Business Development Report: Rose Cosmetics Herbal Cosmetic Brand

This report offers a comprehensive business analysis of Rose Cosmetics, a herbal cosmetic brand. It begins with an executive summary and an introduction to the company, highlighting the growing demand for herbal cosmetics and the benefits they offer consumers. The report includes a PESTLE analysis, examining the political, economic, social, technological, legal, and environmental factors influencing the business. It then applies Porter's Five Forces model to assess the competitive landscape, including the bargaining power of suppliers and buyers, the threat of new entrants and substitutes, and the rivalry among existing competitors. A competitor analysis is provided, comparing Rose Cosmetics to its rivals. The report also details the company's marketing strategy, including market segmentation, target market identification, and pricing strategies. Finally, it outlines the operations plan, covering raw materials, equipment, labor, labeling, packaging, and distribution, along with legal considerations and supplier information. This report provides a complete overview of Rose Cosmetics, its market, and its business strategies.

Enterprise business
development

Executive summary
This report has discussed about the herbal cosmetic brand whose name is rose cosmetics.
Needs of the customer is evaluated for this product. Pestle and porters five forces are also done.
Segmentation and target strategies are discussed along with pricing strategy. In the end operation
plan is made.
Table of Contents

INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
CONCLUSION................................................................................................................................3
REFERENCES................................................................................................................................1
Business detail
Rose cosmetics is a herbal cosmetic company which make cosmetics products. The demand for
herbal cosmetics are growing in the worldwide. It is considered as a gift by the nature. The
herbal formula which is used while making the cosmetic products attracts huge customer base. It
does not use synthetic drugs so have minimum or no side effects. It has become the needs of the
customer because customer realized that they are using cosmetic products daily, so they are
preferring herbal products over any chemical based products. Products which are manufactured
by Rose cosmetics are herbal face wash, herbal shampoo, herbal soap, herbal body lotion, herbal
make up etc. these are the basic products which is required by every customer so here Rose
cosmetics fulfil the needs of every customer. Market for herbal cosmetics will surely grow in the
future (Perera, 2017). Many companies are doing expansion in herbal products. The reason why
it will grow is the natural ingredients used in it which give no side effects and now customer
prefer eco friendly products.
Economic overview
PESTLE analysis is a framework use by the company to analyse macro environmental factors.
PESTLE
Political factors:
Illustration 1: PESTLE analysis
Source: Cook, 2018

Company have to follow strict guidelines of the government as it is the cosmetic company and it
directly has contact with skin. Under product safety act government regulate such companies.
Company have to mention the complete list of ingredients on their products. Cosmetic company
is also influence by Brexit. There is high taxation on beauty products. Company even import
natural ingredient form other countries. Import have to do by following all political and legal
requirements. Import should be done by considering government norms.
Economical factors:
Cosmetic companies are also influenced by the economic recessions. Rose cosmetics faced the
customer behaviour. In recession times customer purchase only those products which are very
necessary. Necessary products like soaps and shampoos done good sale. This industry also has
given employment. Pricing of the products also depend on the locations because spending power
of consumer is different in different region. Consumer prefer rose brand more because it is
dealing in herbal products. Herbal products are natural products and help to get rid of all
problems naturally.
Social factors:
Company give the society what they need which creates the brand loyalty. This need has ignored
by many cosmetic brands but rose cosmetics saw that there is the market for herbal brand
because now consumers are more skin conscious and avoid using harsh chemicals (Diaz Ruiz,
and Kjellberg, 2020). Earlier people were only using beauty products when they were going to
attend functions and now on daily basis beauty products are being used. Increased popularity for
herbal products. Now customer focus much on the ingredients list.
Technological factors:
technology plays a vital role in company. Company now selling their herbal beauty products
online as well. Online shopping is the demand of customer. Customer will get the complete
range of products when the do shopping online. Online shopping give competition to the
company because customer compare two or more company's products then make a purchase.
Through digital platforms company can connect with consumers easily. Technology also help
company in fulfilling the modern requirements.
Legal factors:
Cosmetic company have do take approval regarding their ingredients from the government
regulated body. Legal laws have to follow by all the cosmetic companies. Rose cosmetics does

not do testing on animals. Company have to take ingredient by following the products safety
acts. UK's government has made safety standards so that consumers can be protected. Labelling
are also regulated by government under that company have to mention complete list of
ingredients, expiry date, precautions etc.
Environmental factors:
Rose cosmetics are using eco friendly packaging. Recycling materials are used by the company.
Company is facing issue regarding plastic usage, although company is using less plastic. Some
ingredients which are there in the shampoo or deodorants can affect the environment. Rose
cosmetics are making eco friendly products which has made the good public image. Ethical
practices are followed by the company. Corporate social responsibility can create strong brand
image.
Porter's Five Force Model for Rose Cosmetic's
There are five steps in the formation of Porter's Five Force Model which are as follows -
Bargaining Power of Suppliers – In this stage, when the input elements provided by the
supplier constitute a large proportion of the total cost of the product to the buyer, the potential
bargaining power of the supplier is greatly increased. The Rose Cosmetics has certain
characteristics which increases the cost of conversion for the buyers (Mbazira, 2019). The
supplier facilitates forward integration The additional cost is applied to the product produced so
that the marketing of the product is done successfully and the customer buys the product.
Bargaining Power of Buyers – Buyers influence the profitability of the company which by
lowering the prices and producing high quality products. Because the total numbers of buyers are
small for the Rose Cosmetics which only produces Herbal products. The purchaser only
purchases the product of this cosmetic line which is reasonable for them providing them quality
in lower prices and is economically feasible.
Threats of New Entrants – There is always a threat of new entrant which becomes competitor
of this cosmetic company. As it becomes easier for other cosmetic lines to produces more
artificial products, the rose cosmetics only produces herbal products which makes it easier for
the entry of other companies becoming threat to rose cosmetics. Barriers of threat for the
company are conversion cost, technical obstacles, sales channels, different laws and policies.
Threat of Substitutes – There is always a threat of substitutes as the rose cosmetics brand is
only concerned in producing herbal products which makes its segmentation into medicated

manner. But since this company is not much diversified into making different other types of
product thus the threat of substitutes increases it chances of vanishing from the market.
Rivalry Among Existing Competitors – This brand creates the rivalry factor among other firms
as it is not the only brand which sells the herbal products but other brand which are there in the
market place create a competitive platform in the cosmetics line producing its product (Lewis,
2017). Thus, rivalry among other firms increases the chances of making new and better products
for the buyers.
Competitor analysis
Competitive environment:
Unlike other business herbal cosmetic businesses also have to face a lot of competition. High
level of competition is given by the chemical based cosmetics company. They are using cheap
price of chemicals which is making their products also cheap. The products of rose cosmetics are
herbal and all herbal ingredients are not cheap so the price of the product of rose cosmetics are
generally high then their competitors. Also, consumers are using these chemical based products
from ages so all of them are not ready to buy herbal products some of them are even scared of
using it.
Strengths and weakness of the competitor business:
Strengths: the competitors of rose cosmetics have many stores, and they are established
company. They also have product category. They have the efficiency to adopt the latest
technology. There stores are designed properly which attract large customer base. They have
loyal customers. Consumers are familiar with the products and know how to use it.
Weaknesses: the biggest weakness of the competitors are rose cosmetics are using herbal
ingredients while making their products. Where herbal products have no side effects but
chemical based products have lot of side effects. People are now more aware regarding their skin
and hair, so they are ready to pay more for the herbal products over chemical based products.

Marketing strategy
Market segmentation: market segmentation is the approach in which the company divides its
customers based on age, income, behaviour etc.
Geographic segmentation: in these customers are divided based on their geographic locations.
According to the geography needs and preferences of the customer differ. Rose cosmetics use
make products according the climate.
Demographic segmentation: under this market is divided on the basis of age, religion, gender,
income, race etc. company make products by considering the age of the customer and also the
gender.
Behavioural segmentation: under this market is divided on the basis of customer behaviour
which can be lifestyle or purchase behaviour. Behaviour pattern is different or younger buyers.
Psychographic segmentation: under this market is divided on the basis of psychological aspects
of the consumers.
Demographic segmentation will be targeted by rose cosmetics because their products range from
high costs to low costs products. They take of all the income groups. Manufacture products for
male as well as for female. Make products for young to old to mid age customers.
Target market: target market of rose cosmetics is mainly young generation because they are
aware of the herbal products and what benefits they can give them.
Illustration 2: Market share in beauty industry
Source:Wilhemsson, 2019

Targeting strategies are:
Multi segment targeting: under this company serve more than one segment. Company develop
different brands for each segment. It generates high profits and sales.
Concentrated targeting: under this company only target a particular segment. Company
understand the needs of the customer and design the products accordingly.
Customized marketing: under this company make different products for the unique customers.
Those customers also have good purchasing power.
For rose cosmetics concentrated targeting strategy has chosen. It is chosen because it will be
more beneficial for the company to focus on one segment rather than focusing on two or more
segments. It will increase profits and avoid wastage of resources.
Pricing strategy
Skimming pricing: it is the pricing strategy in which the company launches the products with
the high price and then gradually low the price also for attracting large customer groups. Rose
cosmetics is using this pricing strategy because herbal products are new in the market so
company have limited competition in the herbal range. Company use this pricing strategy to
maximize their profits and increasing sales (AlJazzazen, 2019). Skimming pricing strategy is
effective for the business. In this strategy company aim to generate profit in the short period.
This strategy help the company to recover the costs before the rival company enters the markets.
Operations plan
Rose cosmetics make products by using:
Raw materials It include herbal things, base, colours,
preservatives etc.
Equipments Company is using machines for making
products and also using machine to fill product
into their packets.
Labour Skilled labours are working the company.
Before working company give training to the
employees.
Label and designs Company use attractive designs and colours to
attract customers.

Packaging material Company use eco friendly packaging material
which can dispose easily.
Distribution of products: company have strong distribution channels because they believe that
all the hard work will convert into profit only if the company have good distribution channel.
Rose cosmetics even sell their products online with easy payment options.
External details: the stores of the company has opened on that place where there are public
gardens so that when the parents of the children bring them for playing then they can see the
stores. This will help the company in increasing customers by doing free publicity.
Legal considerations: company have to apply for licence for opening the venture. Company can
also face restrictions while using some drugs. Regarding imports also company can face legal
constraints.
Suppliers: rose cosmetics suppliers are mostly outside from the country. Those countries are
their suppliers where natural ingredients are easily available and available at low costs. Company
also purchase raw material from their country, if it is available in less price. Within the country
only they have supplier for the packaging materials.
Illustration 3: World consumption of cosmetics by type
source: Cosmetic Chemicals, 2019

Financial Requirements are missing.
 provide a detailed breakdown of the financial requirements for your business. This should
include the following:
a . The start-up costs of the business to include costs such as any equipment; furniture; premises
costs (including any building works); opening stock, etc.a . Your estimated cost of sales & Your expected selling pricea . Fixed & Running Costs of the Businessa . Profitability & Break-Even-Point analysis
Begin with a forecast of the projected sales and costs of the business. Information from your
market analysis and competitor analysis will help you here. If you are writing a plan for a
business that is already up and running you can also use historic data, or where this is not
available try to use information from other, similar businesses.
Financial plan
Start up expense Amount (£)
Materials 300
legal 1300
Insurance 200
others 300
total 2100
Start up assets Amount (£)
Cash 23000
inventory 10000
Current assets 5000

Lomg term assets 75000
Total assets 113000
Total requirements 95000
findings Amount (£)
Account payable 1000
Current liability 7000
Long term liability 50000
Total liabilities 58000
Cash flow and budget
Particular Amount (£)
Human resources 200
Research expenses 150
marketing 300
Operation requirements 300
Other expenses 100
total 1050
particular Amount (£)
Raw material 500
rent 800
cash 1000
machinery 1900
others 200

total 4400
Cash flow forecasting for 12 months (Amount in £)
Particular Quarter 1 Quarter 2 Quarter 3 Quarter 4
Opening balance 20000 50000 81000 100000
Cash sales 15000 18000 21000 26000
receivables 14000 17000 20000 22000
Sales of assets 15000 0 0 0
Total cash
received
64000 85000 122000 148000
Cash expenses
Direct labour 1500 1700 1500 1300
Direct material 1600 1700 1800 1900
Selling and
distribution o/h
4000 3800 3500 3600
Manufacturing
o/h
2800 2900 2500 2600
Assets purchased 15000 0 0 0
Total cash
expenses
24900 10100 9300 9400
Net cash flow 39100 74900 112700 138600

REFERENCES
Books and journals
Perera, R., 2017. The PESTLE analysis. Nerdynaut.
Diaz Ruiz, C.A. and Kjellberg, H., 2020. Feral segmentation: How cultural intermediaries
perform market segmentation in the wild. Marketing Theory, p.1470593120920330.
AlJazzazen, S.A., 2019. New Product Pricing Strategy: Skimming Vs. Penetration.
In Proceedings of FIKUSZ Symposium for Young Researchers (pp. 1-9). Óbuda
University Keleti Károly Faculty of Economics.
Mbazira, A., 2019. Evaluating the Pharmaceutical industry in Uganda using porters' five forces
model (Doctoral dissertation).
Lewis, R., 2017. Porter's Five Forces of competitive advantage.
Online
Wilhemsson, S., 2019. The Beauty Stock Ideas You Should Consider.[Online]. Available
through: <https://seekingalpha.com/article/4244461-beauty-stock-ideas-you-should-
consider>
Cosmetic Chemicals, 2019.[Online]. Available
through:<https://ihsmarkit.com/products/chemical-cosmetic-scup.html>
Cook, M., 2018. Strategic PESTLE business analysis.[Online]. Available
through:<https://generic.wordpress.soton.ac.uk/neighbourhood/2018/04/28/strategic-
pestle-business-analysis/>
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