Detailed Elements of Business Report: Sephora Company Analysis

This report provides a comprehensive analysis of Sephora's business operations. It begins with background information, including company history, mission, vision, structure, industry, sector, and target market. The report then outlines Sephora's business objectives and how the company meets them. A SWOT analysis is conducted, identifying strengths, weaknesses, opportunities, and threats, with detailed explanations for each factor. The report further examines the challenges Sephora faces, including competitors like Unilever and The Body Shop, and explains the competitive dynamics. A PEST analysis is presented, covering political, economic, social, and technological factors, along with their impact on the business. The report also discusses Sephora's ethics, CSR initiatives, and business practices, providing examples. Finally, the report concludes with recommendations for the company's future strategies.

Running head: ELEMENTS OF BUSINESS
Elements of Business
Name of the Student
Name of the University
Author Note

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Table of Contents
1. Background Information..............................................................................................................3
1.1 Company History...................................................................................................................3
1.2 Company Mission & Vision..................................................................................................3
1.3 Set up structure......................................................................................................................3
1.4 Industry..................................................................................................................................4
1.5 Business Sector......................................................................................................................4
1.6 Target Market........................................................................................................................4
2. Business Objectives.....................................................................................................................4
2.1 List of business objective.......................................................................................................4
2.2 Cite examples on how company meets objectives................................................................5
3. SWOT Analysis...........................................................................................................................5
3.1: List of 2 factors.....................................................................................................................5
3.1.1: Strengths........................................................................................................................5
3.1.2: Weaknesses....................................................................................................................6
3.1.3: Opportunities.................................................................................................................6
3.1.4: Threats...........................................................................................................................6
3.2: Explanation for the factors...................................................................................................6
4. Challenges....................................................................................................................................7
4.1: 2 business competitors..........................................................................................................7

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4.2: Explanation for competing...................................................................................................7
4.3: 1 example for each component.............................................................................................8
5. PEST Analysis.............................................................................................................................8
5.1: 2 factors................................................................................................................................8
5.1.1: Political..........................................................................................................................8
5.1.2: Economic.......................................................................................................................8
5.1.3: Social.............................................................................................................................9
5.1.4: Technological................................................................................................................9
5.2: Explanation for components.................................................................................................9
5.3: Impact on business..............................................................................................................10
6. Ethics, CSR & Business Practices.............................................................................................10
6.1: Comments...........................................................................................................................10
6.2: 1 example for each..............................................................................................................10
7. Recommendations......................................................................................................................10
Reference List................................................................................................................................12

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Board of Directors
CEO
R&D Soft
operations
Hard
operations
Finance
department
Retail services
1. Background Information
1.1 Company History
Sephora is a prestigious retail brand that operates on a global manner and is known for its
beauty products. The company is owned by LVMH Moët Hennessy Louis Vuitton, which is the
leading luxury goods exporter in the world. The reputation of the company is that it uses its
expertise and innovation in most of the products that are manufactured by them. The company
was founded in 1970 by Dominique Mandonnaud with a wide range of products so that it could
be sold to the customers (Barbas, 2015).
1.2 Company Mission & Vision
The vision of the company is to become the most professional and knowledgeable team
of consultants within the beauty industry in the recent world.
The mission statement of the company is that they want to become the leaders in the
world with respect to cosmetics and perfumes (Rincon & Attas, 2017).
1.3 Set up structure

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1.4 Industry
The company falls under the cosmetics industry, as it deals with perfumes and beauty
products for both the genders.
1.5 Business Sector
The business of the company is divided in to three parts where the primary sector works
in collecting the raw materials, the secondary sector that is present under the company
manufactures the products and the tertiary sector helps in selling the products in the market so
that it can help in generating profits (Jeanpert & Pache, 2016).
1.6 Target Market
The company mainly targets the female customers and a small section of products are
dedicated towards the men. The company mainly targets the women who are of the age group
18-55 years. The products have been divided in to various age groups such as the target group of
20-30 years will be using the products that can appeal to the opposite gender. The other section
that is from 31-55 years will use the products that will help them in toning and shaping their
skin. The products are suitable to most of the skin types and the advertisements of the firm also
include women from different cultural backgrounds (Cordon et al., 2016).
2. Business Objectives
2.1 List of business objective
The company maintains a high rate of profit in the consumer market due to the best
quality products that it supplies in the market. The rate of productivity among the employees is
also high, as use of modern technology within the organization is highly encouraged, which

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makes it easy for manufacturing the products. The company also provides excellent customer
service so that it can help in providing better products as per the needs and preferences of the
customers. The marketing tactics have to be maintained so that it can help in distributing the
products in a proper manner within the consumers, which will help in increasing the sales of the
company. This can be done by building better partnerships with the distribution channels so that
it can help in circulating the products in an effective manner (Mihailovic, Vescovi & Pontiggia,
2017).
2.2 Cite examples on how company meets objectives
The company uses the best quality products so that it can help them in gaining a
competitive advantage in the market. The use of the modern technologies helps the firm in
manufacturing the products in an effective manner so that the cost of production can be minimal
and the income for the company can be high. The company makes sure that it collects feedbacks
from the customers regarding the product so that it can be developed in a better manner as well.
The company has a good marketing team that helps in selecting the right channels of
distribution so that it can help the products to be available in the market. The company mostly
uses advertisements for creating awareness among the customers so that it can help the
customers get better information regarding the products.

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3. SWOT Analysis
3.1: List of 2 factors
3.1.1: Strengths
The company has a number of stores in the Singaporean market and uses the techniques
of branding in a better manner.
3.1.2: Weaknesses
The company is not present in most of the emerging economies and the recalling process
of the brand is very low.
3.1.3: Opportunities
The company needs to use the opportunity of entering in to emerging countries and the
customers are willing to pay a higher price for a better quality of product.
3.1.4: Threats
The price of raw materials is high due to a higher rate of inflation and most of the
customers are selective in choosing the cosmetic products.
3.2: Explanation for the factors
The company has more than 750 stores in more than 17 countries and has a wide range of
products so that it can cater to the different needs and preferences of the customers. The
company also uses good techniques of branding so that it can market its products in an effective
manner within the operating countries (Zentes, Morschett & Schramm-Klein, 2017).
The company still has to establish its brand in the emerging countries so that it can tap
the resources that are present in those markets. This will help the company in increasing its profit

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margins to a great extent. Another weakness is that the brand recall among the company is very
low, which is practiced by most of the rival companies.
The entry in to the emerging economies will help the company in understanding the
environment that is present there so that it can help them in analyzing the opportunities that are
present in those markets. The consumers are also ready to pay a higher price provided the
products are of a higher value, which needs to be capitalized by the company (Cordon et al.,
2016).
The rate of inflation on the raw materials is very high, which makes it difficult for the
company to maintain a lower cost in the market. Another threat is that most of the customers are
very selective when it comes to choosing beauty products, which will make the company in
providing better services and products so that it can help in attracting the customers.
4. Challenges
4.1: 2 business competitors
The company has two major competitors that hamper its operation in the markets, which
are as follows:
- Unilever
- Body Shop
4.2: Explanation for competing
Competition is an integral part in the free economy that exists within the modern world.
The act of competition helps in producing better quality of products so that it can gain a
competitive advantage over the rival firms that are present within the market. Competitive

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environment present within the market helps in maintaining level of parity with the pricing
policy so that none of the companies can take an advantage of operating in a monopolistic
manner within the market (Moody, 2015).
4.3: 1 example for each component
Unilever has been one of the dominant companies in the market, as it offers the products
at a reasonable price to the customers and the quality of the product is also not hampered. The
company has positioned itself as one of the strong competitors in the Singaporean market due to
its wide range of products, which results in choosing varieties of products for the customers. The
company adheres to the policy of not testing the cosmetic products on animals, as it has shown a
concern on the degrading nature of the environment that is happening in the recent times (Rincon
& Attas, 2017).
Body Shop on the other hand does not test the products on the animals and the products
are mostly vegetarian. The company has also gone in to a partnership with the ‘Humane
Cosmetics Standard Against Animal Testing Policy’ so that they can ensure that none of the
animals are harmed during the manufacturing process of the products (Mase & Cedrola, 2017).
5. PEST Analysis
5.1: 2 factors
5.1.1: Political
There is stability in politics in Singapore and the restriction of trade is lower within the
economy.

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5.1.2: Economic
The economy is very stable in Singapore and the market is competitive in nature
5.1.3: Social
The emergence of new market is seen in the country and the demand is growing
regarding the cosmetic products
5.1.4: Technological
Cost of development has increased and the technological advancements has helped in
making the products in an easy way.
5.2: Explanation for components
The political condition in Singapore is very stable, which has helped the company in
carrying on with its operations in a better manner. The marketing of the products can be done
easily within the country, as the restriction of carrying out trading activities is relatively low in
the market (Gupta, 2014).
The economy of the country is good, which helps in providing more purchasing power in
the hands of the customers so that they can purchase the products at a higher price as well. The
Singaporean market is competitive in nature, as it has other beauty products brand that is
available as well.
There is an emergence of new markets in the economy, which needs to be capitalized by
the company so that the demand of the products can grow in these new markets as well.

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The use of advanced technologies by the company has helped them in maintaining a
lower production cost so that the product can be available in the market at a cheaper price
(Badrinarayanan & Becerra, 2017).
5.3: Impact on business
The company operates in the Singaporean market, which does not have any trade
restrictions within the country. The development of the new market provides a higher potential
for the company in selling its products so that it can gain a competitive advantage over the firms
that are present in the market.
6. Ethics, CSR & Business Practices
6.1: Comments
The company maintains its ethics and its practices by providing consultations and
makeovers to the loyal customers at free of cost so that they can thank the customers for trusting
the brand. This can be set up by approaching the consultants who have mastered the art of
makeup for the company so that the new products can be tried by the customers (Vasquez &
Escamilla, 2014).
6.2: 1 example for each
The customers are awarded with loyalty points so that they can redeem it whenever they
feel like for some of the products. The company also supports breast cancer awareness by
offering ‘Pretty Pink Products’ such as eye shadows and mirrors from where the cash that us
generated is donated for the research development of breast cancer.

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7. Recommendations
Thus it can be recommended that the company needs to provide the products to its target
market in an efficient manner so that it can help in increasing its number of customers. The
provision of giving free makeover to the customers will help the company in showing the
capability of their products so that more number of customers can trust the products in a better
manner.

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Reference List
Badrinarayanan, V., & Becerra, E. (2017). The Influence of Branded Stores Within a Store: An
Abstract. In Marketing at the Confluence between Entertainment and Analytics (pp. 953-
954). Springer, Cham. https://link.springer.com/chapter/10.1007/978-3-319-47331-4_189
Barbas, M. P. B. S. C. (2015). The world of Sephora: managing strategies as a retailer and
private.
Cordon, C., Vilarino, T. F., Caballero, P., Companies, H., & Use, C. (2016). Strategy is Digital.
New York: Springer. https://link.springer.com/book/10.1007/978-3-319-31132-6
Gupta, S. (2014). Louis Vuitton Moët Hennessy (LVMH): Strategic Approach of Fashion Retail
Brand in Overcoming the Impact of Recession. BS Publications, 279.
https://www.researchgate.net/profile/Vandana_Narang/publication/285753971_Co-
Design_initiatives_Linking_crafts_and_fashion_for_sustainable_practices/links/
566308ce08ae192bbf8eebe0.pdf#page=291
Jeanpert, S., & Paché, G. (2016). Successful multi-channel strategy: mixing marketing and
logistical issues. Journal of Business Strategy, 37(2), 12-19.
http://www.emeraldinsight.com/doi/abs/10.1108/JBS-05-2015-0053
Masè, S., & Cedrola, E. (2017). Louis Vuitton’s art-based strategy to communicate exclusivity
and prestige. In Fashion Branding and Communication (pp. 155-184). Palgrave Pivot,
New York. https://link.springer.com/chapter/10.1057/978-1-137-52343-3_6

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Mihailovic, T., Vescovi, T., & Pontiggia, A. (2017). The Beauty Ideal in Chinese Luxury
Cosmetics: Adaptation Strategies of Western Companies.
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3000358
Moody, C. J. (2015). Investigating how customer insights inform strategy leading to brand
differentiation in the retail sector. http://eprints.qut.edu.au/87509/
Rincon, M., & Attas, K. (2017). Phygitalization and its effect on customer satisfaction and
loyalty-The case of Sephora. http://lup.lub.lu.se/luur/download?
func=downloadFile&recordOId=8919366&fileOId=8919369
Thornton, C. E. (2016). COLLAB CULTURE: A Study on Influencer Marketing within the
Fashion Industry.
https://static1.squarespace.com/static/57fc4f24197aea4a8e854465/t/
582b6ecd46c3c44fc1e420c2/1479241421891/InfluencerMarketing_working.pdf
Vásquez, G. A. N., & Escamilla, E. M. (2014). Best practice in the use of social networks
marketing strategy as in SMEs. Procedia-Social and Behavioral Sciences, 148, 533-542.
https://www.sciencedirect.com/science/article/pii/S1877042814039809
Zentes, J., Morschett, D., & Schramm-Klein, H. (2017). In-store Marketing. In Strategic Retail
Management (pp. 327-350). Springer Gabler, Wiesbaden.
https://link.springer.com/chapter/10.1007/978-3-658-10183-1_15

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