Extensive SWOT Analysis of Estée Lauder – An American Cosmetics Brand

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Extensive SWOT Analysis of Estée Lauder – An American Cosmetics Brand

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My name is Aditya Shastri and I have written this case study with the help of my students from the online digital marketing course at IIDE – India’s #1 digital marketing institute.

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Previously, we had conducted a detailed SWOT analysis of one of the top beauty companies in the world which is Revlon. Now we move on to the SWOT analysis of Estée Lauder which is another extremely successful company in this sector.

Estée Lauder is one of the global leaders in the beauty market, delighting customers with transformative beauty products and experiences about their individual beauty. Estée Lauder has been a well-known brand since 1946. Its 25+ products are sold in approximately 150 countries and territories.

Estée Lauder’s digital marketing has always been strong and it has played an important role in getting their brand the recognition and success it has achieved over the years. It is extremely important to have digital skills and be up to date about them so that they can be applied at the right time to provide you success. To get such skills and knowledge on digital marketing take IIDE’s Free MasterClass on Digital Marketing 101 by the CEO and Founder of IIDE, Karan Shah.

Through this blog, we will provide you with the elaborate SWOT Analysis of Estée Lauder but before we do that let’s first take a look at the company and understand its history, products and competitors better.
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About Estée Lauder

SWOT Analysis of Estée Lauder – Estée Lauder

Estée Lauder was established in 1946 to sell skincare, makeup, fragrance and hair care products. The founders of the brand are husband and wife named Estée Lauder and Joseph Lauder who began their business of producing cosmetics in New York City. They both first started by selling cleansing oil, skin lotion, super-rich all-purpose creme, and creme pack.

Slowly within 15 years, they evolved into one of the famous cosmetics brands with enormous stores in the United States. The brand expanded its arms and the lady founder of the brand introduced Clinique in the market which was again operated by the daughter in law of Estée Lauder named Evelyn Lauder.

Estée Lauder companies expanded their business exponentially and are still doing. They are leading the market of cosmetics and skincare industry along with introducing organic products for both men and women segment through fast indulgence of newer technologies and working along with evolving consumer trends.

Quick Stats on Estée Lauder Founder Estée Lauder & Joseph Lauder
Year Founded 1946
Origin New York City
No. of Employees 48,000
Company Type Public
Market Cap US$99.39 Billion (2022)
Annual Revenue US$14.29 Billion (2020)
Net Income/ Profit US$2.87 Billion (2021)

SWOT Analysis of Estée Lauder – An Estee Lauder Cosmetics Counter

Products of Estée Lauder

Estée Lauder has become one of the best skincare brands and sells a variety of high-quality products such as

Skincare
Makeup
Fragrance
Haircare

Competitors of Estée Lauder

Estée Lauder has competitors from all around the world and some of the top competitors are:

Natura Brazil.
Revlon
JAFRA
Shiseido
L’Oréal

Since we have now got to know a lot about the company, let’s get into the much-awaited SWOT analysis of Estée Lauder.

SWOT Analysis of Estée Lauder

SWOT analysis is known as analysing the strengths, weaknesses, opportunities and threats of a company. It helps to understand the competitive position of the company and guides you to conduct strategic planning accordingly. You can understand the internal and external factors of the company through this particular method.

It is created to give someone a realistic image of a company. It also gives a data-driven and very fact-based look at the company.

To better understand the SWOT analysis of Estée Lauder, refer to the infographic below:

SWOT Analysis of Estée Lauder – SWOT Infographics of Estée Lauder

Now first let’s begin with the strengths of the company from the SWOT analysis of Estée Lauder.
Strengths of Estée Lauder

The strengths of a company are what make it different from the rest and give it an upper hand. It is what helps the brand gain success. Given below are the strengths of Estée Lauder:

The Oldest: Estée Lauder is one of the brands which is the oldest in the cosmetics industry. The legacy of 75+ years helps Estée Lauder to develop trust among its customers and potential customers.
Range of Options: Committed to creating a highly personalised beauty and cosmetic experience, they have a range of makeup, fragrance, haircare, beauty and skincare products to cater to the various needs of their customers.
Mergers & Acquisitions: The brand is always ahead of its competitors in terms of acquisitions including an investment in the Toronto-based MAC Cosmetics in 1994 and acquisition of it in 1998, the acquisition of Smashbox Beauty Cosmetics, Inc in 2010 and so on has given the brand power to increase its foothold in the market.
Great Social Media Management: On different social media platforms, this brand has a very strong online presence and thus has been able to reach many individuals worldwide and attract people with its campaigns and social media management.

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Strong Geographical Presence: Estée Lauder has a very good geographical presence and is sold in almost 150 countries all over the world. This shows that the brand provides easy accessibility and has a wide target market.
Diversified Workforce: Estée Lauder has always believed in having a diverse and very inclusive workforce that enables the employees to create innovative products and understand consumers and their constantly changing needs.

Weaknesses of Estée Lauder

The factors that prevent a company from working at its true potential are the specific areas in which the company could do better. Some of the weaknesses of Estée Lauder are:

International Presence: The brand record of Estée Lauder isn’t as high as the other popular brands. Yet to project itself as a global player, especially in emerging economies like India, China and Russia.
Quite Expensive: Estée Lauder comes under the premium segment and thus its products’ prices are quite on a higher side as compared to other brands in the market offering the same products at a little cheaper price. Due to this, people who want to buy a product from Estée Lauder are taking their feet back just because they are not willing to pay.
Customer Experience Becoming Expensive: Estée Lauder is always trying to emphasise creating customer experience at the best possible and that’s good but sometimes over-focus on creating customer experience causes customers to take advantage of such experiences.
Counterfeited Products: Nowadays has made it easier for design pirates to make fake products due to which fake products look more accurate and quicker than ever as detailed shots of the products are posted within a few minutes of launching them, so sometimes it is hard to trust them, due to which other brands also suffer somewhere.
Limited Product Category: Estée Lauder has stopped themselves with cosmetic products alone. They could have expanded their product lines to bath and shower-based products which could have generated more revenue than their competitors.

Opportunities for Estée Lauder

The opportunities are also known as the favourable external factors and are the areas where a company can take advantage of and become better amongst its competitors.

Good Market Knowledge: Since Estée Lauder has been in the industry for so long and has been one of the leading brands, it has great market knowledge which it can use to understand the ever-changing consumer tastes and needs and act on accordingly to gain success in the market.
Men’s Segment: Estée Lauder is a brand meant for women, and with the fastest growing men’s care segment there are great opportunities and a lot more to explore with skincare products for men as it will open a new market for Estée Lauder.
Growing Demand: The market for hair care and personal care products is expanding, and it has significant demographic and geographic potential. The market potential is always increasing as more people use hair care products daily and there is so much competition in the hair care industry, people are well aware of its importance.
Exposure of New Markets: Consumers always look forward to paying higher prices for greater value products and opportunities to penetrate the market. The opportunity to bring into emerging economies by engaging with their environment can help to raise Estée Lauder. Recently, Estée Lauder expanded its footprint with the New Jo Malone London store in Mumbai, India.
Organic Products: There is increasing demand for organic cosmetics. This demand is a favourable sign to Estée Lauder people who have employed organic R&D since the beginning.

Threats to Estée Lauder

These are what can cause harm to any organisation and need to be dealt with smartly to avoid any problems for the company. The threats for Estée Lauder are:

Expensive Testing Process: It is known to all that this company’s products are allergy tested 100% fragrance-free. They do not use any animals for any kind of testing and encourage people not to. Thus it results in expensive testing processes for the company.
Market Difficulty: Almost all players come under the beauty category and differentiation is very difficult. Customers are very anxious about the beauty category so attracting them needs more brand quality and services.
Competition from Other Brands: New skincare and cosmetics brands are also creating products with newer competitive innovation and technology for retail stores which is increasing the competition of Estée Lauder.

Health Concern: The growing trends of organic and cruelty-free products poses a great danger if the products offered are not environmentally friendly. Estée Lauder should now focus more on expanding its reach to natural and organic products.
Controversies & Lawsuits: Estée Lauder had many controversies including SOPA, Child Labour, Animal testing, Boycott and anti-boycott. Such controversies had significantly reduced the brand reputation of Estée Lauder in the market.
Negative Publicity: It is showcased that most cosmetic brands show false advertising such as improvement in skin tone. A wide range of people say that these cosmetic products are against culture, cause ill effects on health and skin, and they aren’t natural.

This ends our extensive SWOT analysis of Estée Lauder. Let us conclude our learning below.
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To Conclude

Estée Lauder is one of the biggest and most thriving skincare and cosmetics brands in their industry and continues to do well. Through the SWOT Analysis of Estée Lauder, we have come to the understanding that it has a great geographical and social media presence which leads to it having a huge customer base and target market. Its product quality and product innovation have been one of the major factors leading to customer satisfaction

Also, a diversified workforce has helped it gain success in the market. However, it needs to expand into other product segments and spend more on its R&D as it is important for the company, their decision-making process needs to be changed and made better and employee satisfaction should be measured to understand the high attrition rate.

The marketing efforts made by a company lead them to a successful position and help them achieve their goals. In today’s time, digital marketing has gained immense importance and one should be skilled in it to be better and at the top.

Estée Lauder has been reaching people all over the world and a major reason it has got to where it is today is through its marketing efforts. If you also wish to be skilled in this field and become more knowledgeable about it then have a look at IIDE’s 3 Month Advanced Digital Marketing Course and apply for it.

We hope this blog on the SWOT analysis of Estée Lauder has given you a good insight into the company’s strengths, weaknesses, opportunities and threats.

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