wyzant cosmetics

WYZANT COSMETICS

Name of Student

Institution Affiliation

PART ONE: EXECUTIVE SUMMARY

The plan is to develop a cosmetic company by the name “Wyzant cosmetic and fragrance company” that creates innovative products in the cosmetic industry market. The company will be located in Kansas and other major cities in the United States of America. The cosmetic company will be a sole proprietorship company owned by Jade Wyzant. I will contribute $ 30,000,000 for a startup and the remaining $10,000,000 will be a bank loan from JPMorgan Chase with a 10% interest rate. The startup capital will be used in renting the building for 3 months, purchase of the machinery for juice extraction, and mixing. Purchase of uniforms, leasing vehicles, furniture’s, and employees first-month salary.

The company will be manufacturing foundation, eyeshadow, lip gloss, mascara, lipstick, skincare, hair care and shower products, nail care products, sun care, baby care, deodorant, shaving products and fragrances. The management team at Wyzant will include the CEO, retail director, creative director, administrative assistant, senior manager and design talent. The management team CEO has over 15 years of retail experience and in his 15 years of operation, he has managed over 7 regions of the USA major cities. The retail director has 10 years of experience in several businesses. She has created several retail links in six companies that she has worked with previously. The creative director has 10 years of experience in the cosmetic manufacturing industry. In his 10 years career, he has overviewed several cosmetics and beauty products that are highly valued in the market. The senior manager has managed 3 companies in his career. She has skills such as, industriousness, patience, and team building that are highly valuable in the running of Wyzant company.

The main objective of Wyzant is to provide quality, fresh and affordable cosmetics that will enable our clients to improve, maintain, and care for their general body, skin, and hair. The goal of the company is to obtain the maximum satisfaction from the customer through quality cosmetic products in the market, long-term and continuous supply of the cosmetics and beauty products, and to create client’s loyalty to our general cosmetic products in the market.

To attain the set objectives and goals of the company, the company will employ its research on oils, herbal products, fresh fruits, vegetable, and other organic products to create foundation, eyeshadow, lip gloss, mascara, lipstick, skincare cosmetics, hair foods, and general skincare products to meet the standards of the clients. The company targets the males and female population of all genders and ages. However, the largest targeted population is women because they are the main users of various cosmetics, hair food, skincare and general body lotions. The female population will be grouped according to the type of product they are willing to use for their skincare and other general body requirements.

The company’s main competitors are MAC, NYX, KKW BEAUTY, KYLIE COSMETICS, FENTY BEAUTY, LOREAL, and COVERGIRL. Mac is a Canadian company whose headquarter is in New York. The company is a threat because it manufactures and develops new categories of cosmetics each year which serve the demands of the consumers in the cosmetics industry. Nyx cosmetics and Loreal also provide various varieties of cosmetics ad the latest brands in the market giving them a competitive advantage. Manufacturing and developing quality and affordable cosmetics products that serve all groups of the population will help Wyzant attain a competitive advantage.

PART TWO

COMPANY GOALS

The goal of Wyzant cosmetic company is to be the leading supplier of quality and healthy cosmetics, skincare products, fragrance and deodorants.

To expand the company to other regions globally apart from the United States of America.

To utilize the opportunity in the market and fill the gap established by key competitors such as Mac, NYX, KKW Beauty, and Loreal.

To obtain customers satisfaction through the provision of quality products in the market.

To create loyalty with customers

To obtain a long-term competitive market advantage in the cosmetic industry.

TARGET MARKET

The company’s target market is the population of all ages and gender in the market. Through market research and analysis, the company targets households, students, expectant mothers, tourists, business people, corporate executives, couples who are about to wed, and the general population at large because cosmetics are used by almost everyone.

INDUSTRY

Wyzant cosmetic and fragrance company will provide different kinds of cosmetic products from body care to fragrant. The company utilizes organic food products, fruits., and vegetables. The industry is at its first stage of development. through analysis ad market research on cosmetics and other body care products. The company has found a gap in the quality of products being developed to serve various groups of individuals in the market. The company will utilize this gap to attain a complete competitive advantage in the market and also to maintain its long-term performance (cosmetics market, 2021). The company products will be purely natural and this will attract clients from the region who value the quality rather than price hence ensuring its dominance in the market.

PART THREE

The cosmetic industry has various companies that are producing cosmetics products and each company serve a unique group in the market (BulkInside, 2021). Developing cosmetic products that will serve almost all the groups need will help the company attain a complete competitive advantage. Most of the cosmetic products in the market are specific for example hair lotion cannot be used as a body lotion. Coming up with natural hair products and body lotions that are multipurpose will help solve the problem of unique products for a specific body part. Wyzant cosmetic and fragrance company will create cosmetics that will care for the general skin health and boosting the beauty of the skin for, especially women. The products will help in curing skin rashes and other fungal threats to the skin.

PART FOUR

Product will be priced differently depending on the sizes and how much the consumers of the given product are willing to pay. After analyzing the market prices on different cosmetic products, it is important to maintain a standard price for the cosmetic products. low prices are significant for retailers and whole sellers. From the cost of production, distribution and marketing, Eye shadow is averagely priced at $ 12, this price is similar to most of the cosmetic pioneer companies. Mascara is priced between $8 and $20 depending on the size of the product. Lipstick is averagely priced at $20 and skincare hydration cream is priced at $25.

PART FIVE

Barriers to entry

•High startup costs

The startup cost of the cosmetic industry is very high. This is because the company requires input from various levels to reach the desired target which cosmetic. The company requires the employment of various personnel who need to be paid at the end of the first month whether the company has made a profit or loss. The startup cost also involves the cost of purchase of machinery, furniture s and other essential materials that are required for the smooth running of the company’s operation. Similar to MAC, Loreal, NYX, COVERGIRL, and FENTY BEAUTY, the company requires trained personnel and machinery at their disposal to enable the production process to run smoothly (cosmetic industry, 2021).

•High production costs

The production process of cosmetics involves a complex process that requires a large input of capital to come up with safe and quality cosmetics. There are several stages that make the process expensive. The raw materials used in the production of cosmetics are organic food products, fruits, and vegetables that are fresh from the garden. These products are expensive to purchase especially at the start of the business where no revenue is being generated at the moment. The missing process is the most demanding in the production of cosmetics. It determines the quality of the final product and thus maintaining the performance of the machinery is expensive. The same machinery is implemented in other cosmetic companies such as NYX, COVERGIRL, and FENTY BEAUTY.

•High marketing costs

With increased competition from companies such as MAC, NYX, KKW BEAUTY, KYLIE COSMETICS, FENTY BEAUTY, LOREAL, and COVERGIRL, Wyzant has to spend more on creating awareness to ensure that their target market gets familiar with the product that they are selling in the market. The marketing cost is high because the company utilizes various social media sites such as Facebook, Twitter, Instagram, Ads, and television adverts to reach the consumers. Other marketing strategies such as product promotion through voucher winning when certain products are purchased also increases the marketing costs. The company has to increase its expenditure to ensure that it effectively compete with other cosmetics manufacturing companies in the market.

•Brand recognition challenges

Being its first period of operation in the cosmetic industry, trust is an issue among cosmetic users. Most of the customers tend not to trust products that are new in the market unless recommended by their peers, relatives or family. Wyzant company expects a huge challenge in the purchase of its products during the first period of its operation. The company will focus on quality production and general skincare to gain the clients’ trust and loyalty. The pioneer companies in the cosmetic business also faced the same challenges during their early stages of development and with a quality product, the company is confident that it will reach its full potential.

•Need for specialized technology or patents

Technology is the most crucial aspect of a business. It can either lead to business expansion or its collapse in the market. Globally, automation has increased the productivity process in many companies reducing labour costs. Companies such as NYX, and MAC are making use of the Augmented reality technology in making their cosmetic products. It has also enabled the company to reach clients globally because the companies have websites that enable the easy purchase of products. Through technology, marketing has also been expanded through Ads and short video clips that display the performance of their products. Wyzant has to incorporate technology in its manufacturing process to ensure that it effectively compete and manufacture quality products.

•Unionization in your industry

Unionization of the Wyzant company will help the company in negotiating in case of strikes. Companies such as MAC and NYX can negotiate with their employees in case of strikes. The company have ensured that the employees are treated equally and this enhances fairness among the employees despite the position that one holds. Wyzant requires unionization because the company is at its first stage of development in the market. It requires protection from the strikes because the company needs to develop financially.

PART SIX

Threats and opportunities

•Changes in technology

In the cosmetic industry, technology acts as a major tool in the marketing of products, especially in social media. Technology will allow Wyzant company to reach new economic markets by levelling the playing fields with other cosmetic companies. It will enable it to develop competitive advantages in the economic market by using a different technology from mobile devices to servers, sites and internet advertising such as ads or web banners (e27, 2021). Websites are a low-cost option since consumers can access them all the time when they need to buy products. Therefore, Wyzant can reach regional, national and international markets rather than selling my products only in the local market through technology. The most common way in which products are sold on several different economic websites is through retail websites. The retail websites increase both the market and severe competition from other cosmetic companies using the same website hence posing a threat to the growth of the business.

•Changes in the economy

Change in the economy affects the cosmetic industry. This is because when there is a downturn in the economy, the amount of sales decreases as many consumers find it expensive to buy the products due to an increased price which is a result of an increase in taxes and interest rates imposed by the country on the products. Due to this, cosmetic companies are forced to drop their prices or even clear smaller volumes which would affect the companies negatively. By producing affordable products for the clients during an economic downtown would greatly increase the number of sales. This is because consumers would be looking to cut down on the cost of purchase hence buying more of Wyzant products thereby maximizing profits. This can be done by taking a step towards manufacturing green eco-friendly cosmetics that are healthier for both the environment and the human body.

•Changes in your industry

Change in the industry may include increased competition from the cosmetic companies that have competitive advantages such as LOREAL and FENTY BEAUTY since more customers tend to trust their products than those that are new to the market. To counter this problem, Wyzant will have to develop more competitive advantages and make customers believe in its products. Also change in customer needs and preferences caused by economic, social and cultural change, change in quality to cut down prices. The social, economic and cultural change affects the needs and preferences of the customer (Pharmafranchisehelp.com, 2021). Therefore, adjusting Wyzant products to meet the needs of the consumers would greatly increase the sales of the company. Customers’ expectations are also likely to change because of the experiences they had with other companies such as LOREAL and COVERGIRL. This is because if one cosmetic company improves, customers tend to expect it from all cosmetic companies.

The company targets both consumers and retailers in the cosmetic industry.

consumers

age The company targets population of all age groups

Gender Male, female, bisexual, and transgender

Income 500 – 2,000

2,000 – 5,000

5,000 – 15,000

15,000 and above

Location The company targets the local population because it is at its first stage of development.

Occupation Students, tourists, expectant mothers, bachelors, and about to wed couples

Education level The company targets all education levels

For business

Industry The company targets industries that manufacture fertilizers

Location Local retailers and industries in the region.

Size The company targets small, medium and large companies

Stage in business The company targets mature and companies that are growing for easy finance generation.

Annual sales $8,000,000 – $20, 000, 000

PART SEVEN: Key competitors

The cosmetic industry has several companies that have been in existence for some time now. The companies include MAC, NYX, KKW BEAUTY, KYLIE COSMETICS, FENTY BEAUTY, LOREAL, and COVERGIRL. They pose threat to skin and sun care products, deodorants and fragrances, makeup and colour cosmetics. NYX company is a US-based cosmetic company that majors in the manufacturing of makeups. The company manufactures quality makeups that are trusted by most makeup users. The major products are soft matte lip cream, micro brow pencil, and BB cream. The competition posed by NYX is both locally and globally. MAC company is a Canadian cosmetic company that has expanded its network globally. The company headquarters is located in New York. The major products manufactured by the Mac are for celebrities and other fists class individuals. The company major products are Mac studio foundation, Skin finish highlighter, and Mac lipstick.

KYLIE COSMETICS is an American cosmetic industry that manufactures cosmetics and beauty products such as lipsticks, skin concealer, and a lip kit. KKW BEAUTY is a manufacture and online retailer of makeups, lipsticks and shimmer. FENTY BEAUTY is a US-based cosmetic company that offer a variety of skin products. Their top products are eye brightener, shiny hydrating lipsticks, and mascara. LOREAL company is a French company based in Clichy. The company manufactures makeup, hair care, skin care and anti-ageing products. face primer, foundation, and setting powder. COVERGIRL is S based company whose headquarter in Mary land and they pose local competition to Wyzant. The company manufactures eye makeup, lipsticks, and makeup tools.

Wyzant company requires a brand image that displays the company majoring in the development of quality products that are environmentally friendly and fully satisfy the requirement of the clients. The image should portray the company as a reliable source of quality products.

PART EIGHT-Pricing

The pricing of makeup products in the market varies with the type of company. Most of the companies have an average price in the market while others have cheaper prices. Wyzant cosmetics plans to have an average price that is similar to most of the cosmetics companies. The main reason behind sales is not on lowering prices on the market but on delivering quality products. foundation price is averaged priced $25 in the market. The difference in price margin of this product when compared to other companies ranges between $1 and $2. Eye shadow is averagely priced at $ 12, this price is similar to most of the cosmetic pioneer companies. Mascara is priced between $8 and $20 depending on the size of the product. Lipstick is averagely priced at $20 and skincare hydration cream is priced at $25. These prices are average and similar to most of the cosmetic industries.

PART NINE

Legal environment

Wyzant company is prepared to follow all the rules and regulation of the USA government such as paying taxes, which include the tax generated from the sales of the makeup products and the employee income tax. The business will require licenses and permits for it to be fully operational. Furthermore, the business will be registered on an active insurance company. The insurance will cover the medical, stock and equipment of the company. The medical insurance costs $500,000, equipment insurance costs $5,000,000 Other responsibilities of the business involve corporate responsibility, proper waste disposal since the US government is strict on environmental care. The regulations of the employees involve their working hours, insurance and leave in case of sickness and other emergency issues. The company is in the process of registering the trademark for Wyzant before it is fully operational.

PART TEN: Inventory

Wyzant company is in its first stage of development and the company will require inventory to keep tracks of the finished products in the store. The average value of the inventory is $20,000 and this is less than most of the average companies in the market such as NYX and MAX, KKW beauty and loreal. The lead time of the inventory is two weeks. The expected rate of inventory turnover is 1 week because the company is still developing.

References

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