Extensive SWOT Analysis of Estée Lauder – An American Cosmetics Brand

Products of Estée Lauder

Estée Lauder has become one of the best skincare brands and sells a variety of high-quality products such as

• Skincare
• Makeup
• Fragrance
• Haircare

What’s new with Estée Lauder

Check out some current news about Estée Lauder:

• Estée Lauder aims to revamp its brand image in the United States by embracing the TikTok trend and staying agile in responding to the latest beauty trends. They also plan to continue focusing on their retail partnerships with Ulta Beauty, Target, and Sephora-Kohl’s ventures, as these partnerships have proven successful, especially for mass beauty product sales during the summer season.
• Estée Lauder is acquiring Tom Ford in a $2.8 billion deal that will also see Zegna produce the brand’s fashion and accessories.

Buyer Persona

Following is a buyer persona that will help you understand the potential customers of Estée Lauder:

Since we have now got to know a lot about the company, let’s get into the much-awaited SWOT analysis of Estée Lauder. 

SWOT Analysis of Estée Lauder

SWOT analysis is known as analyzing the strengths, weaknesses, opportunities, and threats of a company. It helps to understand the competitive position of the company and guides you to conduct strategic planning accordingly. You can understand the internal and external factors of the company through this particular method. 

It is created to give someone a realistic image of a company. It also gives a  data-driven and very fact-based look at the company. 

To better understand the SWOT analysis of Estée Lauder, refer to the infographic below:

Now first let’s begin with the strengths of the company from the SWOT analysis of Estée Lauder.

Strengths of Estée Lauder

The strengths of a company are what make it different from the rest and give it an upper hand. It is what helps the brand gain success. Given below are the strengths of Estée Lauder:

• The Oldest: Estée Lauder is one of the brands which is the oldest in the cosmetics industry. The legacy of 75+ years helps Estée Lauder to develop trust among its customers and potential customers.   
• Range of Options: Committed to creating a highly personalised beauty and cosmetic experience, they have a range of makeup, fragrance, haircare, beauty and skincare products to cater to the various needs of their customers.
• Mergers & Acquisitions: The brand is always ahead of its competitors in terms of acquisitions including an investment in the Toronto-based MAC Cosmetics in 1994 and acquisition of it in 1998, the acquisition of Smashbox Beauty Cosmetics, Inc in 2010 and so on has given the brand power to increase its foothold in the market.
• Great Social Media Management: On different social media platforms, this brand has a very strong online presence and thus has been able to reach many individuals worldwide and attract people with its campaigns and social media management. 

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• Strong Geographical Presence: Estée Lauder has a very good geographical presence and is sold in almost 150 countries all over the world. This shows that the brand provides easy accessibility and has a wide target market.
• Diversified Workforce: Estée Lauder has always believed in having a diverse and very inclusive workforce that enables the employees to create innovative products and understand consumers and their constantly changing needs.

Weaknesses of Estée Lauder

The factors that prevent a company from working at its true potential are the specific areas in which the company could do better. Some of the weaknesses from the SWOT Analysis of Estée Lauder are: 

• International Presence: The brand record of Estée Lauder isn’t as high as the other popular brands. Yet to project itself as a global player, especially in emerging economies like India, China and Russia.
• Quite Expensive: Estée Lauder comes under the premium segment and thus its products’ prices are quite on a higher side as compared to other brands in the market offering the same products at a little cheaper price. Due to this, people who want to buy a product from Estée Lauder are taking their feet back just because they are not willing to pay.
• Customer Experience Becoming Expensive: Estée Lauder is always trying to emphasise creating customer experience at the best possible and that’s good but sometimes over-focus on creating customer experience causes customers to take advantage of such experiences.
• Counterfeited Products: Nowadays has made it easier for design pirates to make fake products due to which fake products look more accurate and quicker than ever as detailed shots of the products are posted within a few minutes of launching them, so sometimes it is hard to trust them, due to which other brands also suffer somewhere. 
• Limited Product Category: Estée Lauder has stopped themselves with cosmetic products alone. They could have expanded their product lines to bath and shower-based products which could have generated more revenue than their competitors.

Opportunities for Estée Lauder

The opportunities are also known as the favorable external factors and are the areas where a company can take advantage of and become better amongst its competitors. Following are opportunities from the SWOT Analysis of Estée Lauder:

• Good Market Knowledge: Since Estée Lauder has been in the industry for so long and has been one of the leading brands, it has great market knowledge which it can use to understand the ever-changing consumer tastes and needs and act accordingly to gain success in the market. 
• Men’s Segment: Estée Lauder is a brand meant for women, and with the fastest-growing men’s care segment there are great opportunities and a lot more to explore with skincare products for men as it will open a new market for Estée Lauder.
• Growing Demand: The market for hair care and personal care products is expanding, and it has significant demographic and geographic potential. The market potential is always increasing as more people use hair care products daily and there is so much competition in the hair care industry, people are well aware of its importance.
• Exposure of New Markets: Consumers always look forward to paying higher prices for greater value products and opportunities to penetrate the market. The opportunity to bring into emerging economies by engaging with their environment can help to raise Estée Lauder. Recently, Estée Lauder expanded its footprint with the New Jo Malone London store in Mumbai, India.
• Organic Products: There is an increasing demand for organic cosmetics. This demand is a favorable sign to Estée Lauder people who have employed organic R&D since the beginning.

Threats to Estée Lauder

These are what can cause harm to any organization and need to be dealt with smartly to avoid any problems for the company. The threats for Estée Lauder are:

• Expensive Testing Process: It is known to all that this company’s products are allergy-tested 100% fragrance-free. They do not use any animals for any kind of testing and encourage people not to. Thus it results in expensive testing processes for the company.
• Market Difficulty: Almost all players come under the beauty category and differentiation is very difficult. Customers are very anxious about the beauty category so attracting them needs more brand quality and services. 
• Competition from Other Brands: New skincare and cosmetics brands are also creating products with newer competitive innovation and technology for retail stores which is increasing the competition of Estée Lauder.

• Health Concern: The growing trends of organic and cruelty-free products poses a great danger if the products offered are not environmentally friendly. Estée Lauder should now focus more on expanding its reach to natural and organic products.
• Controversies & Lawsuits: Estée Lauder had many controversies including SOPA, Child Labour, Animal testing, Boycott and anti-boycott. Such controversies had significantly reduced the brand reputation of Estée Lauder in the market.
• Negative Publicity: It is showcased that most cosmetic brands show false advertising such as improvement in skin tone. A wide range of people say that these cosmetic products are against culture, cause ill effects on health and skin, and they aren’t natural.

Top 5 Competitors of Estée Lauder

Estée Lauder competes in the highly competitive beauty and skincare industry. Here are five of its top competitors:

• L’Oréal: L’Oréal is one of the world’s largest cosmetics and beauty companies, offering a wide range of products under various brands, including L’Oréal Paris, Maybelline, Lancôme, and more. It competes directly with Estée Lauder in the high-end beauty market.
• The Procter & Gamble Company (P&G): P&G owns several beauty and skincare brands, such as Olay, SK-II, and CoverGirl. P&G’s extensive portfolio makes it a formidable competitor in the beauty industry.
• Coty Inc.: Coty is another major player in the cosmetics industry, with brands like CoverGirl, Rimmel, and Clairol in its portfolio. It competes with Estée Lauder, particularly in the mass-market beauty segment.
• Revlon: Revlon is known for its cosmetics and beauty products, including makeup, skincare, and hair care. It competes with Estée Lauder in the mid-range beauty market.
• Shiseido: Shiseido is a Japanese multinational company offering a wide range of skincare and cosmetics products under brands like Shiseido, NARS, and bareMinerals. It competes with Estée Lauder in the high-end beauty and skincare segment.

This brings us to the end of the SWOT Analysis of Estée Lauder.

Before we conclude the study on the SWOT Analysis of Estée Lauder let’s see whether the brand faced any backlash from the users.

Estee Lauder’s Lack of Diversity

In January of 2018, Estee Lauder sent a very clear message to the world as to who their customers were, when they released their new line of foundation which was called the “Double Wear Nude Water Fresh Makeup SPF25.” The line, which had 30 shades, had maybe eight that could be used by people of color.

The backlash was swift, but an apology was never given.

This ends our extensive study on the SWOT analysis of Estée Lauder. Let us conclude our learning below.