A Study Of The Impact Of Estee Lauder’s Successive Mergers And Acquisitions On Corporate Sustainability

Mergers and acquisitions are the key strategy for enterprise development,and in the cosmetics industry,mergers and acquisitions are the means for enterprises to directly obtain brands.In 2021,the scale of China’s cosmetics market exceeded 370 billion yuan,becoming the world’s second largest cosmetics consumer country,while the total sales of local cosmetics companies accounted for only 13.6% of the domestic market share,and the high-end market was dominated by the world’s top brands,and the companies with the top market share did not have local brands.Since its establishment in 1946,Estée Lauder Group has continuously acquired nearly 30 brands,with a market value of131.7 billion yuan in 2021,firmly establishing the Group’s leading position in the global cosmetics industry,and its experience in continuous mergers and acquisitions is worthy of our in-depth study and learning reference.This paper focuses on the impact of continuous mergers and acquisitions in the makeup industry on corporate sustainability.It mainly adopts the combination of literature research method,case analysis method and qualitative quantitative analysis method to sort out the relationship between continuous mergers and acquisitions,corporate sustainable development,and continuous mergers and acquisitions and corporate sustainable development,construct a theoretical framework for continuous mergers and acquisitions to affect the sustainable development of enterprises,and evaluate the sustainable development of enterprises from both static and dynamic aspects.Through case studies,the impact of Estée Lauder’s consecutive mergers and acquisitions on corporate sustainability is analyzed.The development and growth of Estée Lauder is the result of a series of mergers and acquisitions,and the Group’s continuous mergers and acquisitions are mainly for the following purposes:(1)In order to seize market share,the Group has increased its market share and strengthened its global leadership position through continuous mergers and acquisitions.(2)When profit growth is blocked,the Group acquires new profit growth points through continuous mergers and acquisitions of enterprises in other product categories that are different from the original brand positioning.(3)In order to reorganize the business,the Group enriched the Group’s category matrix through successive mergers and acquisitions.The effect of continuous mergers and acquisitions,from the perspective of the expansion and integration of resources and capabilities,is found that the group’s continuous mergers and acquisitions produce synergistic effects,achieve brand performance growth,enterprise scale expansion and market expansion.Finally,the event analysis method,financial indicator method and principal component analysis method were used to evaluate the impact of continuous mergers and acquisitions on the sustainable development of Estée Lauder from both static and dynamic perspectives.The results showed that Estée Lauder’s continuous mergers and acquisitions had a negative impact on the sustainable development of the company in the short term and a positive impact on the sustainable development of the group in the long run.The case study found that:(1)Excessively frequent mergers and acquisitions will put pressure on the short-term development of enterprises.(2)Flexible payment methods can help incentivize the improvement of the operating performance of M&A enterprises.(3)The infiltration and expansion of the market will help to improve the current development dilemma of enterprises.(4)The integration and synergy of resources and capabilities after mergers and acquisitions can effectively enhance the development ability of enterprises.The development time of the domestic cosmetics industry is relatively short,most of the brands focus on the development of single products,and there is insufficient experience in brand cultivation,channel price control and market penetration in the process of mergers and acquisitions,and the risk of mergers and acquisitions is larger.Drawing on the continuous M&A experience of Estée Lauder Group,it is recommended that China’s cosmetics companies:(1)rationally choose M&A goals and pay attention to the accumulation of brands.(2)Choose flexible payment methods to avoid the risk of corporate mergers and acquisitions.(3)Perceive the development trend of the industry and try to lay out a multi-brand matrix.(4)Pay attention to post-merger integration and rationally allocate enterprise resources.It is hoped that this study will provide a case reference for the sustainable development of local cosmetic brands in China,with a view to producing cosmetic brands with internationally renowned influence in China as soon as possible.