Estee Lauder Companies - Development Strategy, Financial Results, Factors Increasing the Value of Products, Investment Directions, and Legal Structure – Statistics Project Example

Part Overview Estee Lauder Companies was founded in 1946 by Estee Lauder together with her husband, Joseph Lauder. When it was formed, it had four products, that is, Creme Pack, Skin Lotion, Cleansing Oil and Super Rich All Purpose Creme (Estee :Lauder-Our history, n.d.). It is one of the leading producers and marketers of cosmetics including skin care, hair care, make up and fragrance products, which are sold in over 150 countries (New York Times)
The company accomplishes diversity through financing resources and projects to add value to its products (Guin, Allen & Semenik, 2011, p.212). This acquisition has been a success for Estee Lauder, which has an average growth of 23.30% (Market Equities). It invests in sustainable packaging and customer driven market strategies, for example creating differentiated brands that serve all its targets, for its value proposition (GCI Magazine 2014).
Estee Lauders legal structure is as shown in Chart 1
Chart 1: Estee Lauders legal structure (News Releases 2014)
Arrows represent where one reports to. EVP stands for Executive Vice President.
Part 2: Strategies
Products
Chart 2: Estee Lauder Companies Products
For the year that ended 30 June 2014, Estee lauder Companies registered a growth in net sales from $ 10.18 billion to $10.97 billion (News & Events). This shows that the sales grew by 8% from the previous year. This growth was attributed to the high sales in Skin Care, Makeup and Fragrance products. The Skin Care sales rose from $ 4465.3 million in 2013 to $ 4769.8 million in 2014. Makeup sales totaled to $4210.2 million from $3876.9 million. Fragrance products registered sales of $ 1425.0 million from the previous $1310.8 million.
The sales in Makeup products (9%) were due to the differentiated strategy of branding. Gains in Skin Care (7%) were as a result of recent launches of "Micro Essence Skin Activating Treatment Lotion" and "Advanced Night Repair Synchronized Recovery Complex 2" (News). Sales in Fragrance (9%) were attributed to Jo Malone and Tom Ford.
Chart 3: Sales of Skin Care, Makeup and Fragrance products
Geography
For the fiscal year ending 30 June 2014, Estee Lauder Companies sales in America grew by 6% from $ 4302.9 million in 2013 to $ 4572.3 million. This growth was due to introduction of heritage and designer fragrance brands and also makeup and luxury brands.
The greatest growth was registered in Europe, the Middle East and Africa region at 11%. The sales rose from $ 3758.7 million to $ 4163.7 million. These sales were as a result of emerging markets in Central Europe and Turkey.
Sales in Asia and Pacific region grew by 5% from $ 2121.6 to $ 2232.7 million (News and Events, 2014). The growth though small was due to accelerated retailer orders.
Chart 4: Sales in different regions
Allocation and Distribution Channels
The Companies products are sold in over 150 countries with US taking up the largest percentage at 42%. Sales in Europe accounted for 33% of the total sales, which were $ 10968.8 million. (The Estee Lauder companies Inc). Estee Lauder Companies has limited distribution channels that complement the images for its brands. The products are sold in specialty retailer stores, upscale perfumeries, 690 single brand stores operated by the company, salons, massage parlors, online, and in 130 multi-brand stores. These channels also include stores in cruise ships, pharmacies, and duty free shops in cities and airports (Howerton, 2002, p.9). There is also a line of freestanding retail stores for Origins, M.A.C and Aveda products.
Chart 5: Comparison of sales in America and Europe, Middle & East Africa
References
GCI Magazine 2014, Available from: [21 November 2014]
Estée Lauder Lauder Companies Inc. 2014. Available from: [21 November 2014]
Estee Lauder - Our History, n.d., Available from: [21 November 2014]
Guinn, T., Allen, C., & Semenik, R 2011, Advertising and integrated brand promotion. Mason, Ohio: Cengage Learning.
Howerton, AB 2002, "The Estee Lauder Companies Background and History", University of Tennessee Honors Thesis Projects. Available from: [21 November 2014]
News and Events 2014. Available from: [21 November 2014]
News Release 2014 Available from: [21 November 2014]
The Estee Lauder Companies Inc. 2014. Available from: [21 November 2014]