BY: SHUANG YUAN
ABOUT LUSH - Lush is a British handmade cosmetic retail company - Founded by Mark Constantine and Liz Weir, in 1995 - Offers cosmetic products that are made from fresh and natural material for both hair and skin - Advocating green and ethical values to the public - 700 stores worldwide
The original Lush store, located in Poole, Dorset, UK.
CORE VALUE-
Lush Believes... in making effective products from fresh*, organic* fruit and vegetables, the finest essential oils and safe synthetics.
THE GREEN POLICY
Packaging: We love it naked. Lush is usually referring to the products you can buy with absolutely no packaging at all, like our Bath Bombs, massage bars and solid shampoo bars to name a few.
THE GREEN POLICY
Waste: Less is more. - Pots and bottles are made from BPA-Free, 100% post-consumer recycled (PCR) plastic. - Store carrier bags are made with 100% post-consumer recycled paper and are compostable. - Products for shipment are packed in biodegradable plastic bags, recycled paper and/or biodegradable filler and eco-friendly packing tape. - Gifts are wrapped in 100% recycled paper and packaged with biodegradable filler.
Lush have been fighting against animal testing for decades and believe in only buying ingredients from companies that do not commission tests on animals. They only test their products on human volunteers, and have turned their belief into a company-wide policy.
Lush puts an enormous amount of love and care into making their products, so it’s important to them to find ingredient suppliers that do the same! They want to know where their ingredients come from and how they’re made.
Charity Pot
- In 2007, Lush invented a beautiful hand and body lotion called Charity Pot. 100% of the purchase price goestowards supporting humanitarian, environmental and animal rights causes locally and around the world. - Since its launch, Charity Pot has donated more than $10,000,000 to 850+ grassroots charities in 42 countries.
$6.95 - $25.95
STRENGTHS - Lush has more than eight hundred chain stores in approximately 50 countries around the world. This enables the company to operate at scale to reduce operational costs comparing to small businesses. Meanwhile, it can also leverage its global resources to develop better business strategies for the future - Has a strong brand image by advocating the ethics of its business. This allows the company to form and develop healthy relationships with the customer crowd and business partners, which can sometimes be more effective than traditional marketing. - As an eco-friendly company, LUSH is able to significantly reduce packaging cost comparing with others. - Offers a wide range of products such as bath, shower, hair, face, body, makeup, and perfume. - It has strong product development capability while keeping its commitment of providing fresh and natural goods only.
WEAKNESSES
- the product pricing is relatively higher than other comparables, which would limit the company’s profitability if it cannot cover a broader market segments. It is possible that the company would even suffer financial pressure under economic downturns as people will cut their spending on consumer discretionary products. - Brand image does not necessarily mean that it has done a good job on marketing. There is still a long way to go comparing with global cosmetic brands that have much higher exposure in commercial advertisements, magazines, and sales promotions. - Product is all natural and fresh, this would add greater difficulty to its supply chain and stock management because the product is not so long-lasting.
OPPORTUNITIES
- In the current social environment as people pay much more attention to well living and improve life quality. Its fresh and natural products would be more appealing and appreciated comparing with traditional products. - As the industry pioneer, LUSH is able to seize the head start advantage and gain market share quickly. The company could gain “sticky� customers because it attracts them by its product as well as the ethical business philosophy.
THREATS
- LUSH’s high product pricing could be a potential threat for the company at the arrival of another economic crisis, because people would naturally choose cheaper alternatives when they are under financial stress. - major cosmetic firms such as P&G and L’Oreal can become a direct competitor of LUSH once they find this market segment is profitable as well as strategic to their current business lines. They can easily access this market since they have strong and resourceful platform, not to mention their financial capabilities. It is possible for these global conglomerates to outcompete LUSH simply by starting pricing and marketing wars.
RECOMMENDATIONS
- go public so that it can acquire more capital on its balance sheet. It would allow the company for future expansion, better marketing, and perhaps even create an industry chain itself in order to achieve better operation cost and to ensure product quality. Such expansion can also have a greater impact to make the general industry practice to become more ethical. - LUSH has an underpenetrated market in China, and this is partly due to the fact that most Chinese cosmetics businesses use animal testing as a common practice. However, this does not give LUSH the reason to not access the market and try to make a change. If successful, the sizable Chinese market can help the business to enjoy a significant step-up in earnings.