"Unfortunately, the first strategic plan to provide the regeneration did not take place at the required pace, but the company learned some lessons from it. We have skipped the best opportunities to grow higher. This was the main cause of our failure to win new consumers at a faster pace." "We were not successful in establishing positive growth in the consumer base. This was one of the reasons why we were not fast enough in attracting new consumers," Stéphane de La Faverie, the company's recently named CEO, said when discussing Estée Lauder Companies' performance on his first call with analysts almost a week ago. He was, by nature, De La Faverie was looking for a greater focus on the company's future and used some brand's ways in the mall as leverage to create a sense of urgency to the new goals. However, the new and old measures set in place for the overall business improvement seemed to reduce the desire for change.
The company has the capability to do the business organization, to get licenses, and to make the non-core areas of the company more functional. Nevertheless, the main problems are making it the brands' choice and rebuilding a heart of the house the signature brands used to be. Additionally, he will be buying brands to generate company growth, per Scott Chen, an equity analyst with TD Cowen. Though he has the story of "Aussie Battles the Amazon," he finds it very appealing as a reader that some brands will suffer because they will not be acquired when the top executives make the decision.
The new approach suggested by the multinational on Tuesday, which is named "completely revised beauty," is a product of the company's creativity: it is a newly invented event in their company. The scheme that De La Faverie presented presupposes that the company is going to have more new products for its brands thanks to the tripling of the number of product launches all year long.
He said that one of the problems of Estée Lauder Companies is that the consumers of prestige beauty are very fast in changing their demands, and they are the company's throttle to grow. However, the answers are not only visible, but also the company is in the initiation of a fragrance lab in Paris, and they are also in the process of getting clinical accreditations for the skincare brands.
De La Faverie told the press that they were planning to extend their strategy to "consumer-preferred, high-growth channels," such as e-commerce, specialty retail, European pharmacies, and travel retail in the Western countries. On a positive note, it might be observed that they have not only evolved existence but have also reached the depth of the soul. There is no company in this category that is not as successful as The Ordinary, which is the only non-prestige skincare label of Lauder. The only non-prestige skincare label of Lauder is The Ordinary, which guarantees its superior status as a pure player. It was a strategic advantage for the company when the department stores were at their prime.
Faster execution is by all means a must for the swift deployment of the strategy. However, it must be in concert with accuracy. The management shifted the power dynamics in the team by setting the record straight about the whole matter of the changes.