Princessa Beauty Products Case Solution And Analysis, HBR Case Study Solution & Analysis of Harvard Case Studies

Princessa Beauty Products Case Solution

Introduction

The Princess a Beauty Products was founded in the year 1984 and is the major retailer of the beauty products in Montreal. The Company has its most of the customers from the Black Community. The Company has a series of products ranging from hair and skin care to the cosmetics and electrical items. The company is also issuing its Beauty Magazines in the Montreal for the Black Community.

The Cosmetics industry has witnessed the great competition in the year 2007. A-plus and Beauty Palace are two major competitors of the Princess a. However, the company is more stable and well organized than its competitors. The sales of the company declined from the 605,249 in the year 2006 to 509,249 in the year 2007.The massive decline in the sales is due to the increasing competition from the Supermarkets and retailers. However the sales have been observed at a growing trend from 2002 to 2006, suddenly it plugged down in 2007.

Critical Issues

The Princess a Beauty Products is facing continuous declines in the sales. However, it didn't have control over its cost of goods sold. The Company is facing issues regarding the shortage of financial resources. The company also have very few and less trained staff that reflects a lack of the human resources.

Company Objective

The objective or Goal of the company is very simple to increase the sales and expand its business. However, George Richards has set an initial target to increase its annual sales by 5 percent by the introduction of any effective marketing strategy.

Porter's Five Forces

Threat of New Entrants

The threat of new entrants is relatively high as there is low entry barrier for the new comers to enter the market. The Company is facing the high competition due to no barriers to entry.

Bargaining Power of Suppliers

The Suppliers had increased the products cost by 15 percent that defines the company has to pay a high cost to the suppliers in order to stay in the business. The Shortage of the raw materials has been on the rise, and the cost of the transportation is also increasing.

Bargaining Power of Buyers

The Buyers have very low loyalty attached to the products as the price, and features of all the beauty products are relatively same. However the buyers choose to buy the beauty products from the stores by looking for the ease of location and with no switching costs attached, it reflects low loyalty of the Buyers to the Princessa Beauty Products.

Threat of Substitutes

The global recession reflects the Customers are more price sensitive that always encourage the need of the substitute. However, there is no substitute for the cosmetics items.

Competitive Rivalry

As mentioned earlier in the case, the main competitors of Princessa are Beauty Palace and A-Plus. The Princessa has the advantage of its layout and organized store that attracts maximum customers and retain the loyalty of the customers. However, the A-Plus is located at the critical locations that help A-Plus to increase its sales and attract new customers..........................

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