Table 31. Business model – Cosmetic Company

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has made an investment of 2 million USD in its manufacturing plant to improve operations through low-resource-demanding technologies and achieve higher efficiencies in the development of innovative and creative fragrances (La República, 2018). Additionally, the company has implemented an innovation unit in order to test more than 500 different new formulas per year (Revista Dinero, 2019). Furthermore, more than 25% of the new sales every year originate from new products (Cosmetic Company, 2017).

Operational efficiency has allowed the Company to achieve an economically and environmentally sustainable business. For example, since 2013, they have saved more than 50.000 m3 of water and between 2016 and 2017, more than 1200 MJ in energy consumption (Cosmetic Company, 2017).

Table 31 presents a summary of the environmental practices observed in the Business model dimension.

Table 31. Business model – Cosmetic Company Esa factor Category Main features

Business Model

Dynamic * R&D capabilities for the development of 500 different new formulas per year. * Operational efficiency through the optimization of operations and low-resource-demanding technologies in order to achieve an economically and environmentally sustainable business.

c) Manager`s perspective

The founder holds a Bachelor of Science in Business from a North American university and, together with his brother, inherited a family business focused on cosmetics. The founder began to work in the company as a sales manager in the late 60´s. He was the head of the Company in 1970 and in 1985 he launched a brand in Colombia, which would become a Multilatina Cosmetic Company

In 2018, at the closing of this thesis, the founder delivered his position to a new president, who is woman12 and was the former Commercial Vice President of the Company. The founder still remains in the presidency of the Board.

12 Emphasis is added because this company operates a direct sales business through a women´s network and mainly focused in customers that are mainly women.

146 | Carlos Fúquene Retamoso

Influencing factors present in the manager`s perspective were associated to the CEO´s personal values in conjunction with his favorable attitude toward profits and a transactional leadership style.

- Personal values

In relation to personal values, the CEO exhibits self-directed openness to change (e.g. independent thought) and stimulation (e.g. novelty to overcome challenges):

…“At the end I chose to leave and open regional markets. My brother stayed in front of the company and when I returned we had different points of view about the future of the Company”…(Gamarra, 2013)

The founder has built a company that runs on a business model (i.e. direct sales through consultants) which allows women to earn an income for being distributors of the Company´s products. According to the founder, such economic option gives women the flexibility to plan their work schedule and take care of their family responsibilities (Niethammer, 2012).

Besides, the founder started his own business hand in hand with a program for women (i.e. sales consultants) to strengthen their leadership and entrepreneurship capabilities and improve the firm´s performance: “Investing in women and making them the company´s most valuable asset enhances competitiveness, changes the way of doing business and changes lives” mentions the Social Innovation Director of the Company (Niethammer, 2012).

Finally, in establishing a novel business model during the 60´s to offer Latin American women an economic independence opportunity to achieve a key role in society, the CEO exhibits novelty to overcome society challenges as one of his main personal values. To point out the reflection about novelty, in the 60´s only 2 adult women out of 10 used to work in Latin-America and nowadays at least 6 out of 10 women are having a key role in the labor market (CISCO, 2018).

- Perspective towards ESA

The CEO´s perspective towards ESA is focused on profits in order to achieve economic benefits while fulfilling the basic rules of society. The founder has mentioned that he is fully supportive of some of the initiatives related to the

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beauty market, specifying that he has been fully aware of activities related to women care and empowerment.

…” From the beginning of the company 45 years ago we have been motivated by a purpose: to propel beauty and personal fulfillment… We are helping more than one million women the opportunity to improve their lives ... achieve personal goals, contribute to their homes and help their communities as well…(Gomes, 2013).

In highlighting the key role of direct sales consultants in the success of his business, the founder exhibits his expectation about maintaining the business model that allows the company to thrive on a distribution network of women consultants13 .

Additionally, Public statements, reports and interviews exhibit his attitude towards CSR:

…“ Assuming the power to make our dreams come true means recognizing that our actions and decisions have an effect on our environment, and it is up to us to have a positive effect on it “...(Cosmetic Company, 2018b).

The founder confirms his will to fulfill the basic rules of the environment:

…“Working for the social, environmental and economic dimensions of the sustainability of Latin America is a way to give life to our main purpose of promoting beauty ”… (Cosmetic Company, 2018b)

During the corresponding interview, an environmental officer also mentioned that the support of the founder to environmental practices constituted a key leverage to articulate the purpose of “promoting beauty”, with the implementation of environmental strategies by “establishing a policy to becomes responsible actors in the consumption of resources, using chemical substances in a responsible manner and protecting the environment for future generations.

13 “Direct sales is a business model where independent contractors (i.e. consultants in the Cosmetic Company case) sell the company’s products directly to consumers. There is no fixed retail location and direct sellers often work out of their homes” .