BEAUTY SALON GROWTH- Harvard Case Solution & Analysis

Beauty Salon Growth Case Study Solution 

Introduction:

Beauty Salon is one of the fastest growing industries in the world currently. It offers the services and products to both males and females and to help them groom and look their best. Beauty Salon industry can be further categorized into following categories:

  • Skin Care
  • Hair Care
  • Nails
  • Feminine Cleaning
  • Oral Hygiene
  • Perfumes and Cosmetics

Currently, skin care has the largest market share globally. The growth of this industry in a country depends upon the population of that country and different techniques used by its beauty salons. Most of the sales in beauty salon industry are generated in the developed countries, but developing countries are also growing rapidly and weighs in an approximate of twenty five percent. Research shows that the small salons are contributing more to this industry as compared to the big ones. Top fifty biggest beauty salons are contributing only fifteen percent to the industry. (Market Entry - Beauty Salon Industry in Malaysia: Analysis of Growth, Trends and Progress (2015-2020), 2016)

Different researches by different brands in the world concluded that the beauty salon industry is least effected by the economic cycle of a country. Despite of the ups and downs, beauty salon industry has remained consistent, because it has become a necessity not only for women but men also. Apart from that because of the busy and tiring schedules, people are showing more interest in spa services and massages. (The beauty of the beauty industry, 2014)

Beauty Salon Industry in Malaysia:

Malaysia is located in the South-East of Asia, and has a monarchy government. Most of its investment is in mining and manufacturing industries. Because of its location, it is close to the main markets in Asia, and for companies investing here, they find it a cost-effective gateway. Secondly because the government of Malaysia favors its citizens, the foreign investment is less in this region.

The Malaysian beauty salon industry depends heavily on foreign employees. The current major salons in Malaysia are trying to get the locals understand the demand of this sector, and trying to have more local beauty professionals from Malaysia.

Recently, Malaysia held a beauty exhibition and invited professionals from all over the world to improve the local skills and boost this industry. Almost two hundred different companies from all over the world took part in this exhibition and a total sum of eight thousand and seven hundred professionals came to attend this exhibition.

In 2015, the growth in beauty salon industry was higher than that in 2016 i.e. four percent. The reason behind this downfall is because the living cost has increased and that has forced the people there to switch to less expensive beauty products or to go after discounts and other allowances. 2016 was dominated once again by multinational beauty brands in Malaysia, like Sunsilk, Maybelline, Unilever, Procter & Gamble and L’Oreal.

The forecast shows that the beauty salon industry in Malaysia will grow rather slowly, because the cost of living is expected to grow over the years as well and that would make the public cautious to spend on beauty products. (Beauty and Personal Care in Malaysia, 2017)

In 2015, the total trade done by Malaysia for beauty salon industry was about 2.24 billion dollars. The main exporters of Malaysia are USA, China, Japan and Thailand. Out of all the beauty related products, the biggest share was of the skin care products in 2015 and it was around 109 million dollars. In the past few years, its import from United States of America has grown by twenty five percent. The above statistics shows that the demand of beauty products is increasing in Malaysia. The main reason behind increase in demand is that the male population has also started showing interest in beauty salon services, and the female population is becoming more independent and because of their exposure to more beauty selling companies and different cosmetics products, the demand is increasing.

Malaysia has recently also started the development of halal beauty products. These products are gaining attention not only in Malaysia but in other Muslim countries as well. Because Malaysia itself is a Muslim Country and almost sixty percent of its population is Muslim, so the halal products are a good alternative to the beauty products offered by other multinational companies. (Asia Personal Care & Cosmetics Market Guide, 2016)

 

BEAUTY SALON GROWTH- Harvard Case Solution & Analysis

 

AMES Group:

AMES Group is currently one of the leaders in market in grooming industry. It is originally based in Singapore but has expanded its business in Malaysia as well. The annual sales of AMESGroup is above RM three hundred million per annum. Its goal is to offer their customers the best services they can and it tries not to compromise on any standards, just as its name suggest, achievement, efficiency and significance. Being in the market since 20 years, it has a total of two thousand employees and one hundred and thirty different branches operating as in 2017 in Malaysia and Singapore combined. The number of employees in Malaysia alone is about thousand.(AMES Group of Companies, 2017) AMES group is the parent company to seven following brands:

  • London Weight Management
  • Dorra Slimming
  • Yun Nam Hair Care
  • New York Skin Solutions
  • Shakura Pigmentation Beauty
  • Jonsson Protein Healthy Hair Growth
  • Victoria Face Lift.........................

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