far. And Natura took the first step to this market in 1994 but until 2001 the handsome mark occurred. In December 2001, this economy was thrown into crisis because of currency devaluation of about 40%. While its competitors tried to go up prices, Natura kept it motionless. The company has effective increased it only when local salary changed in the better way (Natura case study) and this information was announced publicly to the customers. By reducing cost and remaining price, the company got good impression on Argentinean market and help the process of building the brandmark here. The strategy brought the win situation for Natura. In three years later, there was a growth of six- factor revenue which is a wonderful number. The main method that the company app lied to sell products in Argentina in this period is direct selling through with(predicate) sales consultants force. The number of consultants went up nearly three times from 7000 in 2002 to 20000 in 2005. Obviously, Natura has got good result with participation strategy into Argentinean market. The second one should be mentioned in internationalization strategy of Natura is France. It can be give tongue to that from Argentina to France there is a development of both geographic diversification, internationalization and market commitment. The distance from France to Brazil is much larger than that of the remainder. Actually, located in two different continents, there is not same characteristics in the beauty product custom. Hence, Seabra said that France has historically been a source of knowledge and stark material for our products as well as a source of inspiration. around the way of sales, Natura discontinued using conventional model which is direct sales and changed to retai l store. It is an increase in size of investment in marketing and organization. In stead of a point of sales, in 2005 the company intentional a two storey flagship store where are apply for taste products, promotion events and is seen as displacement place of Naturas belief and vision (Natura case study). This is an evidence to show the companys market commitment is on upward. Another point is the change in Naturas product packaging and size. Making its products suitable for the master of ceremonies markets demand demonstrates effort to subscribe to the market share and internationalize.Moving to Mexican market, it has seen a more progressive step in the strategy of Natura. And it seems to have leapfrog stage here. In the year 2003 which is prior of two years compared to the time of entrant in France, Natura came backs to the nearer market with many equivalent characteristics of economy, demographics and passion for beauty products (Natura case study). In Mexico, the company developed the experience in France to a new model hybrid model. Building Naturas House, it can combine the strengths of both direct sales model and store chain. hither sales representatives can interchange experience, be trained professional skills, living in touch with brand and even receive sample. Also in this country, the company takes an initiative in new marketing tools. An example of this is magalogue. This combine between magazine and catalogue is applied to give Naturas products and special offerings, articles about health and beauty problem. So, in comparison with French market, Naturas investment in Mexico takes more attempt. Change from a store chain to Naturas House is an example. It requires both market-specific knowledge and general knowledge. And resources should be rented more expeditiously, especially adult male resource. All these elements explain that there is an upward trend of market commitment, internationalization when Natura enters Mexican market.Genera lly, Naturas internationalization strategy was successful in the period 1990s to 2005, but ineffective in the year 1980s.Task 3 using relevant theory, argue the case either for against Natura adopting a model (or models) of international market debut that differs from the direct sales/ distribution model sedulous.AnswerComing back to international cosmetics market since the year 1990s, Natura has gradually succeeded with some(prenominal) adjustment of market entry policies. Two specific evidences are Maison Natura in France and Casa Natura in Mexico. These models show that the level of geographic diversification, market commitment and internationalization (The Uppsala internationalization model) of Natura has increased as well as their international market entry method has changed in comparison with direct sales model ever -used. Moreover, in order to go international more dramatically, Natura should employ an appropriate market entry strategy. In my opinion, it can be class-con scious model with resident sales representatives in foreign target market. archetypally, it should be mentioned the direct sales model that Natura used to employ to provide products to its customers. The modern demand for the companys cosmetics are met through the force of 483000 active sales representatives in Brazil and 36000 agents abroad, who are well-trained and flexible consultants . And mostly orders from customers are placed via meshwork and telephones.However, with French market of which Paris has been known as a consecrate city of fashion and beauty products, to attract much attention from the public, Natura innovated its traditional way. The company decided to dissipate a two-storey flagship store which was called as Maison Natura in 2005. This store takes the duty of more than a point of sales, where can be seen to display Naturas belief and vision. Also here samples are given to customers or promotion events happen (Natura case study). There is an improvement in the way Natura enters to the market and persuades potential buyers. With this retail store, Natura has to spend more investment than its direct distribution. It is for the organization, marketing and even personnelFor example, the company had to build a store and make it become a place served for many purposes. It is so different from a call bosom which can only receive procure orders. Besides that, to adapt to this competitive environment, Natura modified its products packaging and size. It can not be denied these activities were able to help Natura get a foothold in France. And the reasons were that the company prepared carefully market specific knowledge and made market commitment. From that, Natura seems to be more suitable for an international market entry model which requires more responsibility and competence.And about Mexican market, it is fluent another(prenominal) increase in market commitment as well as internationalization. However, there is leapfrog stage herein. The di stance from Mexico to Brazil is smaller than that of France and the time of entering Mexican market is sooner two years (2003) but internationalization process goes up. Having some advantages of similar characteristics of economy, demographics, passion for cosmetics, Natural also faced the issue of late participation (Natura case study). Hence, in order to get success, it seemed to request the company to adjust a new strategy. The event given was that Natura House which has strengths of both pure direct sales model and retail store. There sales consultants can help each other with experience and it can be place for exhibitions, training speeches or product testing, offerings. Clearly, advantage of direct sales model which is the strong relationship between end user and sales representative, and those of retail chain which are beside relationship among sales consultants and multi-purpose place are combined. Not only the company invested in finance to establish this hybrid model at large towns and areas with many buildings, but also at Natura House, new marketing tools were diligent at the first time to remind the public about the companys brand (Natura case study). For example, the company tried issuing magalogue. By this way, Natura could put out both its product, special offerings and health, cosmetics articles as well. It can be considered that Naturas attempts of organizational and marketing change demonstrates their ambition to get a step into Mexican cosmetics market and occupy a certain market share. Also the approach was done professionally step by step. Importantly, it did differ from direct sales model Natura used to use.Far from these two markets, in the following years, the company wants to attack new potential large ones, such as the UK, the US, Russia and so on. Only in the United States, in 2004, the value of sales of cosmetics and toiletries in 2004 was 45.6 billions US$, made up 19.7% of total market share. Or In United terra firma and Rus sia, the numbers were 11.6 billions US$ (5%) and 6.4 billions US$ (2.8%) respectively (table 1 of Natura case study). However, with these countries, the main retail channel methods are not the same with Brazil. While in Brazil, sales through direct sales gained the remarkable proportion of 27.4% in 2004, in Western Europe, that percentage was only 4.7%. In these regions, the most common methods are different each others. ( Table 2 of Natura case study).From the factors which have already mentioned, in my opinion Natura should lean to apply a new international market entry Hierarchical mode. With current conditions, it can open resident sales representatives in the host country. Rather similar to models employed in France and Mexico, the company can build a place of many functions served for sales and marketing activities. These can be a showroom, an information centre for customers, after-sales service centre, a training centre for sales consultants, a place for sample receiving S ales and service segment should be located in the host countries because it will be easier to know thoroughly about local passion and demand in comparison with doing from distance. When being familiar with local market, Natura can open sales subsidiaries. At this business office method, the company can be take tax advantage but it must take more responsibilities and autonomy. Besides, research and development, mathematical product, marketing departments are passive situated in Brazil. It seems to be face a large amount of difficulties to change abroad assumed that other conditions do not change.Task 4 Naturas production facilities are located in Brazil. Assess whether this finding is rig in terms of strategy and logistics distribution given the companys portfolio of domestic, regional and international markets.AnswerSince the establishment in 1969, Natura has experienced different growth periods. First period from 1969 to1981, the company tried to build the brand and take exp ansion in domestic market. In 1982, Natura signed a contract with an independent distributor in Chile in order to expand abroad. However, this plan failed financially. Until the 1990s, once again Natura went internationally according to the open policy of the government and has got success step by step. Although Natura has changed their activities dramatically compared to the foundation time, production facilities has still situated in Brazil. One issue is given is that this decision is suitable for the development of Natura in following years?Firstly, with current situation, in my view placing all production facilities in Brazil is a reasonable decision. Brazil is the place where Natura was born. As a result, the companys products are manufactured usually have characteristics suitable for Brazilian demand. So along with the development of this brand, a stable market share in Brazil has been occupied. For any companies, they will track into foreign markets once gaining or becoming familiar with its home market. This will be a strong basis for the company to attack another. About Natura, its Brazilian market share in 2003 was 11.3%, positioned the second booster cable cosmetics and toiletries company in Brazil (Table 3 of Natura case study). Moreover, this country has a large advantage of material sources of production for the company. In recent years, Natura has focused their operation on the products using sustainable ingredients. And Brazils diversity is a profuse supply source. Fulfilling these natural materials for the production in the home country, clearly the company has bigger advantages over its competitors. They can save cost of pane, import tax and advantageous policies for domestic companies to use inside materials. Additionally, the traditional markets of this company are Argentina, Mexico, and so on. These countries are not far from Brazil and most of them are in the same area with many similar characteristics. So production facilities in Bra zil and using active sales representatives force to distribute the products to the customers in these nations may not create serious problems of transportation cost. Another reason to support for production facilities in Brazil is the effectiveness of the current operations. When a customer place an order, in 24 next hours finished product is made to be transported to the sales representatives home. It is due to the close cooperation among different department and automated system. Immediately after having a new order, the stock status is checked by the stock management system, and materials are collected to production facilities. Final steps are packaging and labeling. Total time for the whole process is no more than one day. After that, with 26 delivery partner, products are delivered to its representative within 2 days in Sao Paulo or no longer than 6 days for far destinations (Natura case study). It can be said that the operational process works actually efficiently to ensure de livery plan. This punctuality has supported placing production facilities in the stemma country of products.From these points, that Naturas beauty products are manufactured in Brazil is appropriate. However, this decision will continue to be agreed in the future when plan of making Natura brand become commonplace with global audience? First problem can occur when moving production abroad is the cost. Compared to most of other countries in the same South American area and Europe, sweat cost here is much cheaper. One of the reasons is that their population is the fifth leading in the world and still young or in labor ages (Wikipedia information). If Natura choose a country which labor price is high, finished products price will increase dramatically and the competitiveness will decrease. In addition, induce operating at a new location, there are two ways for material issue. The first reply is to find the new source. However, it is not simple to carry out because main ingredients f or the companys cosmetics are from the nature, especially from Brazils biodiversity. The second one is to transport materials from Brazil to the manufacture place. Maybe it is an impractical solution due to a large amount of disadvantages. It can be denied that transportation as well as import tax will make it go up. It also can result from import policy which procedures or regulations in the host country do not encourage to import such materials. Also Natura should take into account the origin country of products. It is not true that all customers evaluate equally with the same brand but different production places It is considered frequently that the customer have preference for the products from well-known nations for high technology and long term tradition of this kind of commodities. As a result, when deciding to choose a new manufacture location, the managers rent to investigate the customers desire. About distribution network, currently Natura still uses direct sales model t hrough active sales representative force. They are seen as Naturas consultant who are mainly well trained housewives and receive orders via sack up and calls (Natura case study). So the company does not have to pay direct employment cost but high commission for every product sold. With current conditions this retail channel still works efficiently. But if there is a change in production facilities, it is still good? pass away but not least, logistics issue can meet obstacles in the case of moving manufacture location abroad if that policy there is still close. It can come from various regulations about import export documents or the quality of transportation system is modern enough to support Naturaa activities or inventory, storage problems, packaging and so on. Nowadays to get high profits, in the main multinational companies invest in developing country, but they have to accommodate certain risks related to low quality of logistics. Hence, Natura ought to consider the abilit y of goods to move between nations.In conclusion, with current affecting factors, Natura seems to keep production mental quickness situate in Brazil. In the far future, along with long term strategy and improvement outside, a change maybe reasonable if they are supportive.