(Tiểu luận) strategy management nature story cosmetics company limited cocoon

Core values Cocoon is proud to be a cosmetic brand 100% made in Vietnam The quality and practical effectiveness of the products are the key points to help Cocoonstrengthen its position

HO CHI MINH CITY OPEN UNIVERSITY SCHOOL OF ADVANCED STUDY

- -STRATEGY MANAGEMENT NATURE STORY COSMETICS COMPANY LIMITED -

Lê Thụy Thiên Ý 2054012395

Table of Contents

1 OVERVIEW OF NATURE STORY CO., LTD 3

Vision 3

Mission 3

Target 3

Core values 3

2 Macro (PESTEL) 4

Political and Legal 4

Economic 5

Social 7

Technology 8

Environment 9

3 MICRO 9

Threat of new entrants 9

a) Industry attractiveness 9

b) Barriers to entry into the industry 9

Customers 10

Suppliers 10

Competitors 11

a) Domestic competitors 11

b) Foreign competitors 11

Substitute Product 12

4 CPM MATRIX 12

Conclusion of CPM Matrix 13

5 EFE MATRIX: 13

Conclusion of EFE Matrix 15

6 Value Chain Analysis 16

Inbound Logistics 16

Outbound Logistics 16

Operation 16

Marketing & Sales 17

Service 18

7 IFE MATRIX 18

Conclusion of IFE Matrix 19

8 SWOT MATRIX 20

Conclusion of SWOT Matrix 21

9 QSP Matrix 22

10 Strategy and Timeline 24

STRATEGIC MANAGEMENT OF

NATURE STORY CO., LTD - COCOON

1 OVERVIEW OF NATURE STORY CO., LTD

Vision

Cocoon is the "home" to take care of the skin and hair of Vietnamese people, helping thembecome more beautiful, perfect and shine in their own way Cocoon was born to beautifyVietnamese people from close and familiar ingredients

With the progress of society, people tend to seek plant-based foods to protect their health Along with this mindset, vegan cosmetics also began to become a favorite trend of manypeople following a green lifestyle That is the reason why Cocoon researches and constantlylaunches 100% vegan cosmetic products that keep all the nutrients of Vietnamese plants, safe,benign, do not use ingredients from animals and say no to animal testing

Mission

We were born to give you a healthy, youthful and vibrant skin and hair from simple and closeingredients that you eat every day We always keep one mission in mind: applying thebenefits of food around us combined with scientific understanding to create cosmeticproducts that are safe and effective for everyone

Core values

Cocoon is proud to be a cosmetic brand 100% made in Vietnam

The quality and practical effectiveness of the products are the key points to help Cocoonstrengthen its position in the hearts of consumers Each product launched is a long process of

understanding the problems that Vietnamese skin and hair have, combined with science andtechnology to bring products that best suit the characteristics of Vietnamese skin .

Moreover, in the overall picture of Vietnamese cosmetics, Cocoon is also known as a brandthat positively inspires users, when they always choose a development path based on thesustainability of the ecosystem respecting the life of all species and associated withenvironmental protection activities, preserving the earth's green color with many meaningfulprograms

Cocoon's commitment to 100% ingredients of clear origin and safe for the skin: Allingredients in Cocoon's products have documents proving the origin of ingredients fromdomestic suppliers and abroad The products are formulated without ingredients such asalcohol, parabens, formaldehyde, phthalates,

100% vegan: Cocoon does not use ingredients derived from animals commonly found incosmetics such as: honey, beeswax, wool fat, sheep placenta, etc Instead, the companyapplies and develops it Maximize the ability of active ingredients, plant extracts without thesupport of materials of animal origin

100% never tested on animals: Cocoon cosmetic formulations are researched and tested usinglaboratory tests (in-Vitro test) or on volunteers (in-Vitro test) Cocoon does not perform tests

on animals such as rabbits, mice, fertilized egg yolks, …

2 Macro (PESTEL)

Political and Legal

The state manages cosmetic companies through the promulgation of laws, decrees, circulars,and provisions to help Vietnam's cosmetics industry avoid the risks of affecting the reputationand quality of products that cause harm threat to the environment and human health.For the state, the law related to cosmetics as a tool and means to manage businesses, helps thecosmetics industry to be more stable For businesses, the law protects rights and obligations.Therefore, businesses need to take and comply seriously and take full responsibility for theiractions If done well, the business will receive its inherent benefits On the contrary, ifviolating the law, the enterprise will have to pay a fine Businesses need to pay great attention

to this issue

Transnational organization:

- TPP (Trans-Pacific Partnership) : 4/2/2016 Vietnam signed TPP: widely liberalized ingoods, import tax is completely eliminated

- 28 years of joining ASEAN

=> FDI increased, creating conditions to open a large market for the company's production toexport abroad, as well as opening up economic cooperation with many other countries Theprovisions of TPP include taxes, customs procedures, and good protection of intellectual

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property These advantages mean that goods from other developed countries are easier toimport and more attractive to foreign consumers As a result, if foreign products flood theVietnamese market, it will create a significant challenge that requires us to innovate, improveour products continuously and improve our competitiveness On the other hand, this is also anopportunity for market penetration, easy to export to foreign countries Cocoon successfullycooperated with Guardian Malaysia on August 8, 2023, initially exploring the world, bringingvegan beauty products from Vietnamese agricultural sources to friends around the world.

The state promulgates strict regulations and

Economic integration brings exportopportunities to foreign countries

Economic

In recent years, Vietnam's GDP growth rate has almost always been at a high rate of over5%/year (except in 2020) because of Covid-19, with this economic growth rate, we can seethat Vietnam is in a difficult period period of continuous development and if the economicsituation continues to be positive in the future, it will help Vietnam develop even morestrongly

Source: Dựa theo số liệu thống kê của IMF Việt Nam

Besides, the data collected per capita of Vietnam also increases year by year (in 2022Vietnam's per capita income is $4163/year), it shows that people's living standard is graduallyimproving improving and improving Since then, the interest and demand for Vietnamesepeople's life has increased.

Source: Dựa theo số liệu thống kê của IMF Việt Nam

According to Business International (BMI), the cosmetics and beauty industry in Vietnam ismaintaining a compound annual growth rate of 10.9% for the period 2014-2022, thanks toimproved income and Product consumption trends changing positively, making it full ofpotential in the future This sector has maintained good growth along with a positive GDPgrowth rate in the period 2014-2022 Data from the General Statistics Office in recent yearsshow that when the economic growth rate remains at 6-7%, the beauty industry will have ahigh growth rate Therefore, market attractiveness will be a contributing factor in drivingcustomer interest in the business

However, the Covid-19 epidemic has negatively impacted the economy of the whole world,not just Vietnam (most clearly in 2021) The pandemic greatly affects people's shoppingdecisions The recent Russian-Ukrainian war has also largely affected the economy.Consumer confidence declines with inadequate financing, leading to more careful savingsand spending, set aside for a contingencies Therefore, purchasing power of non-essentialitems (cosmetics) decreased significantly The economy in 2023 is still affected by the Covidpandemic and inflation, the cosmetics industry is facing significant risks and challenges.Therefore, businesses need to prevent the impact of bad risks from the outside and calculatethe most reasonable costs to reduce the cost of increasing quality

Threats Opportunities

The impact of the Covid epidemic reduces the

Social

The growing demand for beauty products spurs the development of the cosmetics industry.Due to increasing awareness of the importance of skin care and skin protection 93% ofwomen aged 25-32 use basic skin care products regularly Not only women's beauty needsbut also a number of men buy skin care products

Source: Q&Me

Green consumer culture is becoming more and more popular today Due to the awareness ofthe importance of environmental protection, the psychology of using environmentallyfriendly consumer goods has become more popular in people's lives.

Consumers around the world, especially Asian consumers, prefer products with organicingredients or natural extracts because safety is one of the most important and top prioritieswhen buying any skin care or beauty product

Consumers are encouraged to use products that do not contain substances harmful to the skin,especially beauty and health care cosmetics with organic and natural quality ingredients.Grasping the Vietnamese mentality, Cocoon cherishes ingredients close to Vietnamese life,Cocoon has researched and developed a vegan product line and is having a very potentialmarket In addition, Cocoon always keeps up with the latest global formula and ingredienttrends to further perfect its products

OpportunitiesThe number of consumers of green cosmetics is increasing

Technology

Currently, when the technology era is increasing and developing, consumers access theinternet every day a lot Currently, the beauty industry is almost "attached" to technologyapplications Since the outbreak of the COVID-19 pandemic, businesses have graduallyswitched to applying technology to almost all production, customer care, producttransportation, etc This helps businesses save time, labor and errors are easier to control thanbefore At the same time, with new technologies, it is possible to create products that aredifferent from other enterprises' products on the market Developed technology helps Cocooncreate more unique products than competitors in the same industry

However, the rapid development of technology means that businesses need to pay a high costfor owning technology to use This is a big barrier for small businesses that want to applytechnology to the cosmetics industry, which will be more vulnerable than large enterpriseswith strong financial resources The cost of using technology is high, which is a burden forbusinesses without strong financial resources

Environment

Vietnam is a country with advantages in agriculture, abundant natural materials (coffee,avocado, cocoa, ) Vietnam's climate is located in the humid tropical monsoon region, theterrain is mostly hilly and basalt red soil, creating favorable conditions for cultivation andcreating high-quality and affordable raw materials

Today's technological inventions are

The terrain connecting provinces and cities in the country by road, sea and air are all welldeveloped Create favorable conditions for the transportation of products and materials fromthe place of production to the factory of COCOON In addition, the process of operating anddistributing products to all provinces and cities across the country is also faster thanks to thedeveloped transport network.

Besides, there are still existing difficulties when Vietnam has to go through storms, floods,landslides Causes a lot of damage to farmers and also affects the process of supplying rawmaterials and creating products

The natural environment facilitates the

foreign enterprises enter the market From this, one can conclude that the potential

competitor's risk of entering the industry is high

b) Barriers to entry into the industry

Although vegan cosmetics is not a new concept, it has recently become a trend and especiallycaused a fever among Gen Z customers - young people who are highly aware of health andenvironmental issues Therefore, customer loyalty will be measured by the quality and valuethat the brand brings And this will be a big barrier to customer retention

With advanced technology, Cocoon still retains the typical natural features of Vietnam in eachproduct, making customers feel more familiar However, the requirements to meet thestandards of safe natural cosmetics are quite high through rigorous testing Therefore, this isalso an opportunity to affirm the pride of "high-quality Vietnamese goods" and will be acertain barrier when potential competitors want to penetrate

Certain barriers exist when new entrants

want to enter the industry High risk of entering the industry bypotential competitors due to attractive

incentives and market expansion

The brand's client is quite diverse Cocoon's target audience is Women, aged 18-35, whochoose to consume benign natural products They come to Cocoon because of effectiveproducts and impressive humane messages about animal protection (not tested on animals).After Covid, nature gradually recovered and touched human consciousness E-commerce andsocial networks, trends, care services also develop to attract more young people This is alsothe segment that Cocoon wants to target As a result, Cocoon is increasingly expanding thecustomer segment in more age groups

Once there is a foothold in the market, there are also many potential competitors appearing.Because the ingredients to create natural cosmetics are easy to find, many suppliers andbrands begin to sell cheap but not guaranteed Or customers can also handmade cosmeticssuch as coconut oil, It can be concluded that the ability to convert products, or the ability

of buyers to dominate the industry is quite high Besides, the uneven competition amongbrands negatively affects customers They will be more hesitant to choose products when thebrand has too much marketing but does not care about product quality

The customer segment is increasingly

expanding in terms of age

Customers can easily switch brands (brandswitching)

Suppliers

The most important natural cosmetics are quality and packaging First of all, let's talk aboutquality Cocoon takes advantage of available ingredients that are extremely popular inVietnam such as squash, Cao Bang rose, Dak Lak coffee, Ben Tre coconut oil, purchaseddirectly from the locality Regarding packaging, Cocoon uses paper packaging, no plasticlamination, and bottles for recyclable products These materials have many suppliers inVietnam Therefore, the supplier's ability to influence the company is not high

OpportunitiesDue to the large number of raw material suppliers, the company has many choices

Competitors

In marketplaces, Cocoon’s marketers must be aware of both direct and indirect competitors’advantages in creating relationships and gaining attention from the same target audiences

a) Domestic competitors

There are several brands also from Vietnam such as Thorakao, Cỏ mềm, BareSoul, thatproduce similar products as Cocoon However, Cocoon is the first Vietnamese brand toproudly receive ELLE's prize ‘Made in Vietnam product of the year' with Dak Lak coffeebody polish Thorakao is a 60-year-old brand, Cỏ mềm Homelab has a lot of cheap skincareproducts While Cocoon is only 5 years old This actively demonstrates that Cocoon is a fast-growing and potential beauty brand Compared to Sao Thai Duong and Cỏ mềm Homelab,Cocoon's packaging is more eco-friendly

b) Foreign competitors

Even when Cocoon is getting flavoured by customers, this small brand from Vietnam hasmany great foreign competitors such as Innisfree, The body shop, etc which are long-standingand big companies They are all multi-brand companies, have various categories of products,and have entered the beauty marketplace for years Cocoon's weakness is that it is a smallcompany in Viet Nam and not more famous or feel luxurious than others

Here are 3 typical cosmetic brands for the natural cosmetics industry:

Famous British cosmetic

brand

Provide skin care product

lines with many different

objects

The packaging is not too

picky but clear and natural

packagingBelongs to the popularsegment in Korea

The cosmetic brand is quitefamous and safe in VietnamProvide hair care cosmeticsfor women, pregnantwomen, people withsensitive skin,

The packaging shows thecolors of the Vietnamesecountryside

Reasonable price, cheap

ThreatsFamous foreign brands account for the majority of the market share of the cosmetics

industry

Substitute Product

In Vietnam, spas which have been more popular in recent years, provide different productsand services but still satisfy customers’ desires At a spa, customers have paid for services to

take care of their skin ( like lazer, filler, mesotherapy, ) , therefore, they will not buyskincare products

Besides, Cocoon also has products for hair growth which are extracted from pomelo Độ lànhtính của nó cao hơn và chất lượng duy trì lâu dài hơn To wait for the result, customers must

be patient in using the products for months to grow hair Instead of this method, some peoplewould like to do hair extensions at hair salons where they can have their long hair within aday

Natural cosmetics are more benign than

More popular substitutes

4 CPM MATRIX

In the analysis of 3 brands competing with Cocoon, we compare Cocoon with The bodyShop, Innisfree, BareSoul In which, The Body Shop & Innisfree is a foreign enterprise,Cocoon & BareSoul is a domestic enterprise

It can be seen that The Body Shop and Innisfree are the two leading cosmetic brands in theindustry in the Vietnamese market because of their long-standing strengths, quality and highbrand awareness However, these two businesses are considered as "foreign birth" productlines for most Vietnamese consumers in general or the student segment in particular This isthe competitive strength of Cocoon and BareSoul because of the pure natural ingredientsavailable in the country and affordable prices, suitable for the pocket of Vietnamese.

It can be seen that CoCoon is the 3rd cosmetic with a score of (2.8) Although it is a brandthat appeared after the two big brothers, The Body Shop and Innisfree, with the strength ofthe vegan Vietnamese brand, Cocoon gradually asserted its position in the domestic market.Same as natural cosmetics, but Cocoon is more dominant than BareSoul (Total Cocoon 2.8:BareSoul 2.5) because of its more diversity and focus on product appearance, taking care ofeach value that Cocoon brings to customers

With inherent strengths, Cocoon should focus on developing new products to increaseproduct diversity, promote advertising strategies, develop vegan product quality, and keep amid-range price strategy compared to the market to be able to reach more potential domesticcustomers However, Cocoon has not yet developed the R&D segment, so the company needs

to find suitable strategies to gain strength in product research and development

5 EFE MATRIX:

EFE MATRIX