Beauty Library Salon, Malaysia Case Solution 

The expenditure rate on cosmetic products is increasing from last few years to be 40%. The Malaysian residents tend to be more reliant on the top brand’s name to get the desired treatment and comfort.The manufacturers and retailers are more confined to price discounts and promotional activities in order to attract the large volume of sales. During 2016 the international brands are more concerned with the provision of beauty care and treatment to the residents of Malaysia. They tried to maintain the market share in Malaysia because of its strong brand reputation nationally and internationally.

There are more than 60000 different type of cosmetic products that are available in Malaysia which means the cosmetic market is strong in Malaysia and gives a tough competition to Beauty Library Salon. The cosmetic industry has to offer some kind of discount to its customers to gain the competitive market share. The residents of Malaysia are more concerned with the discount offered with premium products. The advertisement and promotion through magazines and media can help the firm to grow the profit and to attract the large volume of customers (Hassali, 2015).In 2015 the total trade volume of Malaysia cosmetic industry was about $2.24 billion.

SWOT Analysis:

The SWOT analysis is mandatory for an industry to analyze to enhance the competitiveness and gain the higher market share.

  • Strengths: The beauty library salon is notable in serving excellent services to its customers and helps the customers to have a satisfying The salon also focused on building knowledge regarding the different types of treatment to not to dissatisfy the customers. They offered a large range of products and services to its customers. They also tried to extend the opening hours to serve its customers.
  • Weaknesses: The weakness of beauty library salon is the inflexibility of staff working hours.
  • Opportunities: The opportunities of beauty library salon include the strong growth of the market and potential to adapt the advanced technologies that will help the business to boost its revenue and profit. The adaption of attractive packages is also included in the opportunities of the salon.
  • Threats: The threats for beauty library salon includes new salons entrance in the growing market and the high cost that business is suffering and find it as a threat because high costs act as an obstacle in revenue generation process for the business. The discounts offered by the competitors of beauty library salon can also be a threat for the business because customers will more likely prefer the discounts on premium products and will more likely rely on the competitor’s product that will result in declining sales and eventually the profitability of the business. Innovative packaging is also a threat through which the business can suffer loss and declining sales.

Porters Five Forces Model:

The porters five forces model comprises five factors that the management must take a look in order to find the competition and the competitiveness of an industry. The identification of bargaining power of supplier, bargaining power of buyers, theintensity of rivalry, threats of substitutes and threat of new entry will help the industry to decrease the threats and increase the competitiveness.

  • Bargaining Power of Buyers:The identification of bargaining power of buyers helps the industry to analyze the future demand for its products and services. The bargaining power of buyers of beauty library salon is weak because people are more likely to stick with the facilities provided by beauty library salon because they offer free treatment services to its customers as well. They also focused on providing the suggestions regarding health and diet food so that customers are getting benefits from expertise and trainers. The beauty library salon can achieve long-term profitability in the future.

While the cosmetic industry has thehigh bargaining power of customers, because there are various known and successful local and international brands are available in theMalaysian cosmetic industry.

  • Bargaining Power of Suppliers:The high bargaining power of suppliers will tend the industry to face some difficulties. The beauty library salon imports products from Paris and from other countries too. If the supplier finds new emerging market that has more potential and opportunities they will tend to offer their material to that country and market.

When demand for products and ingredients increases the suppliers are more likely to increase the prices of those products.The bargaining power of suppliers is high because there are various other competitors and alarge number of market players that can give more in return to the suppliers as compared to beauty library salon.

  • The threat of Substitutes: When there are similar products offered by the competitors in the market threat of substitutes increases. There is tough competition in products line that beauty library salon offers because of Procter and Gamble, Unilever and L’Oréal are strong competitors offering the similar beauty care products. Whereas the threats of substitutes are not arising when beauty library salon offers its high standard services to its customers because the beauty library salon offers various outclass after services that include both before treatment services and after treatment services………………..

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