Consideration (Brief Summary) of Differentiating Strategy of General Products Stores (A company) in Japanese Cosmetics Industry

~From Perspective of Working Women~No.3/3

3. About Shift of the market and macro environment
3-1 Annual shipment value in cosmetics industry (The graph is omitted)
3-2 Current State of politics and economics (Description is omitted.)
Economic change such as the introduction of consumption tax
3-3 The analysis of the environment in cosmetic market.
About needs of consumers
3-4 Current status and summary
As you can see, this industry hasn’t been affected much even though consumers are tend to be negative because of the economic circumstances and anxiety of higher tax.
Women tend to increasingly participate in society. Seeking “beauty” for career-oriented women will be improved.
In the future, it will stably increase not affected by the economy.

4. Future differentiating strategy on general products stores ~ Case study.
4-1 What is Tate Style Business Model?
Normally, Business model equals structure of business.
However, Structure of profit making capability is the Tate Style Business Model.
Competence is development capacity, internal know-how (learning experience), brand, business right, patent right, property in a prime location and investment in product capacity as a pioneer.

Strategy
□ Cost leadership - purpose to achieve cost lower than competitors.
□ Differentiation - Purpose to create something that is very unique among the companies in the same industry.
□ Concentration - purpose to combine with cost leadership or differentiation by limiting area or categories of products.
□ Homogenization - purpose to imitate competitors.

4-2 Business model of A company
Let me introduce a discount cosmetic store, A company as a case study.
The head office of A company is located in Tokyo, and they expand their shops in Sapporo, Kyoto, Osaka, Kobe Fukuoka and Sakae in Nagoya.
I shop at this store from a few years ago, and consumer can purchase cheaply.

4-3 Differentiated and progressed business model
I will explain a progressed future model. (Business model is omitted.)
I will also introduce A company that is differentiated with high valued business system of cosmetic products from customers point of view. (The business system omitted)

5. Problems and future
Although we hear news of recession everyday, cosmetics industry keeps its scale of market.

As I told you, the scale of market hasn’t been changed. However, on the site of distribution has been changed, and major stores of cosmetic products are moved to drugstores or retail stores from cosmetic stores directly managed by manufacturer or department stores.
Growth of market started slowing down, and competition among the manufacturer are increased. In such consequences, various manufacturers started paying attention to improvement of efficiency in distribution process by IT.
Each manufacture focuses on an Internet business because mail-order businesses via the Internet are expected to increase.
Marketing strategy considered entering foreign market
In China, the main channels of Japanese and foreign enterprises are department stores. However, Japanese companies diversify abroad and open supermarkets and convenience stores.
The key is a unique products development of cosmetic manufacturers “who know the skin and needs of Asian well”
There are also many issues, such as the government regulation and copy products. Training of sellers is one of the big problems.
Anti-Japanese feeling is also a problem which cannot be ignored.

Our society has the low birth rate and the tendency to marry late. Working women tend to have needs to buy selected and stabilized cosmetic products from their experiences in cheaper and efficient way.
Demands of the business style as A company which have made it possible to get items cheap and quick in a limited times like the way going home will be increased.


6. Conclusion
For all readers, thank you very much for reading. I omitted graphs, numbers, and a progressed business model on purpose. Therefore, there might be some points that you did not understand. However, we already have completed the document includes the graphical content.
Also, I put “Case Study-1” on our website as complementary of this blog.
The business of website has been matured in Japan. Regarding businesses in Taiwan, we would like to increase sales and customers by differentiating information of websites.
That’s the business plan which we aim to.


October, 15th 2009
Tate Business Consulting
Takashi Tate