BMGN N480 Entrepreneurship& Small Business Management
Student Name; ID; Section:
Business idea description:
Cosmetic industry is an industry that maintains a steady growth as cosmetic items have become a necessity for women rather than a luxury. It is a multi-billion dollar industry worldwide and has seen a tremendous growth in the recent years. It is still a growing industry in the Middle East region as most of the items are imported rather than produced locally. Research indicates that UAE and the ME region spends large amounts on cosmetics and other beauty products with the UAE market predicted to be worth AED 520 million by the year 2014 (KT Business, 2011). The UAE market is mainly dominated by international brands such as Inglot, Chanel etc. and they face little or no competition from any brand produced locally. With UAE still being a growing market, an opportunity arises to compete in the cosmetic industry. A locally produced organic cosmetic brand would be ideal be to compete in the industry with the trend of usage of organic cosmetic products is on the constant rise worldwide as it has evolved into a AED 30 billion industry with a steady growth rate of 12 percent annually (Lowe, 2010). Organic cosmetics are cosmetic products that are made from natural ingredients. It is becoming popular due to its health and environmental benefits. The plan is to setup up production facilities as well as retail outlets as the plan is to market the brand as being 100% locally owned and produced. The SWOT analysis will further discuss the advantages of entering into the organic cosmetic market in the UAE.
| 1. Natural products: Unlike regular cosmetic products, the purpose of organic cosmetics is to be friendly to the skin and the environment. The ingredients of the cosmetic items will be extracted from plants, fruits, minerals etc. As the trend of usage of environmental friendly products is increasing, the demand for eco-friendly cosmetics is also increasing as indicated earlier that the organic cosmetic industry is growing at the rate of 12% every year [ (Lowe, 2010) ].2. Brand image: The brand will be advertised as a 100% locally produced and owned business. This will attract the local population as well as the expatriates as the business will be able to cater to the needs of its customers according to the environment of the UAE. The ingredients used and the products will be largely influenced by old traditions of the UAE. 3. Understanding of the UAE cosmetic market: The business would have a better idea about the market and the taste of the customers. The products would be designed to cater to those needs while providing a skin friendly and eco-friendly solution. The climate of the UAE is very hot and humid and the company has to provide its customers with products that can withstand those weather conditions.4. Market leader: The UAE cosmetic industry is mainly based on products that are imported. There are not much companies producing locally and especially not in the organic segment. Entering as a local brand that sells organic cosmetics, it would position it as a market leader.5. Own production facilities: The company would benefit from having its own production facilities based in the UAE as it would ensure that there is steady supply of products in the market and also save cost. Setting up production elsewhere is always prone to delays and that would have a negative impact on a newly started business.
| 1. Lack of experience: The cosmetic industry is very technical and hence experience is very necessary. The experience of the entrepreneur is limited to the knowledge gained from using cosmetic items. The company would have to rely on specialists in fields of skin care, organic products etc. to develop the products. Research has to be done about the suitable products for the UAE market before the brand is launched. 2. Establishing market: The organic product industry is...
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