Strengths

Strengths
1. Estee Lauder has a Strong Distribution network with a large number of outlets.
2. It has a low-cost structure, which provides it with an advantage over the competition.
3. It has a strong financial position with positive profits reported in the past few years. It also has a strong asset base.
4. It has a skilled labour force that is highly qualified, innovative and diversified.
5. It has a strong presence on social media. Weaknesses
1. A high proportion of property in use by Estee Lauder is on rent, and rental charges need to be paid.
2. Low amounts of spending on research and development as compared to the competition.
3. It has a high employee turnover rate, with low employee motivation and working morale.
4. It has liquidity problems with low quick ratio; the level of current assets is less than current liabilities. It also faces cash flow problems.
Opportunities
1. Internet users are increasing around the world. E-commerce is also growing with the increase in internet usage.
2. Social media users are increasing worldwide.
3. Household income is increasing and so is the consumer spending. Inflation in the economy is expected to remain low.
4. Growth in environmentally friendly products and services. Government is offering subsidies on these.
5. Interest rates are low, which provides an investment opportunity for large projects. SO Strategies
• Increase marketing to attract consumers to spend (S1, S3, O3).
• Use its presence on social media for marketing and to attract customer towards its website (S5, O2, O3).
• Develop environmentally friendly products through innovation, at a low cost so that they could be sold at a low price (S2, S4, O4).
• Market products at low prices by offering discounts. This would help increase sales in volumes and is feasible due to low inflation and cost (S2, O3). WO Strategies
• Finance ownership of the property through low interest rate to increase the proportion of owned property to rented property (W1, O5).
• Increase payrolls, provide incentive packages and benefits to employees to reduce turnover and improve work morale. This could be possible as costs are low currently. (W3, O3)
Threats
1. There is a threat of new entrants coming into the market.
2. The exchange rate has been devalued.
3. Fuel price has risen in recent years making inputs expensive.
4. Competition within the industry is increasing.
5. More substitute products are now available. ST Strategies
• Use a strong distribution network to reach out to customers and fight off new entrants into the market (S1, T1).
• Use its strong financial position to invest in intellectual property rights. This would help compete with increasing competition in the market (S3, T4).
• Use its innovative teams to find cheaper alternatives to fuel so that these could be used, thereby reducing costs (S4, O3). WT Strategies
• Increase spending on research and development to enable Estee Lauder to better compete with competition (W2, T4).
• Provide incentives, increase engagement, or provide a better work environment to retain talent. This will ensure that employees don’t leave and join competitors (W3, T4).