Market Strategy and Internal and External Factors

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Table of Contents

Main forces in the societal environment
Fragmented vs. Consolidated Industry
Structure and Culture
References

Any business develops its market strategy depending on the forces that affect it. These forces may be both internal and external. While the former ones are at the full corporation’s responsibility, the latter cannot be controlled. Thus, businesses must study the external factors and address them with regard their internal strengths and weaknesses.

Main forces in the societal environment

Sociocultural forces

Nowadays women embrace more power, especially in the post-industrial countries. They no longer feel the need to focus solely on their looks to win men’s attention. While marriage is still considered to be one of the primary social lifts in some communities, most countries give various opportunities for female development and growth of their prosperity level. This situation has created the decline in the make-up usage by the significant portion of the female population among the globe. Clarins has recognized the audience’s demand for the natural beauty and is currently offering skin care products that help to attain the healthy look rather than cover imperfections.

Technological forces

As scientists work on discovering the new technologies, they consequently affect the global market. Regarding the cosmetics industry, the progress in this field allows addressing the needs of each customer. It is crucial since beauty products have to fit all kinds of appearance. Thus, companies try to improve their retail process by combining personalization and technology (Sluis, 2015, p. 36). Clarins is regularly upgrading its technologies for developing the best formulas that will suit every skin type.

Economic Forces

The current economic recession affects not only the number of acquired products but also the quality of them. Customers tend to choose the cheaper cosmetics, so brands have to review their pricing strategy in order not to lose them. Clarins is regularly offering discounts and free samples, which positively affects the company’s revenues.

Ecological Forces

The level of pollution in the world nowadays seems to be disturbing not only to scientists but also to ordinary people. Alternative energy sources, electric cars, recycling, and responsible household habits are just some of the topics that are receiving the increased attention of the public. The manufacturing processes must be sustainable to attract customers. Clarins ensures their raw materials are collected following the nature preservation guidelines, and the production does not leave any materials harmful for the environment.

Legal Forces

Governments around the world develop policies targeted at protecting the environment. For example, Great Britain is currently working on the legislation that would forbid cosmetics brands to put plastic details in their scrubs, as they finish their way in the ocean and cause fish to die when eaten (“UK will forbid face scrubs that kill fish,” 2016). All products of the Clarins corporation do not leave any poisonous substances after their usage.

Fragmented vs. Consolidated Industry

A consolidated industry is the one where the major players exist that affect the whole market of the corresponding field. As theory defines it, a consolidated industry “is dominated by a few large firms, each of which struggles to differentiate its products from the competition” (Wheelen, Hunger, Huffman, & Bamford, 2015). They may cause price fluctuations, supply and demand changes, or influence the trade strategies. For instance, the oil and gas field is dominated by several key corporations.

A fragmented industry, on the contrary, is not dominated by any companies. There is a relatively low entrance level, so new businesses are started every day. The good example of a fragmented industry will be various learning centers. A lot of them are opened all over the world, as this field mainly requires only instructors and classrooms. The price competition is rather high, and organizations struggle to differentiate themselves from others.

Clarins is an example of a brand that belongs to the consolidated industry. The production of cosmetics requires a lot of financing, human resources, and technology. There are several widely known corporations in the luxurious cosmetics sector, and Clarins is one of them. The brand itself represents the consolidated company. It does not use any side services, and its structure is vertical.

Structure and Culture

Internal processes are the ones responsible for defining the corporation’s values and structure. Unlike the external factors, this is a controllable field. Depending on how a company addresses its structure and culture, it may become the source of its strengths or weaknesses. The poor structure may have an adverse effect on the product, while some of the corporate culture’s elements can attract customers or lead to their loss.

Clarins has a very strong firm infrastructure. Firstly, the brand employs the network of scientists in botany and chemistry. Secondly, all products are thoroughly tested. It takes eighteen months for a formula to be developed, and it undergoes hundreds of tests before the release. Finally, Clarins carefully chooses its suppliers, controlling all steps from gathering to transportation and storage. These are the main strengths of the brand. However, there are also some weaknesses including the low market control in the foreign countries, as well as the high costs spent on sustainability programs. They can be improved by reviewing the expenses policies

An IFAS table may become helpful for bringing the order to the company’s structure and culture. It is a method for putting the internal strength and weaknesses in comparison to external factors. This information put into a form of a system may offer a visual connection that provides reasons and possibilities for improvement.

References

Clarins. (2016). From plant to product. Web.

Sluis, S. (2014). Best face forward. CRM Magazine, 18(6), 34-37.

UK will forbid face scrubs that kill fish. (2016). The Chemical Engineer, 904, 16. Web.

Wheelen, T. L., Hunger, J D., Huffman, A. N., & Bamford, C. E. (2015). Concepts strategic management and business policy: Globalization, innovation, and sustainability (14^th ed.) Upper Saddle River, NJ: Pearson.

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