Natura Case Study

Topics: Developing country, Cosmetics, Emerging markets Pages: 6 (1827 words) Published: November 12, 2011
International Marketing Management

Case Study by Andy Lalinde, Michal Berka & Claudia Baumgart

Case Study – Natura: Global Beauty Made in Brazil
1. The benefits and obstacles of globalization for Natura Globalization can be described as the process of the increasing worldwide interconnectedness in many areas such as economics, politics, culture, communication, environment, etc. The consolidation of the global relations occurs on the level of individuals, societies, institutions and countries. The digital revolution, the technical advance in general and especially in regard to communication- and transport technologies as well as the political decisions to promote liberalization of world trade can be mentioned as main drivers accelerating globalization. It is undeniable that it has become one of the principal characteristics of our modern age and determines nowadays society and businesses to a large extent. From the business perspective the phenomenon of globalization offers great expansion opportunities on the one hand, but on the other hand it also comes along with certain obstacles which are additional competitors and systemic risk for example. WTO agreements facilitated market entries for foreign companies and allowed them to gain significant market share outside of their home market which lead to rise of their overall profitability. Nonetheless, the vastly increasing amount of international competition has had a negative impact on many original local businesses and even resulted in their extrusion. Also crucial to mention is systemic risk which has gained overall importance in particular during the global financial crisis since risks nowadays transmit much further and faster, bouncing from one country or industry into several countries or sectors. Although the cosmetics industry is regarded as relatively crisis-proof, the cosmetics companies have to deal with the above mentioned challenges and need to develop optimal strategies with competitive advantages to participate in these global trends. There are certain drivers, particularly valid for the cosmetics industry that have to be taken into account and can be regarded as reasons why Natura and other cosmetics companies should not miss out on global investment:  Rising living standards and higher income in developing regions lead to increased spending, notably in cosmetic items: In developing countries consumers are more willing to spend large amounts on personal care and cosmetics. This is proven by exhibit 2 which shows that among the top 10 countries in terms of global per capita spending on cosmetics and toiletries are more developing nations than developed countries. 1

International Marketing Management

Case Study by Andy Lalinde, Michal Berka & Claudia Baumgart

 Increased international travel and mobility: Business as well as private travelers are seeking to buy their common beauty products abroad and are even disposed to pay a premium.  Increased media influence: The influence of media on potential customers has always been significant, but recent trends such as online shopping and consumer apps on the I-phone and I-pad have amplified the media´s impact. With a saturated home market, Natura generally does not have any other option but to expand and globally take advantage of the favorable developments of the tremendously fast growing cosmetics and toiletries market. The small market share of 0.4% in Latin America and their current foreign market observation also leave room for improvement and expansion. Furthermore the device to connect universal values with Brazilian characteristics has proven to be successful before. The Brazilian flip flop brand Havaianas has become a global market leader within its segment. In addition, Natura possesses several competitive advantages so as to keep up with its international competitors. As examples can be mentioned their Akno Natura and bikini waxing product which reached outstanding success in France....
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