Sodashi Skincare Brand: Market Analysis & Expansion Opportunities

This report provides a comprehensive market analysis of Sodashi, an Australian skincare brand, focusing on its national and international market presence. It utilizes a SWOT analysis to highlight the brand's strengths, weaknesses, opportunities, and threats, particularly in the context of expanding into new markets like Japan and Singapore. The analysis considers factors such as the brand's commitment to natural ingredients, limited brand recognition in Australia, and competition from established brands like L'Oreal. The report also examines the skincare industry in both Australia and globally, noting trends in consumer preferences and market growth. Furthermore, it delves into the PESTEL and Porter's Five Forces analyses for Japan and Singapore, offering recommendations for Sodashi to leverage its strengths and overcome challenges in these specific markets, ultimately aiming to establish a successful international presence.

Running head: SODASHI INTERNATIONAL MARKETING
Sodashi International Marketing
Name of the University:
Name of the Student:
Author’s Note:

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Executive summary:
The aim of the report is to analyze the business market of the Australian market based
skincare product Sodashi, both in the national and the international market sphere. The report
the market condition of the brand with the use of the SWOT analysis in order to bring out the
various strengths and weaknesses of the company and the multiple opportunities it has to
expand more. It further denotes to the market that the brand can acquire in the countries of
Japan and Singapore to show the expanding nature of the brand and its acceptability in the
international markets. The report clearly denotes the fact that Sodashi has the right potential
to expand its business in various other countries. It shows that Singapore is a ready market
for the brand to have wide scale market and profits in the business. It has multiple threats
because of the leading brands like L’Oreal and Mac that are widely preferred by people all
around. However, because of the inclination of people towards beauty and skin products, the
market situation is positive for the brand that can establish itself and be successful in the
various international markets.

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Contents
Introduction................................................................................................................................5
Discussion..................................................................................................................................5
Analyzing the Sodashi market:..................................................................................................5
Strengths.................................................................................................................................5
Weakness................................................................................................................................6
Analysis of Global and Australian Skin Care Industry..............................................................6
Domestic Analysis.....................................................................................................................6
International Analysis................................................................................................................7
Consumer Profile...................................................................................................................7
Profile Segment......................................................................................................................7
Analyzing market of the mentioned countries...........................................................................8
Japan.......................................................................................................................................8
PESTEL Analysis...................................................................................................................8
Porter’s Analysis....................................................................................................................9
Singapore..............................................................................................................................10
PESTEL Analysis.................................................................................................................10
Porter’s Analysis..................................................................................................................11
Recommendation......................................................................................................................11
Strengths...............................................................................................................................11
Country 1- Japan..................................................................................................................11

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Country 2- Singapore...........................................................................................................12
Weaknesses..........................................................................................................................12
Country 1- Japan..................................................................................................................12
Country 2- Singapore...........................................................................................................12
Threats..................................................................................................................................13
Country 1 Japan....................................................................................................................13
Country 2 Singapore............................................................................................................13
Opportunities........................................................................................................................13
Country 1 Japan....................................................................................................................13
Country 2 Singapore............................................................................................................13
Conclusion................................................................................................................................14
References................................................................................................................................15

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Introduction
Australia has a vast economy; however the markets are limited by a number of factors
like the sizes of the industries, location of them and others. Australia has a major number of
small businesses who are looking for opportunities to expand themselves internationally. One
of the most lucrative markets for expansion of Australian business is the Asia-Pacific, where
a huge growth economy wise has been taking place (Panayotou 2016). Different countries
offer varied opportunities for the growth of business and although it might sound like a great
strategy for expansion, it is slightly complicated. This is because the environment for
marketing and business is different for different regions owing to the vast differences in
political scenario, cultures, and technological advancements. This report is about the market
analysis for an Australian Skincare brand Sodashi.
Discussion
Analyzing the Sodashi market:
Sodashi is an Australia based skin-care company founded by skin care expert Megan
Larsen in the year 1999. The company manufactures luxury natural and organic skin products
which they supply to the biggest spas and salons in the world (Sodashi Skincare 2018).
Sodashi has its branches at about 25 different countries and the strengths and weaknesses of
the business are discussed below-
Strengths
 The products are made with unadulterated and pure natural ingredients which appeals
to a wide base of consumers (Sodashi Skincare 2018).

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 Continued innovation in products which help the consumers experience immediate
results (Sodashi Skincare 2018).
 Their commitment towards providing high quality products (Sodashi Skincare 2018).
 Explorable list of ingredients for the consumers to be able to know what their product
is made of.
 Production taking place in small batches to ensure originality and quality
 Usage of pure and high standard ingredients..
 Distribution of the products in the major high-end spas and salons across 25 different
countries (Sodashi Skincare 2018).
Weakness
 The company has a large channel where they distribute their products. However, there
are not many outlets in the capital cities for the Australian consumers
 Communities and businesses within Australia do not recognize the brand.
 Since the produce in batches, they have a limited capacity of production.
Analysis of Global and Australian Skin Care Industry
Domestic Analysis
In Australia one of the largest skin care brands is L’Oreal and has been holding a
share percentage of 12 in 2016 the company is renowned for both its mass and premium
brands (Loreal.com.au 2018). The premium brands include Georgio Armani, Lancôme,
Kiehl’s and other. The mass brands include Garnier and L’Oreal Paris (Loreal.com.au 2018).
However, nowadays the trends have been reversing and people are interested in smaller and
newer companies which offer trust worthy products and services. A 5 percent growth is
expected in the CAGR of the skin are industry in Australia by 2024 (Statista 2018).

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International Analysis
Skin care is a dynamic industry which welcomes numerous kinds of innovation. The
trends for usage of skin care products are different with respect to the different regions. For
instance the Asia Pacific countries have a high demand for skin lightening products, whereas
Europe as high demands for anti-aging and sun block lotions. There have been expectations
for a CAGR increase of 5.1 % in the skin care industry globally by the year or 2024 (Statista
2018). Variety of products ranging from body lotions, sun block, anti-ageing to lip balms,
colour corrector balms, a steady increase in business has been noticed. The largest markets in
the skin care industry include Asia Pacific, Middle East Asia, Europe, Latin America, North
America and Africa (Statista 2018).
Consumer Profile
Cosmetics and skin care are the area where the consumers are proactive as they know
their specifications needs and requirements about the kind of product that would suit their
skin or body type. Skin care and make products are part of daily routine and therefore this can
be categorized under the indulgent product category. There are a number of factors which
come into play when profiling the consumers for a certain industry. In case of skin care the
factors include, age, socio economic condition, geographical locations, cultural backgrounds,
environmental needs and many more (GlobalDataPlc 2018).
Profile Segment
The general target age group for beauty and skin care is 18- 35 where the population
is young and eager to look good. Anti-aging products target a different age group ranging
from 25- 55. However there are a lot of factors associated when a target consumer profile is
created for a certain product launch (GlobalDataPlc 2018). Socio economic conditions are
another major factor. Certain luxury products are launched for individuals with higher
disposable incomes and some of them are targeted to middle class individuals specifically.

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Sodashi as a skin care brand has its branches spread across twenty five different
countries. They have increased their business with care and innovation and keeping in mind a
certain profile of customers. They sell luxury skin care products made of natural ingredients
to high end salons and spas all across the world (Sodashi Skincare 2018). There is a high
demand for natural products but the consumer profile for this particular business is for people
with higher disposable income (Ribeiro et al. 2015). Initially it was restricted to females,
however the consumer profile has widened towards the other genders as well.
Analyzing market of the mentioned countries
Japan
PESTEL Analysis
One of the countries that need to be analysed as a market option for the Sodashi
business is Japan, therefore it is essential to have an overview about the political, economic,
social, and technological. Legal and Environmental factors of the country. From the political
perspective, Although Japan is a monarch state, he king has little to do when compared to the
responsibilities of the five political parties Japan has. Japan has a rocky relationship with its
neighbouring countries including Taiwan, South Korea, China and Russia because of the
disputes due to factors like natural gas, oils and offshore resources (Neely 2018). Japan can
be considered among the top five economies in the world. Children are taught from a very
young age, the importance of money and earning, the children are made to learn all the
professional norms forms their early childhood leading to such a growth in the economy of
the country. Japan follows a collectivist culture and people tend to live in groups and families
(BBC News 2018). The society is strictly patriarchal where the father is the head of the
family and women are expected to quit work after marriage. However, due to the need of
male children by most families, Japan has very low birth rate. Individuals however are free to

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practice any religion. (BBC News 2018). Technologically, Japan is one of the strongest in the
world because of its enormously developed telecommunication and internet systems. This is a
important factor giving rise to the improvement in economy of the country. The European
corporate and labour laws have influenced the laws of Japan tremendously and there exists a
lots of employee laws relating to shift timings, was, hours of work. In almost every contract
of employment (BBC News 2018). In terms of environment, the seas and mountains surround
Japan making it prone to tsunamis and earthquakes. The houses are designed in ways, so that
the population can withstand minor such earthquakes.
Porter’s Analysis
Rivals: Its main competitors are Lancome, Shu Uemura, L’Oreal skin brands that gives
competition to Sodashi.
Bargaining power of the Supplier: The switching cost is low to the company as the
suppliers are an essential part. Hence, the power is low.
Bargaining power of the consumer: Due to concentrated number of competitors in the
market the bargaining power is high.
Threat of Substitution: Its main substitutes are the medical treatments such as facial surgery
are a major threat to the company.
Threat of new entry: The rate of investment while entering the market is high still there are
chances of entering the market as it is a profitable industry. Hence it can be said that it is of
medium power.

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Singapore
PESTEL Analysis
The last decade has been very fruitful for Singapore in terms of economic growth.
Singapore is politically stable and a lot more peaceful as it does not suffer from many
political risks. A number of business opportunities have improved because of the effective
political system. There are very infrequent debates between their political parties and a
restriction is free speech exists among the parties (Export.gov 2018). The economy of
Singapore does not suffer from corruption; instead it provides support to all the business
sectors of the country. Most of the workers are properly educated which enables in effective
communication and business administration. Various industries like Tourism, pharma, skin
care. have been on a steady rise due to the government made investment as well as the great
geographic location (Export.gov 2018). There however exists certain constraint like labour
shortage, increase in labour cost, and decline in the productivity which affects the overall
economy of the country. The youth of Singapore are more liberal and moving towards
individualistic cultures, the society is more adaptable and is slowly acquiring liberal western
ideologies and perspectives unlike societies of most other Asian countries. The literacy rate
of Singapore s high and the fluency of the population in English is an important factor why a
lot of businesses find the Singapore market attractive (BBC News 2018). These are the
reasons which contribute in the increase in productivity of the nation. Singapore too is
advanced in the technological fields which is a reason why the economy and the standard of
living of the population has improved so drastically. The IT structure of Singapore in
amazing and the efficient internet connectivity throughout the country makes
communications even easier. The legal settings of Singapore have been modified with time in
order to be able to meet the growing demands of the industrial and economic improvements.
There are a number of acts in relevance to the Singapore economy which includes Content

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Regulation Act, Electronic transaction act and Intellectual property rights (The Straits Times
2018). The ministry of environment of Singapore are very particular about maintaining the
natural resources and environment of the country. However, Singapore faces a crisis in water
supply and is moderately dependent on Malaysia for its water supply (The Straits Times
2018).
Porter’s Analysis
Rivals: All the skin care brands operating in this country and basically the global operators
are one of the main rivals.
Bargaining power of the Supplier: There are several suppliers in the market which makes
the power of them low.
Bargaining power of the consumer: The power of the consumer is high for the strong
competitors.
Threat of Substitution: The threat is same as medical treatments and surgey.
Threat of new entry: Since, lucrative industry but with high investment power. There are
chances of medium threat.
Recommendation
SWOT of both the Countries
Strengths
Country 1- Japan
Japan has a lucrative market for the skin care industry because the population is very
much inclined towards beauty and the want to look ageless. Skin care products, especially
ones which bring out the natural beauty of the skin are very much in demand among the

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Japanese population (Huang et al. 2013). Although the women population have a high
demand for beauty and wellness products, men too are inclined towards the usage of effective
skin care. The men usually range from 40 to 60 years of age and are mostly working.
Country 2- Singapore
As discussed, Singapore has an ever improving economy with majority of its
population having a lot of disposable income. This is the reason for increase in the business
for the skin care industry. The youth strive for new and trendy products and the middle aged
women and men want effective age defying products. Luxury skin care product is in high
demand especially ones which are made from purely natural and organic products.
Weaknesses
Country 1- Japan
There are a number of competitors for Sodashi in the Japanese market, and while
some brands are from US and UK, most are the Japanese brands itself. One of the leading
brands in the Skin care industry in Japan is Shiseido. This company has shared a double digit
market value along with a growth of 13 percent in the overall business in 2016 (Shiseido.com
2018). Apart from this, there are a number of global firms such as Lancôme, Nivea, Este
Lauder and others. Therefore, the competition for Sodashi in This country is high.
Country 2- Singapore
The market size of Singapore maybe small but there exists a huge deal of competition
among the various skin care brands, both mass and premium. The large brands that are very
popular in the country include Bobby Brown, Dermalogica, MAC, Estee Lauder, Clinique
and many more (Export.gov 2018).