Entrepreneurship and Business Development: ECO-Beauty Case Study

This report covers the case study of ECO-Beauty, an organic skin care product company, and its market entry strategies, micro and macro factors present in the business environment, financial feasibility, and competitive analysis.

ENTREPRENEURSHIP
AND BUSINESS
DEVELOPMENT

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
MAIN BODY...................................................................................................................................1
Introducing business idea and market entry strategies.........................................................1
Determining the micro and macro factors present in the business environment....................2
ECO Beauty............................................................................................................................6
Financial feasibility................................................................................................................7
Risk and Mitigation ...............................................................................................................9
CONCLUSION..............................................................................................................................10
REFERENCES..............................................................................................................................10

INTRODUCTION
Entrepreneurship can be defined as process of running a business or starting a new
company in order to make sustainable profit (Lim, 2021). In economic terms, it is related with
land, capital, labor and resources that help organization to run a business. The present report is
based on ECO- Beauty that deal with organic skin care product of great quality. Furthermore,
the study will cover information regarding market value and how firm is managing their risk.
MAIN BODY
Introducing business idea and market entry strategies.
Nowadays, people are more concern about their health and they are adopting healthy life
style such as using organic product (Welter and et.al., 2017). This motivated ECO- Beauty to
make quality skin care product for customer.
1. Product and services: The company will deal with quality skin and hair care product
that will be made up of natural product such as coffee and coconut oil. The organization
has decided to provide their service to young customer as they are very particular about
their skin care routine (Akpan, 2020). Furthermore, Eco- beauty has also decided to
deliver their services through online and physical store so to cover large area of market.
Along with that the packaging of the company will not include use of plastic firm
believes in Eco friendly business
2. Target market: The company will first focus on covering the local market of UK such
as by opening physical stores at best location that will result in attracting large customer.
Along with this firm has decided to use digital marketing to cover the large area and
expand the business globally (Drobyazko and et.al., 2019). The organization will also
invest in research and development that will help company in knowing the preference of
customer in market. Thus, company will try to expand the business by targeting on
young and upper and middle class income group (Camilleri, 2018).
3. Special attributes: Eco- beauty have some special attributes such as understanding their
customer by providing 24-hour consumer services. So that they can easily give their
respective feedback regarding the product and services thereby necessary changes can be
made for satisfaction of customers wants (Ratalewska, 2018). Therefore, strong
relationship with the clients and the brand image of firm will increase in the market. For
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understanding their customer preference company will analyze the data form their
official website that will allow organization to attract more customer and ultimately
increase the sales (MOSTAFA, YOUSSEF and Abdelrahman, 2020). Furthermore, Eco-
beauty will focus more on innovative ideas so to design unique product in the market
such as honey cream, onion oil and strawberry scrub which will not harm the skin of any
customer. Beside this organization will hire online chat section of dermatologist where
clients can ask about the product that will suit their skin. This idea will differentiate their
company from other. Thus, new ideas will increase the sales of firm and build brand
authority.
4. Values: The organization will aim to solve the problems of young customer, toxin free
product and provide standard quality services so that their consumer can care about their
skin every day. The firm will do this by following their core values such as safety the
company will make sure that their product will go through proper test and safety process
so that their client does not face any issues (Gaforzoda and et.al., 2021).Furthermore,
the organization will focus on to maintain honesty with their customer by providing the
transparency system. Moreover, the firm will focus on using maximum organic product
such plant based and hand made that will make Bio beauty unique (Grover and et.al.,
2018).
5. Location: The company will open 3 physical store in UK along with they are more focus
on opening at best cities such as London, Manchester city as they are prominent cities
that will contribute in increasing sales of firm.
Involvement: The company will presently operate with 200employees and will select 10
suppliers and 20 distributions so to cover the local market (Skala, 2019). The firm will only
collaborate with only organic product suppliers.
Determining the micro and macro factors present in the business environment
Porter five force analysis is a framework used to evaluate the competitive environment of
business. However, there are many factors that affect the entry of Eco-Beauty so this model is
used in context of industry analysis of present organization. Moreover, the outline includes
threat of substitute, bargaining power of customers well as suppliers, threat of new entry and
high competition (Dixit and et.al., 2019)
 High competition: There is large competition in the market that are delivering the same
product therefore Eco-product has to make unique competitive advantage by funding
2

more in research and development which will allow organization in making product
according to customer. Thus, result in increasing sales of firm (Grebenshchikova and
Yakushev, 2017).
 Bargaining power of customer: The client always has high bargaining power and to
reduce this the company will focus more on quality product hence, organization do not
have to lower their price.
 Bargaining power of supplier: They already have low bargaining power and Bio beauty
has maintained the good relation with them. Thus, they do not affect company growth.
 Threat of new entry: Beauty Industries face high barriers so to reduce this threat the
company will investment more in innovative ideas and technology.
 Substitute product: Cosmetic company have high threat of substitute product in market
so to reduce that the organization will sell their product at affordable and at great quality
(Bruijl, 2018).
The importance of Skin care is growing in market of UK as people are very conscious
about health. The forecast of skin care product has been raise by 8.8% in year 2020. In the past
year the youth demographics has purchased 65.3% of beauty and health related product. Along
with this skin care product will raise by 12.8% in coming five years which will help Eco- beauty
to enhance their profit and sales. The company will also get benefit of online shopping as it
going to increase by 37.2%in coming year which will help organization in covering global
market and expanding the business (United Kingdom (UK) Health and Beauty Market., 2021).
SWOT analysis
This tool is used to determine the micro environment factor that affect the overall
business environment (Pongwiritthon and Kamja, 2018). These are as mentioned below:
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Strength
 High profit margin products.
 Low risk as compared to other beauty
products (Islam, 2018).
 Company provides Eco-friendly
product.
Weakness
 Cost of investment is high at the time
of introducing the product.
 Limited flexibility in pricing.
 High inventory cost needed for organic
products.
Opportunities
 New stores can be open in nearby
areas.
 Business may expand globally.
 Company can charge different price
according to the country polices.
Threats
 Possibility of duplication of products.
 Popularity of organic beauty products
are less as compared to others.
 Changes in government rules and
regulation for organic products.
PESTLE Analysis
 Political Factor: This factor includes trade restriction, tax policy, bureaucracy and
government intervention. Globalization and less trade restriction has acts as opportunity
for growth and expansion of business in international market.
 Economical factor: Presently the UK market is facing recession so customer is now
buying expensive product. Therefore, the Bio beauty has decided to reduce the cost of
their product to attract large customer.
 Social factor: People are now more conscious about their health so their moving towards
organic product. So to cope up with this organization has decided to make product
according to preference demands.
 Technology factor: Technological factor such as digital marketing is very beneficial for
firm i.e. ECO Beauty has adopted social media marketing to expand their business. Thus,
enhancing the revenue of firm.
 Environmental Factor: The company is suing optimum utilization of resources so that
they can serve their customer quality of product at low price so to increase their brand
image and build strong customer relation.
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 Legal factor: All legal procedure has been abide by firm while starting and operating its
business for smooth functioning (Pan and et.al., 2019).
Segmentation, targeting and positioning1. Segmentation: Company has decided to segment people on basis of demographic,
psycho graphic, behavioral and geographic basis.2. Targeting: It has targeted youth people for new concept.3. Positioning: It has planned to position its brand image In heart and mind of customers
through offering qualitative products and services to customer for satisfaction of their
requirement
Business Canvas Model
This model identifies the value of the firm that can be rived according to the time.
Key partners
6. Suppliers
and
Distributo
rs.
Key activities
 Free demo
for
customer.
Value
propositions
 High
quality of
organic
cosmetics
products.
Customer
relationships
 To
provide
best
experienc
e to the
customers
Customer
segments
 Targeted
the
segmented
market
Key resources
4. Raw
materials,
Machines
&
equipment
5. Human
resources
for stores
and
Channels
 Online
5

production
unit.
Cost structure
 This involves both fixed and
variable cost in the
production process (Cardoso
and et.al., 2019).
Revenue streams
 Customer can pay higher prices for good quality
of product.
Marketing Mix
Product- ECO Beauty will introduce the organic cosmetics products such as make-up,
skincare and primer, Lip balm, Brushes and tool and Fragrances.
Place- Company will establish in UK, where it attracted the local people to sustain
goodwill. At the stores they will offer parking facility to the customer.
Price- Price skimming strategy will be used by organization to attract the customer with
high quality of products (Moşteanu and Roxana, 2020). This helps to enhance the customer base
and also raise the brand image of a company in positive manner.
Promotion- Social Media strategy will have used by cited firm to promote and sale their
products online where Facebook, Twitter can be used because more than 80% of the people uses
these sites to remain updated.
People- Organization will focus on all the people related to the firm which such as
employees, staff member, Manager, customer etc.
Physical evidence- Firm will be focusing on well-designed interior of the stores and
attractive branding and packaging of the product.
Process- Process of delivering product to the customer which increases the efficiency
and effectiveness of the product. Here, customers do not have to wait because there will be many
payment cabins that helps to minimize customer’s time.
Competitive analysis of ECO Beauty
Basis ECO Beauty Neel Yards Boots No7
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 Product  Organic
Product offers
by this
company are
make-up,
skincare and
primer,
Brushes and
tool and
Fragrances.
 Products offered by
Neel Yards are Lip
balm, mother and
baby collection
products, skincare
like anti-aging etc.
 Boots No7 also
offers various
products such as
Luminate triple
action serum,
foundations,
primers, eyebrow
pencils etc.
 Price  The firm will
use price
skimming
strategy.
 Price penetration
strategy followed
by this firm.
 This company is
used value based
pricing strategy.
 USP  The highest
quality.
 Lower prices  Attracts Customer
 Promoti
on
 Social media
promotional
strategies
followed by
ECO Beauty.
 Advertisement
through offering
coupons and create
pamphlets.
 Firm uses the
offline promotion
strategies like
hoarding on
airports, markets
etc.
Financial feasibility
7

Particulars Janua
ry
Febru
ary
Marc
h
April May June July Augu
st
Sept
emb
er
Octob
er
Nove
mber
De
ce
m
be
r
Cash
inflows
Opening
Cash inflow
10000 15000 20000 8000 25000 30000 70000 7500
0
800
00
90000 9500
0
50
00
0
Sales
Revenue
10000 15000 20000 25000 50000 30000 40000 2500
0
800
00
55000 2000
0
60
00
0
Other
income
3000 5000 2000 6000 5000 3000 9000 3500 450
0
2500 3000 60
00
Total cash
inflows
23000 35000 42000 38000 80000 63000 11,900
0
1035
00
164,
500
147,5
00
118,0
00
11
6,0
00
Cash
outflows
Material 2000 1500 8000 8500 3000 9000 10000 1200
0
150
00
19000 2200
0
27
00
0
Labor 4000 2000 4000 5000 8000 4000 7000 9000 400
0
2500 3000 60
00
Other
expenses
1500 2000 2500 3000 5000 7000 9000 4000 600
0
7500 5500 40
00
8

Administrat
ion
expenses
3000 4000 6000 8000 9000 7500 2500 1500 600
0
8500 6500 70
00
Total cash
outflows
10,500 9,500 20,500 24,500 25,000 27,500 28,500 26,50
0
31,0
00
37,50
0
37,00
0
44,
00
0
Cash
surplus/def
icit
12,500 25,500 21,500 13,500 55,000 35,500 (16,60
0)
77,00
0
133,
500
110,0
00
81,00
0
72,
00
0
Risk and Mitigation
Financial Constraints- When the company enter in market for first time there may be
attained the problem of the insufficient cash flow because there are very fewer investors who are
going to invest in the start-up (Salman and et.al., 2017). Beauty products are high in cost and it
required high investment cost. To overcome such risk cited firm will grant loan from various
financial institutions.
Language barriers- It has identified that language barrier will be one of the most
common problem that can be faced by business. As, people have their own perspective towards
beauty products so it can be difficult to communicate with them due to multi-linguistic. To
mitigate this problem, organization will recruit employees those are comfortable in various
languages and used to communicate with various accent.
Lack of Resources– The start-up can be faced the risk in terms of financial resources,
human resources, technology etc. Scarcity of resources also affect the supply of the product. The
problem of insufficient resources will be overcome by knowing about the availability of team,
avoid the unrealistic schedules (Blut, M., Teller and Floh 2018. ). Further, it can be mitigated by
identifying the problem and selecting the alternatives for that solution.
Cyber security- All the information related to business are stored in installed systems,
hackers will be going to take advantages of loopholes within the systems (Thabit and Raewf,
9

2018). In order to overcome this problem company, need to install some security and private
networks like VPN (virtual private networks).
CONCLUSION
From the above report it has been concluded that the ECO Beauty will provide the best
quality of organic beauty products. By competitive advantages it has been identified that there
can be very less competition for these types of products in UK. Moreover, the report discussed
on all the marketing strategies that can be followed by company. Beside this, the report
evaluated different activities by using value chain and businesses canvas model. Further, the
company study summarized the target segment through STP analysis tool and recognized risk
and mitigation strategies that can be followed by cited firm.
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Online
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