Business Model and Plan for Herbal Cosmetics in Australian Market

This report discusses the business model and plan for Herbal Cosmetics in the Australian market. It includes industry and market analysis, product and economic feasibility analysis, and a business canvas model.

Business model and plan

Executive summary
This report has discussed about Herbal cosmetics which is new product and will launch in
Australian market. This report has evaluated its industry and market analysis and also discussed
about canvas model by using elements like customer segments, key partners, key resources, cost
structure etc.

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................4
MAIN BODY..................................................................................................................................4
Company overview......................................................................................................................4
Analysis of product features........................................................................................................5
Industry analysis..........................................................................................................................6
Market feasibility-.......................................................................................................................7
Product and economical Feasibility analysis...............................................................................8
Business canvas model................................................................................................................8
Conclusion.....................................................................................................................................10
REFERENCES..............................................................................................................................11

INTRODUCTION
A business model is the detailed idea about the ways an organisation is planning to conduct
its business by offering certain products and services along with targeting certain customer base
within a specific market. Business models helps in determining the product base of the company
and the different ways to sell it (Barlow, and et.al., 2021). Herbal cosmetics is a new and
innovative business that is headquartered in the Melbourne Australia. The company specialises
in cosmetics products that are produced from organic and herbal ingredients. This report deals
with the business model plan for herbal cosmetics along with industrial and market analysis for
the company.
MAIN BODY
Company overview
Herbal cosmetics is a business venture that works in the industry of consumer goods and
specialises in the products of services of personal care. The organisation is aimed to focus on
producing products that are created using different cosmetic ingredients to develop the base that
includes complete herbal materials. Such products helps in providing many benefits to its user as
it does not contain any chemicals that can harm the skin by some side effects. Skin diseases are
very common towards in the growing age group. These skin diseases are mainly due to exposure
towards the chemical agents and some amount of toxins present in such products. Herbal
cosmetics eliminates chances of having such issues as the products does not contain any
chemicals (Ferreras-Garcia, Hernández-Lara, and Serradell-López, 2019). Moreover, the
products range from the company includes cleansing agents, toners, moisturisers and many more.
The material used to produce these products are aloevera, carrots, neem, turmeric and also rose
water. These beauty products helps its users to look beautiful and charming. The demand for
such herbal products is increasing within the market as it is good activity with less or nil side
effects. Herbs and spices are beneficial in maintaining as well as enhancing the beauty of human
body. Benefits of herbs includes enhancement of the physical as well as mental well- being,
detoxification and so on.

Analysis of product features
Segmentation, targeting and positioning is a three step model used for the marketing purpose and
is important in serving the market in a successful way. This framework helps in identifying the
attractive segments which are to be targeted before forming appropriate positioning strategies.
This model is used to determine the market nature and the diversity within the needs of its
customers.
Market segmentation: It is the process of dividing the market in different categories
depending on the buyers based on their separate needs. Herbal cosmetics has divided the market
in different segments depending on their age, gender and produced a market segmentation
strategy. The products of the company are segmented within the population of Australia as they
are ranged between being low price while being made from the natural sources within this
market. It is focused to women as they are looking for more natural ways within their skin care
routine and part of their beauty culture. The products from herbal cosmetics are catered to
women and will later expand for the men department as well. In addition to this, regarding the
income segmentation, the company is focused towards the quickly rising middle class along with
the upper class that are gaining in affluence (Romppanen,, 2021). By segmenting the market age-
wise, the products are for younger middle class as they have showed increase rate of interest
while capturing within the market share of the younger ladies. Some individuals are more
conservative and very conscious regarding what they put on their skin, herbal cosmetics is the
best options for individuals with such psychographic nature. Herbal cosmetics has followed a
differentiated marketing approach that will allow its users to have effective identification of
various segments and providing them with several offers that will produce stronger sales.
Targeting: In order to target the desired market, the company must identify the
attractiveness of the market segments and select the best for its customers. Herbal cosmetics is
working well in identifying their cultures and varieties of customers coming from diverse
regions. The target audience for herbal cosmetics are the young and affluent middle class women
that are under- going problems with dry or oily skin tone and greying of their hairs while having
some efforts to target on masses. Moreover, company also targets towards the sought benefits
that comes from the usage of herbal products. Even the millennials that are interested in
cosmetics and fashion trends are target audience of herbal cosmetics. It includes the working

ladies, females going to colleges and providing them with high quality products within
affordable price range.
Positioning: Herbal cosmetics have used many different marketing techniques to
promote their products and services. The company has used many famous bloggers and
celebrities coming from various background to advertise the skin care product. Marketing
programs and campaigns were successful n adding more effects on the advertisements and along
with this it is has hosted different programs that are related to hair dressers. It offers wide range
of products available for every type of skin texture. The distribution of the products is done on
the basis of its demands within the market and with the process that is cost effective. All these
steps has made the company to be strong with its long as well as short term goals and marketing
positioning while considering the mindset of the middle age women and teenage girls.
Industry analysis
Industry analysis is the technique which provides insight to the company about the other
companies who are manufacturing same products and services which they are doing. It is very
important to understand whole industry for the purpose of effective planning. Further it helps
company in understanding threats and opportunities in the market (Pervan, Curak and Pavic
Kramaric, 2018). With the help of porters five forces model, this will be explained. It has five
components which are as follows-
Threat of new entry:
It means the ease through which other company can enter in the market. Industries which are
highly competitive attract many companies. If more company will enter in the industry then it
will reduce profits of other companies. Threat of new entrants is low because, entering herbal
cosmetic industry is not easy because it requires high investment. Manufacturing unique
products requires many resources.
Bargaining power of customers:
Customer bargaining power is low because there are very few companies in the market which
produce good quality of herbal cosmetics. Although competition is increasing and other firms
have also started manufacturing herbal cosmetics but theyall are producing items of low quality.
So those customers which does not want to compromise on quality have low bargaining power.
Bargaining power of suppliers:

Suppliers power is low because there are lot of suppliers which is available in the market which
provide same raw materials in lower prices (Berisha Qehaja, Kutllovci and Shiroka Pula, 2017).
Threat of substitutes:
This factor is high because there are lot of substitutes which are available in the market. If
customer find herbal cosmetics expensive than they can shift to chemical based cosmetic
products which they are using since longer time.
Barriers to entry and exit:
These barriers are high because entering in cosmetics industry require lot of investment and exit
is also difficult for large firms because before leaving they has to achieve costs of production.
Market feasibility-
This means overall assessment of the market in terms of quantitative and qualitative analysis.
This analysis covers the value and volume of the market. Using pest and swot analysis, this will
be explained (Omer, 2018).
Swot-
Strength: the biggest strength of herbal cosmetics is that they manufacture natural products
which is free from harmful chemicals and this is enough to attract customers towards the
company. They are having strong research and development team which helps them in coming
up with innovative products.
Weaknesses: company is having limited suppliers and they are highly dependent on them which
sometimes even causes delay in manufacturing.
Opportunities: technology is the biggest opportunity for the company which herbal cosmetics can
be used in order to launch new and innovative products in the market.
Threats: competitors are the biggest threat, although they are having less competition but many
companies are entering in this business by viewing interest of consumers.
Pest-
Political factors: it consist of factors like tax rate, inflation rate etc. policies which is made by the
government are in the favour of herbal cosmetics because they supply natural products (Zhao,
Liu and Xue, 2019).
Economic factors: beauty and cosmetics company highly contribute in the economic
development of the country. As these products are majorly purchased by middle and high class
income group of customers.

Social factors: it refers to the factors which are related to belief, value, lifestyle etc. consumers
are highly demanding cosmetic which is natural and safe.
Technological factors: advanced technology is helping company in increasing their market share
by producing innovative products and then launching them in the market.
Product and economical Feasibility analysis
Product feasibility helps in providing predictive analysis that helps in marketing within
sales and product development of the company. The products from herbal cosmetics are made
for the skin care purpose and from very natural ingredients. This product does produce
advantages as t is environmental friendly and solve the problems of young and middle aged
women. The use of natural substances has helped in filling the gap within the market as almost
all the skin care and related products are made from high chemicals (Student, M.C.A). This is a
good time to introduce such product as the target audience has become more conscious about
what they apply on their skin and the side effects associated with it and hence, they are looking
to invest in something that is less harmful and more natural. According to the economic
feasibility, herbal cosmetics is an innovative small business that will required some funds from
other sources such as loans from banks. The business can run well within the Australian market
as planned.
Business canvas model
This is the model which shows that how the organisation produce, delivers and take the value in
the market.
Key partners
 Publishing
houses which
print beauty
and fashion
related
magazines.
 Supply
companies
which gives
Key activities
 Creating
value based
products.
 Fulfilling
customers
demand
 Provide
them best
customer
Value
proposition
 Herbal
cosmetics
provide
good
quality of
products
to the
customer
Customer
relationships
 Providing
personal
customer
service
 Consider
feedbacks
which they
receive by
Customer
segments
 Company
will target
women of
age
between
16-50
because
they

raw materials
(Sort and
Nielsen,
2018).
 Social media
platforms
service. s on
which
they can
trust.
the
customers
on various
portals
highly use
cosmetics.
 Also they
will target
high
income
class
customers
who can
afford
their
products.
Key resources
 Well trained
and highly
skilled staff
 website
Channels
 they have
offline
stores
where they
sell
products
 they also
sell online
through
company’s
website.
Cost structure
 they have high skilled staff which is costly for the
company and to maintain their website is also
expensive
Revenue streams
 service revenue, as company
consult with beauty experts.
 Subscription application.
Ethical issues can address by the company
Health and safety at the organisation-
Every employee has the right to get safe and hygienic workplace (Keane, Cormican and
Sheahan, 2018). This is the duty of herbal cosmetics to provide them safe working place so that
employee can happily work their.company should provide full protection to their employees and
also should have provide safety equipment if necessary.
Social media rants:
This is another ethicalissues which is faced by lot of companies nowadays. As the social media is
evolving and its users are also increasing. So now employees have become active and sometimes

add posts which hurt the reputation of company. But if employee is also complaining for the
work then it cannot be punishable but if it is reducing business value then they are punishable.
Conclusion
Through this report it can be concluded that profitable venture which is launched in
Australia is the Herbal cosmetics. The behind launching this is because the demand of customers
and their preferences which has shift from chemical-based products to herbal and natural
cosmetics. This report has discussed about the industry, market, product and economic feasibility
of the company in detail. It has also evaluated business model canvas for the same company. The
company will normally target women of age between 16-50 years. Within this age group
customers uses cosmetics more.

REFERENCES
Books and Journals
Barlow, and et.al., 2021. Business plan.
Berisha Qehaja, A., Kutllovci, E. and Shiroka Pula, J., 2017. Strategic management tools and
techniques usage: a qualitative review. Acta Universitatis Agriculturae et
SilviculturaeMendelianaeBrunensis. 65(2).
Ferreras-Garcia, R., Hernández-Lara, A.B. and Serradell-López, E., 2019. Entrepreneurial
competences in a higher education business plan course. Education+ Training.
Keane, S.F., Cormican, K.T. and Sheahan, J.N., 2018. Comparing how entrepreneurs and
managers represent the elements of the business model canvas. Journal of Business
Venturing Insights. 9. pp.65-74.
Omer, S.K., 2018. SWOT ANALYSIS; THE TOOL OF ORGANIZATIONS STABILITY
(KFC) AS A CASE STUDY. Journal of Process Management. New
Technologies. 6(4).
Pervan, M., Curak, M. and Pavic Kramaric, T., 2018. The influence of industry characteristics
and dynamic capabilities on firms’ profitability. International Journal of Financial
Studies. 6(1). p.4.
Romppanen, J.M., 2021. Segmentation, Targeting & Positioning (STP).
Sort, J.C. and Nielsen, C., 2018. Using the business model canvas to improve investment
processes. Journal of Research in Marketing and Entrepreneurship.
Student, M.C.A., Customer Segmentation Analysis.
Zhao, J., Liu, H. and Xue, W., 2019. PEST Embedded SWOT Analysis on China's E-Commerce
Industry Development Strategy. Journal of Electronic Commerce in Organizations
(JECO). 17(2). pp.55-68.