Research On Business Strategies Of Cosmetics

Cosmetic has became a necessity as a result of raising standard of living. It hasbecame one of the industry with the fastest growth rate and has maintained at a highgrowth rate over the years. Other than United States, Japan and Brazil, Chinacosmetic industry is currently the4th biggest cosmetic market with strategic businessmodel being the main factor for the success in competitiveness. Well establishedbrands worldwide have been attracted and participated in the competition owing to thehigh profitability and huge market potential offered by the China market, whichfurther compress the competitive ability of local brand. However, following thechange in mindset of local, focus has been gradually turned toward the promotion oflocal brand, thus it is critical for local entrepreneurs to find an appropriate businessstrategy to tap on the business opportunity created. Shanghai Consumer ChemicalGroup, being the leading local brand, has proven that it is possible to survive in theface of keen competitions by foreign giant enterprises possessing large resources andfinancial supports, but also able to penetrate and compete in the France’s market withits own products.This article uses PEST analysis model, Poter five strength analysis model,SWOT analysis method and financial data analysis to examine and analyses the localcosmetic enterprises business strategy, seeking Shanghai Consumer Chemical Groupas a successful example. This article commence by presenting the basic theory onbusiness model and strategy; follow by an introduction and application of PESTanalysis model, Poter five strength analysis model, SWOT analysis method, Higginssustainable growth model, and financial data analysis method as basic tools. Thisarticle will also examine the current status and problems confronted by localenterprises, including the compression by well establish international brand, lack inawareness in brand, wrong or inappropriate business strategy, poor products quality, financial constraint and support. The main causes contributed to the above problemscould be due to the following factors：lack of appropriate define market, lack of abilityin management, insufficient research and technical knowledge investment, lack ofproper financial management. This article shall present the internal and externalenvironment which Shanghai Consumer Chemical Group operate, These environmentinclude macro environment, namely political, economical, society and technicalenvironment; the five competitiveness factors, namely existing competitions betweenenterprises, threat of potential penetrating of enterprises, alternate and replaceableproducts, ability to bargain by suppliers and customers in term of prices and quantitysupplied or sold. Internal environment include a brief history of the development ofcorporation, current business model, SWOT analysis on the opportunity and threat onthe corporation, strength and weakness of the corporation. This article will alsoanalyze the effectiveness of Shanghai Consumer Chemical Group’s business strategyand model, including the branding, sales, research and development strategy. Ananalysis on the financial management in term of debts repayment ability, operationsupports, profitability, liquidity analysis, and growth potential. The article throughthe success implementation of Shanghai Consumer Chemical Group, try to providesome solutions to local enterprises in their revolution of business operation andstrategy,which include the selection of branding, sales strategy, research anddevelopment strategy, financial planning and management policy.This article try to merge theory on business strategy with financial data analysisusing Shanghai Consumer Chemical Group as a successful example. It hope toprovide some pointers for local enterprises as guidance in order to formulate a suitablebusiness model to enable enterprises to compete and growth stronger in the highlycompetitive market.