KraveBeauty is a skincare company that deals in the sale of a skincare cleanser. The company also offers education tips to its customers regarding the use of the product. It is based on transparency as it markets its product while asking the people to cleanse their skin less. This is to prevent them from the adverse effects associated with the use of the cleanser. The company was founded by the YouTuber and beauty influencer Liah Yoo in 2017. She is known for sharing tips on skincare that empower viewers with knowledge and experience that she obtained while working with AmorePacific, a Korean based company (KraveBeauty | About Us, 2020). KraveBeauty is based in Seoul, South Korea and New York, United States. It has expanded to other countries like Singapore and Malaysia.
The company operates in one of the most influential skincare products like Kale-Lalu-yAHA, The Best Shield, The Great Barrier Relief, Match Hemp Hydrating Cleanser, and Oat So Simple Water Cream (Shop All, 2020). All these are skincare products which the company obtains from various manufacturers of beauty and personal care products. The primary competitor for KraveBeauty is Amazon.com which also sells the same products as KraveBeauty. However, it rebrands the products and sells them for KraveBeauty hence increasing the market reach. The company has also partnered with other online sellers like Jumia.com, which has increased the market reach in Kenya. In other countries like the United States, South Korea, Malaysia, and Singapore, customers can obtain the products from the local shops or through the KraveBeauty website and Amazon.com.
The company relies on social media in reaching its customers and skincare companies that are manufacturing the products. Liah Yoo, the founder of KraveBeauty, uses her YouTube channel, which has close to 1 million (941,000) subscribers for reaching out to customers. The company competes with other influencers on YouTube like Hyram and Mixed Makeup, but its legacy built on transparency, experience, and educational tips make it outstanding. Across all the social media platforms, the company has over 600,000 customer reach on average. Since it is a small company that is currently growing, it is difficult to estimate its net worth and profitability amid the COVID-19 crisis. It is solely owned by the funder Liah Yoo.
The company began its international operations initially in two countries, the United States and South Korea. Recently, it has expanded its services to three more states, i.e., Malaysia, Singapore, and Kenya. Its main products are vegan-friendly, free of cruelty and are their formulation is without fragrance. They also lack colourant, essential oil, and possible sensitizers for allergies. This makes the products the right preference for the majority of the people. SWOT analysis is a structure designed to assess the company's competitive position by looking at both the internal and external strategic factors. The internal factors include the company's strengths and weaknesses, while the external ones are threats and opportunities. Areas of concern under these factors considered in a swot analysis include the customers that prefer the brand, the supply chain management, and marketing strategies (Gurel and Tat, 2017, p.995). These factors are given in point form, as shown below.
Effective marketing strategy: The company uses an effective marketing strategy through social media platforms, with YouTube being the leading. This has helped the company to enhance the business to consumers strategy.
Social media outreach: Other social media platforms, apart from YouTube, include LinkedIn, Facebook, Twitter, Instagram, among others. Customers can engage with the company through social media hence establishing a more personal relationship. YouTube allows for sharing of tips in a more practical manner while the other platforms are picture oriented; therefore, customers are able to evaluate what they want before placing orders.
Sponsorship: The company may not be sponsored, but the products can be sponsored to be offered out as gifts to customers who engage in competitions held through social media platforms. This helps in increasing the customer base through the new products introduced through the competitions.
Useful products: The products offered by KraveBeauty are very effective in protecting the skin. They are free of allergies and are formulated without fragrance and oil. Therefore, they are healthy products.
Effective supply chain management: The company offers shipment services to customers around the world in the countries where it operates. Stocking is one major area that they focus on to ensure that the market is always in supply.
Outsourcing: The company sources its products from the best cosmetics manufacturers in the world. This helps in enhancing its legacy.
Transparency: The company provides customers with information regarding the possible effects of overusing the products. They encourage less cleansing among the users of their products.
Diversified products: The company offers a variety of products that can be used for various cleansing purposes. This gives customers a wide range of products to choose from.
Preference by young people: Another strength is that the company is preferred by young people. Skincare has grown to become a significant part of life, and many people are looking for the best products that keep their skins healthy. KraveBeauty is the ultimate choice for many young people.
COVID-19 Pandemic: Due to the COVID-19 pandemic, KraveBeauty is challenged with the problem of shipping products to its customers. It is also challenging to restock the products that have been sold out because transport has been affected. The pandemic has also reduced demand for the products hence affecting sales.
Lack of broad international outreach: The company is only fully operational in 5 countries.
Shortages in the supply chain: The supply chain faces shortages since most of the products are outsourced from a third party. This is due to overdependence on suppliers.
Expensive products: Most of the products offered by the company cost above $20. this price is very high for many people.
A limited line of products: The company only deals with skincare products while the range of cosmetics has many more beauty products. Increasing the number of beauty products would be beneficial to the company as it would enhance diversity.
E-commerce: The company benefits from the use of e-commerce in the sale of its products.
Growing skincare industry: The industry of skincare is continually increasing.
Culture of skincare practices: Increasing popularity of the importance of skincare has led to a culture of routine skincare practices.
Diversification into other products: The company has the opportunity to increase its product base in the line of cosmetics.
Global expansion: Global expansion in emerging markets in Asia and Africa provide the company with lucrative opportunities.
Competition: The company faces competition from other sellers of the same products it offers. Amazon is the biggest competitor.
Exchange rates: The exchange rates keep fluctuating; hence the company can be negatively affected since it operates in a global marketplace.
Global economic slowdown: The COVID-19 pandemic has caused a worldwide economic downturn which is affecting KraveBeauty just like any other company.
Counterfeit products: The existence of fake products in the market present significant threats to the company.
KraveBeauty is both a domestic and global brand. Administering in a global environment influences the growth of the company's business. The factors here are external, and they include political, social, economic, legal, technological and environmental. These greatly influence the skincare and cosmetics industry. The PEST analysis is a structure of a report that examines the influence of these factors on the company (Shatskaya, Samarina, and Nekhorosheva 2016, p.47). It is as given in the details below.
The main political factor affecting KraveBeauty is trade war due to political differences between countries. In the United States, for instance, import restrictions that have been increased by the Trump administration are likely to affect global trade. Products sourced from South Korea may not be allowed in the American market.
Lack of domestic and foreign demand: Lack of demand in the local and international markets affects the company's sales adversely.
Currency fluctuations: The fluctuations in currency also have negative impacts on revenue and income generated by KraveBeauty.
Increased trends: The culture of skincare is increasing globally due to increased awareness of the importance and availability of skincare products.
Digital devices: The increased use of tools like mobile phones and laptops to access the internet enhances the company's marketing strategies. The devices give access to social media platforms as well as the e-commerce services used by the company.
Technological innovations: These help in advancing the methods used in the manufacture of products to make them more productive and sustainable.
Regulatory measures: The company is required to meet the legal requirements before commencing operations in any country. Also, the technology used in providing solutions in manufacture as well as the sale of the products is required to comply with the regulatory measures related to technology.
Waste management: The company is faced with the need to promote proper waste management practices among the users of its products.
Sustainable products: The products present environmental implications that need to be attended to. There is a need to develop products that are environmentally friendly.
PART II: Business Strategy Proposal
KraveBeauty is a skincare business organization that strongly believes that decisions should be made deliberately. The company is built on the mantra and intentionality that choices have meaning and on a culture of transparency in skincare practices, mode of running the business, and the products produced. Achieving sustainability for the company is a journey that is far from resolved. This is because of the nature of the skincare industry, which is growing slowly. It is not a fast fashion. Therefore, the creation of sustainable changes will take a bit longer (Cheryl Ng posted on LinkedIn, 2020). Below is the proposed business strategy for KraveBeauty.
The company's central values include truth, transparency, and customer value. The vision is to become a leading company in helping people to take care of their skin and encourage companies to manufacture the best products. The goals are as stated below (Our Product Development Philosophy, 2020):
- To improve specific products to work for every community member, including people suffering fungal-acne.
- To keep ingredients used efficiently.
- Remove the middleman and work directly with sources to enhance transparency and ingredient traceability.
- Enter into partnerships with other dealers like Amazon.com and Jumia.com.
In order to achieve the above goals, the company will invest in research and development to improve the effectiveness of the products in treating fungal infections. Increasing e...
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