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Watson’s Personal Care Stores. Market Expansion Identified Driver.

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Presentation on theme: "Watson’s Personal Care Stores. Market Expansion Identified Driver."— Presentation transcript:

1 Watson’s Personal Care Stores

2 Market Expansion Identified Driver

3 About Watson’s ◈ Owned by A.S. Watson Group (ASW) ◈ Work with more than 5,000 suppliers in the world ◈ Provide 180,000 distinct items for sale ◈ Operating in 25 markets worldwide ◈ The largest international health & beauty retailer in Asia and Europe

4 Distribution Map

5 Where Are We Going?

6 Why Are We Going? Target Market: ◈ Women from 18 to 45 ◈ Asian Australians now make up some 12% of the nation's population ◈ 20% of China-born international students ◈ 19% of residents in Sydney are of Asian descent ◈ 18.2% of residents in Melbourne are of Asian descent

7 Keys To Success ◈ The largest health care and beauty care store in Asia ◈ Consultants for personal care in each retail store ◈ Providing products from various brands around the world ◈ Company brand products ◈ Strong band name ◈ Also sell commodities, food and drinks

8 PESTLE Analysis Political ❏ -Efficient and transparent legal system ❏ -Stable political environment ❏ -Corporate tax rate of 30% ❏ -Less corruption than countries such as Canada, UK, and US

9 PESTLE Analysis Economic ❏ -GDP of $52,000CD ❏ -AUD currency is extremely stable ❏ -Is the world’s 13 th largest economy ❏ -Entering 24 th consecutive year of uninterrupted economic growth

10 PESTLE Analysis Social ❏ -Diversified ethnicities ❏ -13 th ranked education system in the world ❏ -Minimum age is $16.87 an hour ❏ -Publicly funded health care and education

11 PESTLE Analysis Technological ❏ -Government funded research and development ❏ -Proper maintenance of infrastructure ❏ -Cell and internet service available throughout the country

12 PESTLE Analysis Legal ❏ -3 branches of government ❏ -Contracts do not have to be on a formal document and signed to be legally binding ❏ -If upto code, it is easy to import products into Australia

13 PESTLE Analysis Environmental ❏ -Volatile weather conditions ❏ -Diverse wildlife ❏ -Strict laws enforcing the removal of natural resources

14 What Does It Mean? ❏ -We do not see issues in the future dealing with the Australian government ❏ -The country has the proper infrastructure and resources needed ❏ -With consecutively growing economy with diverse ethnicities we see Australia as a logical destination to move our company

15 Comparative Advantage

16 ● Almost 40% of the workforce holding a tertiary qualification or advanced diploma ● The first choice education destination within the Asian region ● Rich in natural resources ● Female population is increasing to 50.2% of the total ● High level of disposal income ● An opening trade market ●10th in the country of ease of doing business

17 Market Structure ●Monopolistic Competition ●Limited barriers to entry ●Large competition from Australian drug store’s

18 Social Trends ●We increasingly rely on use of skin product ●Awareness of healthy skin and body care ●Women’s inherent love for beauty ●Environment: air pollution, low water quality ●Daily life: bad habits, fast pace of life, stressful

19 Corporate Social Responsibility Workplace: safe, healthy,supportive, discrimination-free environment 4 pillars Marketplace: setting out the same ethical expectation with business partners, offering the products of best quality

20 Corporate Social Responsibility Environment: energy-efficiency, reduce waste and greenhouse gas emission Community: develop programs with organization’s that are relevant to local community needs ( beach cleanup, gardening for the community )

21 Porter’s 5 Forces

22 Australian Beauty & Health Industry ➢ Modest growth of 2% in 2013 ➢ Consumers seek products with multiple benefits ➢ Mass resurgence in drugstores ➢ Price promotions and discounting ➢ Australian households spent 8 billion on beauty and 10.5 billion on personal health care in 2012

23 Competitor Priceline pharmacy -A health and beauty retailer of cosmetics, skincare, haircare and healthcare products - Over 330 Priceline brand stores throughout Australia. - Has over 4 million memberships, making it one of the largest health and beauty retail loyalty programs in Australia.

24 Opportunities & Threats -Potential customer base among Asian females (own their brand loyalty) -Professional sellers speaking different languages -Unique products -Lower prices -Lack of popularity among locals

25 Bargaining power - Suppliers have little bargaining power : a large batch of demand for stores all over the world (economies of scale) - Customers have high bargaining power: large competition in Australian industry

26 Self-developed Products ◈ Products owned by Watsons and manufactured in Mainland China (low cost) ◈ Issue: transportation cost ◈ Solution: already have warehouses in Southern Asia: Malaysia, Singapore and Indonesia, much closer and cost much cheaper transportation fee

27 Strategy Transnational Strategy

28 Entry Method Greenfield ●Late mover in Australia health and beauty industry Scale of entry ●Strategic commitment

29 Action Plan -One store in each city -Find out customer preference -Build warehouses -Adding more stores over time -Using similar marketing strategy we did in other countries -Market position: localization

30 Risks Involved -Variability of Australian currency -Competition from large multinationals in industry -Low brand awareness from residents not of Asian heritage -Do not yet know consumer preferences

31 Thank You Any Questions?


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