Estee Lauder Inc.,-2011
Nazifa Ghanivisibility
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AI-generated Abstract
Estee Lauder Inc. operates in the personal care industry with a commitment to high ethical standards and the best practices in product quality and customer service. The company focuses on strategic initiatives to reduce environmental impact, improve human capital, and enhance customer satisfaction, particularly targeting high-end anti-aging markets in emerging economies such as Brazil, China, and India. A strategic plan emphasizes continuous improvement in operations, innovation, and fostering customer loyalty through proactive engagement and quality-centric approaches.
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Estee Lauder Companies, Inc. – 2011
Prepared for: Design Strategic Plan
Assoc. Prof. Dr. Mas Bambang Baroto
Prepared by:
Nazifa Ghani (MR111037)
Estee Lauder Companies, Inc. – 2011
Table of Contents
1.0
Company Profile ............................................................................................................................................................................................................................. 5
2.0
Description of Industry (The Industry Chosen) .............................................................................................................................................................................. 7
3.0 External Assessment ............................................................................................................................................................................................................................ 8
3.1 Positioning Diagram Strategic Group Identification ........................................................................................................................................................................ 8
3.2 The Group Map .............................................................................................................................................................................................................................. 10
3.3 PEST Analysis .................................................................................................................................................................................................................................. 11
3.4 Competitive Analysis ...................................................................................................................................................................................................................... 15
3.5 Opportunities & Threats ................................................................................................................................................................................................................ 22
3.6 EFE matrix ...................................................................................................................................................................................................................................... 25
4.0 Internal Assessment ........................................................................................................................................................................................................................... 26
4.1. Strengths & weaknesses ............................................................................................................................................................................................................... 26
4.2 IFE Matrix ....................................................................................................................................................................................................................................... 28
4.3 Value Chain Analysis (Skin Care Segment) ..................................................................................................................................................................................... 29
4.4 Value Chain Flow Chart (Skin Care Segment)................................................................................................................................................................................. 31
5.0
Strategy Formulation ................................................................................................................................................................................................................... 32
5.1 IE Matrix ........................................................................................................................................................................................................................................ 32
5.1
SWOT Matrix ............................................................................................................................................................................................................................ 33
5.1. SWOT Matrix ................................................................................................................................................................................................................................. 34
Strategy Formulation Conclusion ......................................................................................................................................................................................................... 36
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
6.0 CLS,BLS- Strategy Maps Diagram ...................................................................................................................................................................................................... 37
7.0 Operation Management Process (OMP) ........................................................................................................................................................................................... 39
7.1 The Theme of OMP: ....................................................................................................................................................................................................................... 39
7.1.1 Define the objectives in Supply Processes .............................................................................................................................................................................. 40
7.1.2 Define the objectives in Production Processes ..................................................................................................................................................................... 46
7.1.3 Define the objectives in Distribution Processes...................................................................................................................................................................... 52
7.1.4 Define the objectives in Risk Management Process ............................................................................................................................................................... 57
8.0 Customer Management Process (CMP) ............................................................................................................................................................................................ 75
8.1 The Theme of CMP: ........................................................................................................................................................................................................................ 75
8.2 Customer Selection Process .......................................................................................................................................................................................................... 75
8.3 Customer Acquisition Process ....................................................................................................................................................................................................... 80
8.4 Customer Retention Process ......................................................................................................................................................................................................... 85
8.5 Customer Growth Process............................................................................................................................................................................................................ 89
9.0 Innovation Process (IP) ...................................................................................................................................................................................................................... 99
9.1 The Theme of IP: ............................................................................................................................................................................................................................ 99
9.1.1 Identify the Opportunities .................................................................................................................................................................................................... 100
9.1.2 Manage the Portfolio ........................................................................................................................................................................................................... 103
9.1.3 Design and Develop............................................................................................................................................................................................................... 106
9.1.4 Launch ................................................................................................................................................................................................................................... 109
10.0 Regulatory and social process ....................................................................................................................................................................................................... 114
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
10.1 The Theme of Regulatory and social process: ........................................................................................................................................................................... 114
10.1.1 Environmental practices ..................................................................................................................................................................................................... 115
10.1.2 Safety and Health practices ................................................................................................................................................................................................. 118
10.1.3 Employment Perspective .................................................................................................................................................................................................... 121
10.1.4 Community Perspective ...................................................................................................................................................................................................... 124
Strategy map: ................................................................................................................................................................................................................................. 128
Strategy map with all linkages: ...................................................................................................................................................................................................... 129
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
1.0 Company Profile
Founder
Division
Mrs. Estee Lauder and her husband Joseph Lauder, Founded in 1946
Personel Care Industry
Skin Care segment
Makeup segment
Fragrance segment
Hair Care segment
Estee Lauder Inc. is one of the world’s leading manufacturer composed of
four divisions: 1) Skin Care 2) Makeup 3) Fragrance and 4) Hair care
Estee Lauder brands include:
Estee Lauder, Aveda, Bobbi Brown, Bumble and Bumble, Clinique, Donald Trump,
Flirt! Good Skin, Grassroots, Jo Malone, La Mer , Michael Kors, Missoni, Sean John,
Stila, Tommy Hilfiger, Tom Ford, Prescriptive, lab series skincare for Men, Origins, M.A.C,
Kiton, Darphin. Rodan+Fields, Daisy Fuentes and SmashBox.
The company's products are sold in over 150 countries across the world.
Estee Lauder is a licensee of several brands and markets its cosmetics and
other products under these brand names as well.
Sales revenue
Sales revenue by division
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Design Strategic Plan /SEM II/ 2012/2013
2008
$
(million)
7,9108
2,996.8
2009
$
(million)
7,331.9
2,886.0
2010
$
(million)
7,811.5
3,227.1
Skin Care
Estee Lauder Companies, Inc. – 2011
3,000.4
1,432.0
427.1
2,830.9
1,150.9
402.4
2,978.2
1,1369
413.9
54.5
61.7
55.4
Make Up
Fragrance
Hair Care
Other
Mission statement:
Estee Lauder does not have a written mission statement
Mission & vision
Vision statement: “Bringing the best to everyone we touch and being the
best in everything we do. By “the best” we mean the best products, the best
people and the best ideas.”
Furthermore the company is committed to uncompromised ethics and integrity.
For all employees domestically and globally, and the board of directors, the
highest standards of ethics is a condition of employment. The full official
homepage elaborates by stating the following:
“The Estee Lauder Companies, Inc. is committed to the highest standard of
profesional and personel conduct. All employees of the company are expected to
conduct themselves at all times within the letter and spirit of the Code…..” A full
description of the code can be found at http://www.elcompaies .com/pdfs/codeof-conduct-2010.pdf.
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
2.0 Description of Industry (The Industry Chosen)
Name of the industry
Industry Market Cap
Industry Net Income
Main competitors in
the industry
Industry products
and services
7
Skin Care Industry
1. Estee Lauder
2. Procter & Gamble (P&G)
3. L’Oreal
4. Avon
5. Revlon
Estee Lauder: Skincare (moisturizers, creams, lotions, cleansers, sunscreens, and self tanning
products)
Clinique, Repairwear Laser Focus, Estee Lauder Advanced Night Repair Eye Recovery Complex, La Mer
Regenerating Serum and Origins Plantscription;
Procter & Gamble (P&G): Olay
L’Oreal: L’Oreal Paris, L’Oreal Profesional, Lancôme, Maybelline New York, Garnier
Avon: Avon Color, Anew, Skin-So-Soft, Avon Solutions, Advance Techniques, Avon Natural, Mark and
Avon Wellness.
Revlon : Offers variety of cosmetic and beauty products under may brands.
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
3.0 External Assessment
3.1 Positioning Diagram Strategic Group Identification
*Because of lack of information on Skin Care product segment this analysis will be based on personel care industry . This evaluation also
will be based on major competitors in the industry due to the limitation of information given.
Case facts of X axis - Number of Operation in different countries
L’Oreal distributes products in 130 countries (Page37,para5)
P& G distribution of consumer products in 140 countries (Page37,para6)
Avon market its products in over 100 countries through over 5 million independent sales representatives (Page38,para2)
Today Estee Lauder has 28 brands, sell products in over 150 countries (Page30, para5)
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Case facts of Y axis – The Latest Revenue achieved by the company – 2010 (million)
Revenue achieved by Avon Company (2010) = $10,862.8 (Refer Exhibit 7, page38)
Revenue achieved by Estee Lauder (2010) = $7,795.8 (Refer Exhibit 7, page38)
Revenue achieved by P&G Company (2010) = $78,938.0 (Refer Exhibit 7, page38)
Revenue achieved by L’Oreal Company (2010) = $ 34,166.38 (Refer Exhibit 7, page38)
Note that Estee Lauder is small compared to some of its rival firms (Page37,para4).
Size of circle – Company Net Income (2010)
Net Income achieved by Avon Company (2010) = $606.30 (Refer Exhibit 7, page38)
Net Income achieved by Estee Lauder (2010) = $478.3 (Refer Exhibit 7, page38)
Net Income achieved by P&G Company (2010) = $12,736.0 (Refer Exhibit 7, page38)
Net Income achieved by L’Oreal Company (2010) = $ 3925.01 (Refer Exhibit 7, page38)
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
3.2 The Group Map
Personal Care Industry Strategy Group Map
High
P&G
The latest Revenue achieved
by the company (2010)
LOREAL
Avon
(100)
EL
Low
Low
50
100
150
High
No. of operation in different countries
Based on information given, it can be concluded that P&G, L’Oreal, Avon are the closest competitors for Estee Lauder in the personal care industry.
Need to take note that Colgate-Palmolive also is one of the closest competitors in the industry. But due to the lack of information given in the case
study, the position of Colgate-Palmolive in the industry could not be illustrated here. In terms of financial position, Estee Lauder Company seems a bit
10
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
behind compared to its major competitors. Nevertheless, Estee Lauder successfully achieved the highest number of operation in different countries
compared to the other rivals. In fact, EL must be sensitive to its nearest competitors strategies in order to ensure its success in the industry.
3.3 PEST Analysis
Case Facts
Opportunity
Threat
Political, Legal , and governmental forces
The impact that rising energy prices can inflict on the personel care sector
(Page36,para7)
The Federal Food and Drug Administration does not require testing of
cosmetics (Page37,para3)
Economic forces
U.S stock market dropped more than 1,000 points in the 10 days prior to
the company’s August 15, 2011 release (Page29, Para3).
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
During 2010, the value of the U.S dollar relative to the international
currencies was volatile, which impacts companies with international
operations (Page36, Para4).
Although economic conditions have improved from 2009, the United
States still is suffering from high unemployment, which has translated
into increase levels of jobs insecurity among the working population
(Page36,para6).
Social , Cultural , and Demographic forces
Demand for premium goods and services in the U.S is expected to rise 8
percent this year (Page29, Para2)
Much of the expected growth in the personel products industry will be
fueled by the rising demand from emerging and developing markets
(Page36, Para4).
Beauty, youth and “forever young” are common themes in the personel
products industry (Page29, Para4).
Turkey is a fast-growing emerging market in the European region
(Page29, Para2).
12
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Developing markets such as Brazil and India are showing signs of
potential gains (Page 33, Para2).
The whole continent of Africa is coming online (Page36, Para4)
Consumers spending may be down in many parts of the world (Page36,,
Para5).
By 2015, global women’s purchasing power is expected to increase by $5
trillion and beauty is the category these consumers are most likely to
spend money on after food and clothing (Page36, para5)
The U.S Cencus Bureau predicts that by the year 2030, Americans over
the age of 65 will represent one-fifth of the population, which is expected
to devote a substantial part of their discretionary income to anti-aging
products…teens are thinking about and spending money on these types of
products (Page36,para5)
The world’s aging population will multiple by 2.5 times in the next
40year….including high growth countries such as China and India
(Page36,para5)
Green products appear to be maintaining their position. With the personel
care sector experiencing an increase in the number of green products
(Page36,para8).
13
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
There have been consumer complaints and inquires into the use of
animal testing for new products (Page37,para2)
Companies are now focusing on the untapped male market
(Page37,para4)
All of the top competitors in the personel products are diversified, with
many brand names and wide range of products (Page37,para4)
Technological forces
Innovation in product development will also remain an extremely
important factor in the industry (Page37,para2)
Total
14
6
Conclusion:
From the above PEST analysis, shows the presence of many opportunities occurred from Political, economic, social as well as Technology point of
view. In order to stay success in this industry, Estee Lauder should grab all the opportunities revealed and since threat cannot be controlled, the
company who want to invest in this industry really need to be aware of the threats in order to continuously sustain in the industry. As a matter of fact,
Estee Lauder company cannot avoid from facing this threat but it can control to reduce the threat.
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
3.4 Competitive Analysis
*Because of lack of information on Skin Care segment’s competitors, the competitive analysis focused on the evaluation based on personal care
industry as a whole.
Key Variables
Competitors
strength
Case Facts
L’Oreal is one of the worldwide leaders in cosmetics
and with 17 global brands, 66,619 employees and
offices in 58 countries (Page37,para5).
Opportunity Threat
√
L’Oreal
Consistently pursued globalization, with over 127,000
employees working in over 80 countries offices
(Page37,para6)
Procter & Gamble (P&G)
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Design Strategic Plan /SEM II/ 2012/2013
√
Estee Lauder Companies, Inc. – 2011
√
Marked its 200th year in 2006, markets a variety of
products in the oral, personel and home care segments
(Page37,para7).
Colgate-Palmolive
√
Avon as the world largest direct seller of personal
products (Page38,para2).
Avon
Revlon is one of the best known brand names in the
world and the company excels at mass marketing
(Page38,para3)
√
Revlon
Competitors
Weakness
16
N/A
Design Strategic Plan /SEM II/ 2012/2013
N/A
-
-
Estee Lauder Companies, Inc. – 2011
Competitors
objective and
strategy
L’Oreal
They embrace responsibility for their employees,
consumers, environment and the communities in which
they operate and though production and technology
strive for consistent quality worldwide, workplace
safety, high environmental standards, localization and
innovation (Page37,para5)
√
√
The most diversified with a greater depth of product
lines, P&G continues to show strong growth and
profitability (Page 37,para6)
Procter & Gamble (P&G)
In 2004, the company initiated a massive restructuring
program that appears to be progressing on schedule
(Page38,para1)
Colgate-Palmolive
Competitors
Capabilities
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Design Strategic Plan /SEM II/ 2012/2013
L’Oreal owns many brands of consumers products,
√
Estee Lauder Companies, Inc. – 2011
L’Oreal
Procter & Gamble (P&G)
Colgate-Palmolive
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Design Strategic Plan /SEM II/ 2012/2013
profesional products, and luxury products, Garnier,
L’Oreal Paris, and Maybelline New York are all
consumers products…Luxury products are brands such
as Lancome, Ralph Lauren and Giorgio Armani
(Page37,para5).
√
The P&G brand portfolio includes Pampers, Tide,Ariel,
Always, Pantene Bounty, Folgers, Pringlers, Charmin,
Downy, Iams, Crest, Actonel and Olay (Page37, para6)
√
Has a strong and supportive relationship with the
profesional and trade groups that has increased with the
introduction of new dental products (Page38,para1).
√
Its top selling product includes brand names such as
Avon Color, Anew, Skin-So-Soft, Avon Solution,
Advance Techniques, Avon Naturals, Mark and Avon
Wellness (Page38,para2)
√
Estee Lauder Companies, Inc. – 2011
Avon
Competitors
Distribution
Channels
Distributes products in 130 countries (Page37,para5)
√
Distribution of consumer products in 140 countries
(Page37,para6)
√
Market its products in over 100 countries through over
5
million
independent
sales
representatives
(Page38,para2)
√
L’Oreal
Procter & Gamble (P&G)
Avon
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
In 2010, the company has EUR 19.5 billion in
consolidated sales and operating profits of EUR
2.2billion (Page37,para5)
Competitors
Financial Position
√
L’Oreal
Procter & Gamble (P&G)
For the 2010 fiscal year, the company saw another
consecutives and free cash flow profitability. P&G
reported $78.9billion of revenues with a net income of
$19.1 billion at the end of the 2010 fiscal year
(Page37,para6).
Colgate-Palmolive
The company had industry revenues of $15,564 million
in 2010 with a gross margin of 59.4 percent and a price
earnings ratio of 19.73. Reported a net income of
$2,203.0 million in 2010. (Page37,para7)
√
√
In 2010 total revenue of $10,862.8 million, with a gross
margin of 62.80 percent, a price earnings ratio of 18.10
20
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
and net income of $606.3 million. Avon continues to
be a formidable competitor. (Page38,para2).
Avon
√
Revlon Worldwide has $2,167.0 million in total
revenues in 2010, with a gross margin of 66.51 percent.
The company’s net income was $94.6 million in
2010(Page38,para3).
√
Revlon
Total
2
18
Based on the competitive analysis, L’Oreal, P&G, Avon, Colgate-Palmolive and Revlon have been found as the competitors for Estee Lauder in the
industry. There are 2 opportunities with 18 threats have been found in this analysis.
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Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
3.5 Opportunities & Threats
To choose opportunities and threats I tried to select those that are critical and able to give greatest impact on Estee Lauder. The selection proses will be
based on PEST analysis consideration as well as from competitive advantage analysis.
No.
1.
Opportunities
2.
Developing markets such as Brazil and India are showing signs of potential gains (Page 33, Para2).
3.
The world’s aging population will multiple by 2.5 times in the next 40year….including high growth countries such as China and India
(Page36,para5
Innovation in product development will also remain an extremely important factor in the industry (Page37,para2)
Opportunities
Probability
Impact
Justification
O1: Innovation in product development will
also remain an extremely important factor in
the industry (Page37,para2)
O2: Developing markets such as Brazil and
India are showing signs of potential gains
(Page 33, Para2).
O3: The world’s aging population will multiple
by 2.5 times in the next 40years….including
high growth countries such as China and India
(Page36,para5
22
Design Strategic Plan /SEM II/ 2012/2013
Almost certain Extraordinary
Possible
Moderate
Likely
Major
Perform highest impact to Estee Lauder in conjunction to cater
consumers-changing needs and preferences in the industry.
Expanding business on these countries might help to increase Estee
Lauder revenues and its global market share.
This target group able to give impact on Estee Lauder revenues and
growth in future since the demands from the world’s agi g populatio
is getting increase from time to time.
Estee Lauder Companies, Inc. – 2011
Probability
Insignificant
Almost certain
Low
Minor
Medium
Moderate
High
Major
High
Extraordinary
High
1
Likely
Low
Medium
Medium
High
Possible
Low
Low
Medium O2
High
High
Unlikely
Rare
Low
Low
Low
Low
Low
Low
Medium
Medium
Medium
Medium
O3
High
No.
1.
Threats
2.
All of the top competitors in the personel products are diversified, with many brand names and wide range of products (Page37,para4)
3.
Avon as the world largest direct seller of personal products (Page38,para2).
The most diversified with a greater depth of product lines, P&G continues to show strong growth and profitability (Page 37,para6)
23
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Threats
Probability
Impact
Likely
Major
P&G possess strong position in terms of its financial position compare
to Estee Lauder. This achievement is due to P&G diversification
strategy which able to reduce Estee Lauder market share, sales and
revenues since the consumers have an ability to switch to the other
brand.
Almost certain
Extraordinary
As to retain loyal consumer, the company should fast responsive to
the consumer preferences, be innovative and able to offer diversify
products.
Possible
Moderate
Able to give major impact towards Estee Lauder’s usi ess, growth
and position in the industry. Avon has a strong brand reputation and
a le to redu e Estee Lauder’s arket share i the i dustry.
T1: The most diversified with a greater depth
of product lines, P&G continues to show
strong growth and profitability (Page
37,para6)
T2: All of the top competitors in the personel
products are diversified, with many brand
names and wide range of products
(Page37,para4
T3: Avon as the world largest direct seller of
personal products (Page38,para2).
Probability
Insignificant
Almost certain
Likely
Low
Low
Consequences
Moderate
Minor
Medium
Medium
High
Major
High
Medium
High
Extraordinary
High
High
T2
1
T1
Possible
Low
Low
Medium
High
High
Medium
Medium
T3
Unlikely
Low
24
Low
Design Strategic Plan /SEM II/ 2012/2013
Low
1
Estee Lauder Companies, Inc. – 2011
Rare
Low
Low
Low
Medium
Medium
3.6 EFE matrix
No.
EFE
Opportunities
Weight
Ratings
Weighted score
1.
Innovation in product development will also remain an extremely important factor
in the industry (Page37,para2)
0.21
4
0.84
2.
Developing markets such as Brazil and India are showing signs of potential gains
(Page 33, Para2).
The world’s aging population will multiple by 2.5 times in the next
40years….including high growth countries such as China and India (Page36,para5
0.10
3
0.30
0.11
3
0.33
3.
No
Threats
1.
The most diversified with a greater depth of product lines, P&G continues to show
strong growth and profitability (Page 37,para6)
0.17
3
0.51
2.
All of the top competitors in the personel products are diversified, with many
brand names and wide range of products (Page37,para4
0.22
3
0.66
3.
Avon as the world largest direct seller of personal products (Page38,para2).
0.11
2
0.22
Total
1
25
Design Strategic Plan /SEM II/ 2012/2013
2.86
Estee Lauder Companies, Inc. – 2011
Conclusion
Based on External Factor Evaluation Analysis, Estee Lauder achieved 2.86 for skin care segment. As a matter of fact, I can clearly see that Estee
Lauder should maximize its external strategies and able to take advantage of existing opportunities and at the same time struggle to reduce the threats
since there are many large companies involved in the industry. Estee Lauder operates highly in a competitive market. The company face strong
competition from established international as well as regional and local players in the industry.
4.0 Internal Assessment
4.1. Strengths & weaknesses
In order to choose the Strengths and weaknesses, I have classified the strength level into three significant categories (Competence, Core Competence
and Distinctive Competence). In this case, Distinctive Competence will be chosen for further assessment as this category shows that Estee Lauder
able to perform unique capabilities that distinguish the organisation from its competitors .
No.
Strengths
1.
Estee Lauder began selling a variety of products over the internet and was one of the first major prestige firms to offer online shopping
(Page30, Para3).
Today Estee Lauder has 28 brands sell products in over 150 countries and territories and employs over 31,200people worldwide (Page30,
Para3).
The first cosmetics company to offer free samples and gift-with-purchase plans…consistent brand imaginary around the world
(Page36,para2)
Core Competence
Estee Lauder remains the top-ranked Prestige brand in its distribution in China and pleased with our progress in Brazil (Page29, Para2)
The first in the industry to introduce consistent brand imagery around the world….uses celebrities as endorses in testimonial advertising
Competence
2.
3.
4.
5.
26
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
for commercials on TV, as well as in magazines (Page36,para2).
6.
7.
8.
9.
No.
1.
Distinctive Competence
Acquisitions including Jo Malone, Stila Cosmetics, Gloss.com…The same year also licence agreements with Sean John, Missoni, and
Donald Trump (Page30, Para3).
Estee Lauder markets more than 9,000 products under many brands names such as Estee Lauder, Aranis, Clinique, Prescriptives, M.A.C,
Bumble….and its new acquisition Smashbox (Page34,para2)
Strong increases in all regions, recent technologically-advanced innovations include Clinique, Estee Lauder…We are pleased with the
success of these new products (Page29,para2)
Weaknesses
In nutshell, Estee Lauder is doing well for
now, However, much larger firms such as
Avon, L’Oreal, P&G…are working hard to
everyday to take market share from Estee
Lauder (Page39,para3).
2.
Justification
Most Incompetence
Estee Lauder needs to be aware with its
closest competitors since they all have the
capabilities to reduce Estee Lauder’s market
share in the industry.
Most Incompetence
Estee Lauder does not have a written
mission statement
3.
Estee Lauder is small compared to some of
its rivals firms (Page37,para4)
27
Design Strategic Plan /SEM II/ 2012/2013
As having a clear written mission is crucial
for Estee Lauder success and future direction
in the industry.
Most Incompetence
Estee Lauder is internally success but among
other major competitors Estee Lauder is still
small which this affect its market share and
revenues in the industry as well.
Estee Lauder Companies, Inc. – 2011
4.2 IFE Matrix
IFE
Weigh
t
Ratings
Weighted score
0.22
4
0.88
No.
1.
Strengths
Acquisitions including Jo Malone, Stila Cosmetics, Gloss.com…The same year also licence
agreements with Sean John, Missoni, and Donald Trump (Page30, Para3).
2.
Estee Lauder markets more than 9,000 products under many brands names such as Estee Lauder,
Aranis, Clinique, Prescriptives, M.A.C, Bumble….and its new acquisition Smashbox (Page34,para2)
0.19
4
0.76
3.
Strong increases in all regions, recent technologically-advanced innovations include Clinique,
Estee Lauder…We are pleased with the success of these new products (Page29,para2)
0.20
4
0.80
No.
1.
Weaknesses
0.16
2
0.32
0.12
2
0.24
0.11
2
0.22
In nutshell, Estee Lauder is doing well for now, However, much larger firms such as Avon, L’Oreal,
P&G…are working hard to everyday to take market share from Estee Lauder (Page39,para3).
2.
Estee Lauder does not have a written mission statement
3.
Estee Lauder is small compared to some of its rivals firms (Page37,para4)
Total
Conclusion
1
3.22
IFE matrix shows the information related to strategy formulation Estee Lauder company. Estee Lauder achieved an overall of total weighted score.
3.22 indicates that the business of Estee Lauder on this skin care segment is internally strong because of Estee Lauder has an ability to respond to
internal factors of the organisation.
28
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
4.3 Value Chain Analysis (Skin Care Segment)
Value Chain provides a model of how Estee Lauder, makes revenue and profit from the raw materials. The facts in Value chain is the critical facts
based on an internal assessment.
29
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Culture
The Estee Lauder Companies, Inc. is committed to the highest standard of profesional and personel conduct. All employees of
the company are expected to conduct themselves at all times within the letter and spirit of the Code… A full description of the
code can be found at http://www.elcompaies .com/pdfs/code-of-conduct-2010.pdf.(Estee Lauder’s Ethics, Page30). Estee
Lauder strongly advocates corporate social responsibility to its customers and community in which it operates (Page33, Para3).
Management
Bumble and Bumble had expanded to all stand alone Sephora doors in the U.S.(Page29,Para2). Launched its first ever print
and campaign for its new texture cream in North America in April followed by the U.K. this month. (Page 29, Para2). Turkey
We also gained share in South Africa . In Rusia our sales –every-day remains strong rising more than 20 percent which is about
double the overall Prestige beauty growth (Page29, Para2). Continue to acquire more brand licensing…..Aveda (Page 30,
Para1). Utilizes a strategic business unit-type …and others maybe family members (Page30, Para8).
Finance
Production
R&D/ MIS
Raw Material
N/A
30
Estee Lauder releases its fourth quarter and fiscal year financial result in mid-August of each year (Page29,Para3). Sales of
skin care products account for 41 percent or 44 billion of net sales. See exhibit 5 (Page 31, para2) Net sales increased 6 percent
or to a record gross margin 76.5 percent….$478million (Page31, Para2).
The first products sold were Super Rich All Purpose Crème, Crème Pack, Cleansing oil,, and skin Lotion…Clinique (the first
dermatologist-guided, allergy tested, fragrance free cosmetics brand launched in 1968) (Page30,Para1). The company has
manufacturing facilities…nearly every continent, see exhibit 2 (Page30, Para8) Estee Lauder manufacturing operations are
certified by an independent third party to conform to the ISO14001 standards…safely initiatives (Page34, Para1)
The company expanded again by opening Clinique Laboratories, Inc. (Page30, Para2). Launched multiple product lines
including Grassroots Research Labs (Page30, Para3). The company has R&D operations… nearly every continent, see exhibit
2 (Page30, Para8). A new division called ELC Online was created to manage all online strategies and activities for all of its
brands (Page30, Para3).
Production/Operation
13 Factories for manufacturing.
See Exhibit 2 (Page 31) Estee
Lauder established its first
department store….at Harrods in
London, with the Hong Kong
market opening the following year
(Page30,
Para1).
Launched
Beauty Flirt and Good Skin
through its
Beauty Bank
division…..and
Donald
Trump(Page30, Para3).
Product/Service
Recent
technologically-advanced
innovations
include
Clinique,
Repairwear Laser Focus, Estee
Lauder Advanced Night Repair Eye
Recovery
Complex,
La
Mer
Regenerating Serum and Origins
Plantscription (Page29,Para2) . Service
and individualized attention is offered to
customers via brand websites, toll free
phone numbers and six global
Consumers
Care
Centres
(Page35, Para1).
Design Strategic Plan /SEM II/ 2012/2013
Marketing
Distribution
Launches social media marketing
channels (Page35, Para2). Launce
large scale social networking and
online campaign(Page35, Para3).
Offer free samples and gift…the
company use celebrity as endorses in
testimonial
advertising
for
commercials in TV (Page36,para2).
Prestige pricing appears to be an
effective strategy (Page36,para3).
Presence in department stores,
freestanding stores and Sephora in
38 cities in China (Page29, Para2).
Online initiative in the countries
extends our reach to more than 346
cities (Page29, Para2). Estee Lauder
remains the top-ranked Prestige
brand in its distribution in China
(Page29, Para2).The channel consist
primarily of upscale department
store…and the internet (Page35,
Para2).
Estee Lauder Companies, Inc. – 2011
Marketing
Effort-3
4.4 Value Chain Flow Chart (Skin Care Segment)
Customer-3
Received raw
materials from
supplier (For Skin
Care Raw material)
Manufacturing/
Production
Online
shopping
Skin Care
Finished products
Custo
mer2
Marketing Effort-2
Customer-1
Travel
Retail
EL Market research purposes /
Skin care New products
Consumers Feedbacks
Research and
Development
(R&D)
Distributor
Marketing
Effort-1
Business
In
Flight
Marketing
Effort-4
Freestanding
Company
End Users/
Individual/
Consumers
Specialty
retailers
Pharmacies
∑ Marketing Effort = M.E1+M.E2+M.E3+M.E4
31
Design Strategic Plan /SEM II/ 2012/2013
Upscale
Department
Store
Stores
in
Cruise
Ships
Duty
Free
Shops
in
Airport
Estee Lauder Companies, Inc. – 2011
5.0 Strategy Formulation
5.1 IE Matrix
The IFE Total Weighted Score
Strong
Average
Weak
The EFE Total Weighted Score
1.0
4.0
3.0
High
2.0
Grow and Build
3.0
Medium
2.0
Low
1.0
EFE
IFE
2.86
3.22
The division falls into cell IV which can be described as grow and build. Intensive strategies such as product development can be most appropriate for this division.
32
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
5.1 SWOT Matrix
According to IE matrix, Estee Lauder positioned in cell IV which can be described as aggressive (grow and build), so I will chose S/O strategies from SWOT
analysis.
SWOT
Turnaround (W/O)
Aggressive (S/O)
Defensive (W/T)
Diversification (S/T)
Aggressive
33
Grow & Build
IE
Grow & Build
Grow & Build
Hold & Maintain
Hold & Maintain
Harvest or Divest
Design Strategic Plan /SEM II/ 2012/2013
Hold &
Maintain
Harvest or Divest
Harvest or Divest
Estee Lauder Companies, Inc. – 2011
5.1. SWOT Matrix
SWOT Matrix
Strengths
Opportunities
1. Innovation in product development will also
remain an extremely important factor in the
industry (Page37,para2)
Threats
1. The most diversified with a greater depth of
product lines, P&G continues to show strong
growth and profitability (Page 37,para6)
2. Developing markets such as Brazil and India are
showing signs of potential gains (Page 33, Para2).
2. All of the top competitors in the personel
products are diversified, with many brand names
and wide range of products (Page37,para4)
3. The world’s aging population will multiple by
2.5 times in the next 40year….including high
growth countries such as China and India
(Page36,para5.
3. Avon as the world largest direct seller of
personal products (Page38,para2).
SO Matches
1. Acquisitions including Jo Malone, Stila Cosmetics,
Gloss.com…The same year also licence agreements with Sean
John, Missoni, and Donald Trump (Page30, Para3).
SO1: Introduce high quality EL anti-wrinkle
cream products in target market of China, India
and Brazil (S2,S3,O1, O2,03)
2. Estee Lauder markets more than 9,000 products under many
brands names such as Estee Lauder, Aranis, Clinique,
Prescriptives, M.A.C, Bumble….and its new acquisition Smashbox
(Page34,para2).
SO2: Target EL anti-wrinkle cream products in
anti-aging market, range in age from 38 to 47 years
old (S3,O3)
34
Design Strategic Plan /SEM II/ 2012/2013
ST Matches
ST1: Take the opportunity to continue implement
strategic focus, acquire interest in start-up
companies and expanding skin care products
through innovative approach.( S1,S2,T3)
ST2: Effort to continuously produce highinnovative and diversify skincare products (S3,
T2,T3)
Estee Lauder Companies, Inc. – 2011
3.Strong increases in all regions, recent technologically-advanced
innovations include Clinique, Estee Lauder…We are pleased with
the success of these new products (Page29,para2)
(EL’s distinctive Competence).
Weaknesses
1. In nutshell, Estee Lauder is doing well for now, However, much
larger firms such as Avon, L’Oreal, P&G…are working hard to
everyday to take market share from Estee Lauder (Page39,para3).
2. Estee Lauder does not have a written mission statement (Page
30, para7)
WO Matches
Increase Estee Lauder market share by responding
towards the growing demands of anti-aging skincare
products (W1,W3,O3)
Actively increase involvement in International
market and expand Estee Lauder skincare product
in developing market such as China, India and
Brazil in order to improve Estee Lauder profitable
growth in the industry (W3,O2,03)
3. Estee Lauder is small compared to some of its rivals firms
(Page37,para4)
SWOT conclusion:
Based on the SWOT analysis the corporate level and business level strategies are as follows:
35
Design Strategic Plan /SEM II/ 2012/2013
WT Matches
Prepare a new version of Estee Lauder mission and
vision to clearly direct company success with
consideration of current competitors (W2,T1,T2)
-
Estee Lauder Companies, Inc. – 2011
Corporate Level Strategy
No
1.
Type of strategy
Product
Development
Introduce High quality of EL anti-wrinkle cream products in
target market of China, India and Brazil
(S2,S3,O1, O2,03)
Business Level Strategy
No
1.
Type of strategy
Focus- Best
Value (Type 5)
SO2: Target EL anti-wrinkle cream products in anti-aging
market, range in age from 38 to 47 years old (S3,O3)
Strategy Formulation Conclusion
IE matrix results, shows that Estee Lauder should Grow and Build its position. This means intensive and aggressive tactical strategies should be done.
Therefore, product development is the best chosen strategy of Estee Lauder as it is positioned in aggressive area. Therefore, the S/O strategies should
be implemented in order to develop new product of EL anti-wrinkle cream responding from the growing global population of aging group.
36
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
6.0 CLS,BLS- Strategy Maps Diagram
Long-Term shareholder value
Productivity
Strategy
Corporate Level Strategy
(PD)
Growth Strategy
Improve Cost
Structure
Introduce High quality of
EL anti-wrinkle cream
Increase Asset
Utilisation
Expand Revenue
Opprtunities
Enhance Customer
Value
products in target market of
China, India and Brazil.
Business Level Strategy
(Focus-Best Value)
Price
Quality
Availability
Operation Management
Processes
Customer
Management
Processes
Target EL anti-wrinkle
cream products in anti-aging
market, range in age from 38
to 47 years old.
Productivity
37
Design Strategic Plan /SEM II/ 2012/2013
Selection
+
Productivity
Function
Service
Innovation
process
+
Partnership
Regulatory and
Social Processes
Productivity
Brand
Estee Lauder Companies, Inc. – 2011
Corporate Level Strategy
(PD)
Operation Management Processes
Supply
Production
Distribution
Risk Management
Introduce High quality of EL anti-wrinkle cream
products in target market of China, India and Brazil
Customer Management Processes
Selection
Acquisition
Retention
Growth
Business Level Strategy
(Focus-Best Value)
Target EL anti-wrinkle cream products in
anti-aging market, range in age from 38 to 47
years old.
38
Design Strategic Plan /SEM II/ 2012/2013
Innovation Processes
Opportunity ID
R&D Portfolio
Design/Develop
Launch
Regulatory and Social Processes
Environment
Safety and Health
Employment
Community
Estee Lauder Companies, Inc. – 2011
7.0 Operation Management Process (OMP)
7.1 The Theme of OMP:
CUSTOMER MANAGEMENT
From CLS:
PROCESS
Introduce High quality of EL anti-wrinkle
cream products in target market of China,
India and Brazil
From BLS : Making EL anti-wrinkle
cream products with strategic focus on
anti-aging market by range of age from
38 to 47 years old
INNOVATION PROCESS
From CLS : Introduce High quality of EL anti-wrinkle cream products in target market of China, India and Brazil.
From BLS : Making EL anti-wrinkle cream products with strategic focus on anti-aging market by range
of age from 38 to 47 years old.
39
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
7.1.1 Define the objectives in Supply Processes
Develop High quality supplier capability for EL anti-wrinkle cream products.
Use new ideas from suppliers.
Objective
Balance Scorecard (BSC)
Measure
Use New ideas from
supplies
Develop High quality
supplier capability for EL
anti-wrinkle cream
products.
40
Design Strategic Plan /SEM II/ 2012/2013
Number of innovations from
suppliers
Target
Support to 100%
encouragement for suppliers
on sharing innovations ideas
Supplier performance survey, 100% satisfaction on supplier
Percent of perfect orders
performance,
received
99% targeted for perfect
order received
Estee Lauder Companies, Inc. – 2011
Linkage to Production
Operation Management Processes (Supply)
Production
Objectives
Use New ideas from supplies
Develop High quality supplier capability for EL anti-wrinkle
cream products.
None
ECC&AFNPLELAWCP
Note:
1. ECC&AFNPLELAWCP = Ensure Quality Control & Assurance for New Production Line of EL Anti-Wrinkle cream products
41
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Risk Management
Operation Management Processes (Supply)
Risk Management
Objectives
Use New ideas from supplies
MRSISR
Develop High quality supplier capability for EL anti-wrinkle cream
products.
Note
(Supply)
MRCSQAWC = Manage the risk on the consistency of supplying quality anti-wrinkle compounds
MRSISR = Manage Risk Sharing in Supplier Relations
42
Design Strategic Plan /SEM II/ 2012/2013
MRCSQAWC
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Operation Management Processes (Supply)
Price
Customer Perspective
(Customer Value Proposition)
Quality
Availability
Selection
*Brand
Objectives
Use New ideas from supplies
None
EQ
None
LELAWC
None
Develop High quality supplier capability
for EL anti-wrinkle cream products.
None
EQ
None
LELAWC
*EELBIFHQAWC
Note:
(CVP)
EQ = Enhance Quality
LELAWC = Limited EL Anti-wrinkle creams (Day cream, Night cream)
EELBIFHQAWC = Enhance Estee Lauder Brand Image for High Quality AntiWrinkle cream
43
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Operation Management Processes (Supply)
Financial Perspective
Improve Cost
Structure
Increase Assets
Utilization
Expand Revenue
Opportunities
Enhance
Customer Value
Use New ideas from supplies
None
None
None
None
Develop High quality supplier capability for EL antiwrinkle cream products.
SPC
TDORMUIPELAWC
CNSORNP
None
Objectives
Note
(Supply)
TDORMUIPELAWC = Timely Deliveries on Raw Materials Used in Producing EL Anti-Wrinkle Creams
SPC = Save Production Costs
CNSORNP = Create New Source of Revenue from New Product
Those objectives should later be carried out to the Financial Pers. accumulatively
44
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Learning & Growth
Operation Management Processes (Supply)
Learning & Growth
Objectives
Human Capital Information Capital Organizational Capital
Use New ideas from supplies
DSCEIT
None
ECA
Develop High quality supplier capability for EL anti-wrinkle cream products.
DES&CC&AQT
QP&CAWCP
CQCC
Note:
DSCEIT = Develop Strategic Competencies for Employees Innovative Thinking
DES&CCA QT= Develop Employees Skills & Competencies on Quality & Assurance through Quality Training
ECA = Enhance Competitive Advantage
QP&CAWCP = Quality Policies & Conformity on Anti-Wrinkle Cream Products
CQCC = Create Quality-Centric Culture
45
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
7.1.2 Define the objectives in Production Processes
Ensure Quality Control & Assurance for New Product Line of EL-Anti Wrinkle Cream Products. (Linkage from Supply Process)
Target production of EL Anti-wrinkle Cream Products to China, India and Brazil (New Objective).
Objective
Ensure
Quality
Control
&
Assurance for New Product Line of
EL-Anti Wrinkle Cream Products.
Balance Scorecard (BSC)
Measure
Percent of shipments returned due
to poor quality
Target
Target to produce 99% of
High quality of EL-Anti
wrinkle cream products
(Linkage from Supply Process)
Target production of EL Antiwrinkle Cream Products to China,
India and Brazil (New Objective).
46
Design Strategic Plan /SEM II/ 2012/2013
Market Share
Target to increase 15% of
market share in Skin Care
segment
Estee Lauder Companies, Inc. – 2011
Linkage to Distribution
Operation Management Processes (Production)
Distribution
Objectives
DELWCPMQS
Ensure Quality Control & Assurance for New Product Line of ELAnti Wrinkle Cream Products. (Linkage from Supply Process)
Target production of EL Anti-wrinkle Cream Products to China,
DEDSICIB
India and Brazil (New Objective).
Note:
DELWCPMQS = Distribution of EL Anti-Wrinkle Cream Products Meet Quality Specification
DEDSICB = Develop Effective Distribution system in India, China and Brazil
47
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Risk Management
Operation Management Processes (Production)
Risk Management
Objectives
Ensure Quality Control & Assurance for New Product Line of ELAnti Wrinkle Cream Products. (Linkage from Supply Process)
Target production of EL Anti-wrinkle Cream Products to China,
MRCPHQELAWCP
MRMELAWCPPAPP
India and Brazil (New Objective).
Note
(Production)
MRCPHQELAWCP = Manage the risk on the consistency of producing High quality of EL anti-wrinkle cream Products
MRMELAWCPPAPP= Manage Risk of maintaining EL Anti-Wrinkle Cream Physical Perfection and Appearance after Production Process
48
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Operation Management Processes (Production)
Customer Perspective
(Customer Value Proposition)
Objectives
Ensure Quality Control & Assurance for New
Product Line of EL-Anti Wrinkle Cream
Products. (Linkage from Supply Process)
Price
Quality
Availability
Selection
Brand
None
EQELAWC
None
LELAWC(DC,NC)
AAM
EELBIVAASB
ORP
EQELAWC
None
LELAWC(DC,NC)
AAM
EELBIVAASB
Target production of EL Anti-wrinkle Cream
Products to China, India and Brazil (New
Objective).
Note:
LELAWC (DC,NC) = Limited EL Anti-Wrinkle Creams (Day, Cream, Night Cream) for Anti-Aging Market
ORP = Offer Reasonable Price
EQELAWC, DOT = Excellence Quality EL Anti-Wrinkle Creams, Deliver On Time
EBV = Enhance Brand Value
EELBIVAASB = Enhance Estee Lauder Brand Image Via its Anti-Aging Skincare Brand
* Those objectives should later be carried out to Customer Pers. Accumulatively.
49
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Operation Management Processes (Production)
Financial Perspective
Objectives
Ensure Quality Control & Assurance for
New Product Line of EL-Anti Wrinkle
Cream Products. (Linkage from Supply
Improve Cost Structure
Increase Assets
Utilization
Expand Revenue
Opportunities
Enhance Customer
Value
RD, RWC
None
IRMCE
ICP, ICS
None
MPAUTPP
GRFNC
None
Process)
Target production of EL Anti-wrinkle
Cream Products to China, India and Brazil
(New Objective).
Note
RD, RWC = Reduce Defects, Reduce Waste Costs
IRMCE = Increase Revenue for Meeting Customer Expectation
ICP, ICS = Increase Customers Profitability, Increase Customer Satisfaction
MPAUTPP = Maximize Physical Assets Utilization Throughout Production Process
GRFNC = Generate Revenues from New Customers
*Those objectives should later be carried out to the Financial Pers. Accumulatively
50
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Learning & Growth Perspective
Operation Management Processes (Production)
Learning & Growth
Objectives
Human Capital
Ensure Quality Control & Assurance for New Product Line of ELAnti Wrinkle Cream Products. (Linkage from Supply Process)
Target production of EL Anti-wrinkle Cream Products to China,
Information Capital
Organizational Capital
IQMS, Q-CC
EETIQCAAPANPL
DQD,QP&SAPA
RCEFCIAPA
ITTFNPL
GCATHQELAWCP,
PELAWCP
India and Brazil (New Objective).
Note:
EETIQAAPANPL = Efficient Employees Training in Quality Control & Assurance at Production Area for New Product Line
DQD,QP&SAPA = Develop Quality Documentation, Quality Policies & Standards at Production Area
RCEFCIAPA = Retain Competence Employees for Continuously Improvement at Production Area
IQMS,Q-CC = Improve Quality Management System, Quality-Centric Culture
ITTFNPL = Improve Technology to Facilitate New Production Line
GCATHQELAWCP, PELAWCP = Gain Competitive Advantage through High Quality of EL Anti Wrinkle Cream Products, Patent for EL Anti Wrinkle Cream
Products
*Those Objectives should be carried out to the Learning &Growth Perspective accumulatively
51
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
7.1.3 Define the objectives in Distribution Processes
Distribution of EL Anti-wrinkle Cream Products meet Quality specification (Linkage from Production)
Develop Effective Distribution System in India, China and Brazil (Linkage from Production)
Deliver EL Anti-Wrinkle Creams Products responsively to customers (New Objective)
Objective
Balance Scorecard (BSC)
Distribution of EL Anti-wrinkle Cream Products
meet
Quality
specification
(Linkage
from
Measure
Percent of EL Anti-wrinkle cream
products delivered with no defects
Target
Target to 95% for meeting
quality specification
Customers Feedbacks
Target to 100% of customer
satisfaction
On-Time Delivery percentage
Increase On-Time Delivery
for EL Anti-Wrinkle cream
products to 99%
Production)
Develop Effective Distribution System in India,
China and Brazil (Linkage from Production)
Deliver EL Anti-Wrinkle Creams Products
responsively to customers (New Objective)
52
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Risk Management
Risk Management
Operation Management Processes
(Distribution)
Objectives
Distribution of EL Anti-wrinkle Cream Products
meet
Quality
specification
(Linkage
MQRDS
from
Production)
Develop Effective Distribution System in India,
MRPLCICB
China and Brazil (Linkage from Production)
Deliver EL Anti-Wrinkle Creams Products
responsively to customers (New Objective)
MRELAWCPAT
Note
(Distribution)
MQRDS = Manage quality risk of delivery service
MRPLCICB= Manage the risk of product lost in countries of India, China
and Brazil
MRELAWCPAT = Manage the Risk of EL Anti-wrinkle cream Products
acceptance Time
Those objectives should later be carried out to the Risk Management as accumulative Objectives.
53
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Operation Management Processes
(Distribution)
Objectives
Distribution of EL Anti-wrinkle Cream Products meet
Customer Perspective (Customer Value Proposition)
Price
Quality
Availability
Selection
None
EQ
None
LELAWC
(DC,NC)
ORP
EQ
OAUDS&TR
LELAWC
(DC,NC)
ORP
EQ
DELAWCPOT
LELAWC
(DC,NC)
Quality specification (Linkage from Production)
Develop Effective Distribution System in India, China
and Brazil (Linkage from Production)
Deliver EL Anti-Wrinkle Creams Products
responsively to customers (New Objective)
Note:
OAUDS&TR = Only Available at Upscale Department Stores & Travel Retails
LELAWC (DC,NC) = Limited EL Anti-Wrinkle Creams (Day, Cream, Night Cream)
DELAWCPOT = Deliver EL Anti-Wrinkle Cream Products on Time
ORP = Offer Reasonable Price
EQ = Excellence Quality
Those objectives should later be carried out to Customer Pers. Cumulatively.
54
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Operation Management Processes
(Distribution)
Financial Perspective
Improve Cost
Structure
Increase
Assets
Utilization
Expand
Revenue
Opportunities
Enhance
Customer
Value
RDCWRELAWC
RECDU
None
ICS
LTCDBFL
MWCE
IRFNC
None
None
MTAUTDP
None
ICS
Objectives
Distribution of EL Anti-wrinkle Cream Products meet
Quality specification (Linkage from Production)
Develop Effective Distribution System in India, China
and Brazil (Linkage from Production)
Deliver EL Anti-Wrinkle Creams Products
responsively to customers (New Objective)
Note
RDCWRELAWC = Reduce the costs from Waste reduction for EL Anti-Wrinkle Creams
RECDU = Reduction in Excess Capacity of a distribution unit
LTCDBFL = Lower Total Costs of Distribution benchmarking for logistics
MWCE = Maximize Workforce Cooperative Efforts
IRFNC Increase Revenue from New Customers
MTAUTDP = Maximize technology Assets utilisation throughout distribution process
ICS = Increase Customer Satisfaction
Those objectives should later be carried out to the Financial Pers. Cumulatively
55
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Learning & Growth Perspective
Operation Management Processes
(Distribution)
Human
Capital
Learning & Growth
Information Organizational
Capital
Capital
Objectives
Distribution of EL Anti-wrinkle Cream Products
meet
Quality
specification
(Linkage
CEIQDP
DQTDFEL
AWCPDS
IQMSIDA
CEDPI
DMP&P
IDMS
ECFDIDP
LTFDIIDP
FIIELDS
from
Production)
Develop Effective Distribution System in India,
China and Brazil (Linkage from Production)
Deliver EL Anti-Wrinkle Creams Products
responsively to customers (New Objective)
Note
CEIQDP = Competence Employees in Quality Control throughout Distribution Process
DQTDFELAWCPDS = Develop quality training documentation for EL Anti-Wrinkle Cream Products
distribution system
IQMSIDP = Improve Quality Management System in Distribution Process
CEDPI = Competence Employees in Distribution Process Improvement
IDMS = Improve Distribution Management System
DMP&P = Distribution Management Policies and Procedures
ECFDIDP = Employees Skills for Fast Delivery in Distribution Process
LTFDIIDP = Logistics Technology that facilitates delivery Improvement in Distribution Process
FIIELDS = Facilities Improvement in EL Distribution System
Those Objectives should be carried out to the Learning &Growth Perspective cumulatively.
56
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
7.1.4 Define the objectives in Risk Management Process
Note:
(Supply)
1. MRCPHQEELAWCP = Manage the Risk of Consistency of Supplying Quality
Anti-Wrinkle Compounds .
2. MRSISR = Manage Risk Sharing in Supplier Relations.
Note:
(Production)
1.MTRCPHQELAWCP = Manage the risk on the consistency of producing High quality of EL
anti-wrinkle cream Products.
=
2. MRMELAWCPPAPP= Manage Risk of maintaining EL Anti-Wrinkle Cream Physical Perfection
and Appearance after Production Process.
Note
(Distribution)
1. MQRDS = Manage quality risk of delivery service
2. MRPLCICB= Manage the risk of product lost in countries of India, China
and Brazil
3. MRELAWCPAT = Manage the Risk of EL Anti-wrinkle cream Products
acceptance Time
Competitive Advantage on EL Anti-Wrinkle Cream Products to serve better than Rivals
57
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Define the objectives in Risk Management Processes (New)
MFRELNPLELAWCP= Manage Financial Risk for EL New Production Line of EL Anti-Wrinkle Cream Products (New Objective)&AFNPLELAWCP = Ensure
Quality Control & Assurance for New Production Line of EL Anti-Wrinkle cream products
Define the objectives in Risk Management Processes
1. MRCPHQEELAWCP = Manage the Risk of Consistency of Supplying Quality Anti-Wrinkle Compounds from Supply ;
2. MTRCPHQELAWCP = Manage the risk on the consistency of producing High quality of EL anti-wrinkle cream Products from production ;
3. MQRDS = Manage quality risk of delivery service from distribution ;
4. MRSISR = Manage Risk Sharing in Supplier Relations from Supply ;
5. MRMELAWCPPAPP= Manage Risk of maintaining EL Anti-Wrinkle Cream Physical Perfection and Appearance after Production Process
from production ;
6. MRPLCICB= Manage the risk of product lost in countries of India, China and Brazil from distribution ;
7. MRELAWCPAT = Manage the Risk of EL Anti-Wrinkle Cream Products Acceptance Time from distribution ;
8. MFRELNPLELAWCP= Manage Financial Risk for EL New Production Line of EL Anti-Wrinkle Cream Products (New Objective).
58
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkages to Customer Perspective
Operation management
process
Objectives
Customer Perspective (Customer Value Proposition)
Price
Quality
Availability
Selection
Service
Partnership
Brand
None
Enhance
Quality from
receiving high
quality of raw
materials
(EQHGRM)
None
None
Lesser product return
for EL Anti-Wrinkle
Cream (LPRELAWC)
None
Increase
reputation of
EL Skincare
Brand
(IRELSB)
Offer
Reasonable
Price (ORP)
Enhance
Quality from
High Quality
Inspection in
Production
(EQHQIP)
None
Limited EL Anti
Wrinkle Cream
Products
LELAWC (DC,NC)
Lesser product return
for EL Anti-Wrinkle
Cream (LPRELAWC)
None
Increase
reputation of
EL Skincare
Brand
(IRELSB)
Enhance
Quality
compliances
during delivery
service
(EQCDS)
Available only at
Upscale
Department
Stores and Travel
Retails
(IRPDOTUD&TR
)
Limited EL Anti
Wrinkle Cream
Products
LELAWC (DC,NC)
Lesser customer’s
complaint (LCC)
None
Increase
reputation of
EL Skincare
Brand
(IRELSB)
Manage the Risk of
Consistency of Supplying
Quality Anti-Wrinkle
Compounds from Supply
Manage the risk on the
consistency of producing
High quality of EL antiwrinkle cream Products
from production
Manage quality risk of
delivery service from
distribution
59
None
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Manage Risk Sharing in
Supplier Relations from
None
None
None
None
None
None
None
None
Enhance Quality
of EL-Anti
Wrinkle Cream
Products
(EQELAWCP)
None
None
Lesser product return
for EL Anti-Wrinkle
Cream (LPRELAWC)
None
Increase
reputation of
EL Skincare
Brand
(IRELSB)
None
None
Enhanced Products
secured throughout
distribution process
(EPSTDS)
Limited EL AntiWrinkle Cream
Products (Day Cream,
Night Cream)
LELAWC (DC,NC)
None
Improving
communication and
better cooperation
(ICBC)
None
Limited EL AntiWrinkle Cream
Products (Day Cream,
Night Cream)
LELAWC (DC,NC)
Lesser customer’s
complaint (LCC)
Improving
communication and
better cooperation
(ICBC)
Supply
Manage Risk of
maintaining EL AntiWrinkle Cream Physical
Perfection and
Appearance after
Production Process from
production
Manage the risk of
product lost in countries
of India, China and Brazil
from distribution
Manage the Risk of EL
Anti-Wrinkle Cream
None
Products Acceptance
Time from distribution
60
Design Strategic Plan /SEM II/ 2012/2013
Increase the rate of
EL Anti-Wrinkle
Cream to be
delivered on time
available only at
Upscale
Department Stores
Increase
reputation of
EL Skincare
Brand
(IRELSB)
Estee Lauder Companies, Inc. – 2011
and Travel Retails
(IRPDOTUD&TR)
Manage Financial Risk
for EL New Production
Line of EL Anti-Wrinkle
Cream Products
ORP
None
None
None
None
None
None
Those objectives should later be carried out to Customer Pers. Accumulatively.
Linkage to Financial Perspective
Operation management process
Objectives
Financial Perspective
Improve Cost Structure
Increase Assets
Utilization
Reduce Wastage Costs
(RWC)
None
Expand Revenue
Opportunities
Enhance Customer Value
Manage the Risk of
Consistency of Supplying
Quality Anti-Wrinkle
Compounds from Supply
61
Design Strategic Plan /SEM II/ 2012/2013
None
None
Estee Lauder Companies, Inc. – 2011
Manage the risk on the
consistency of producing High
Less Operating Costs
Optimize energy
consumption
throughout production
process (OECTPP)
None
Increase Customer Satisfaction
(ICS)
Less delivery costs from
distribution process
Optimize energy
consumption
throughout distribution
process (OECTPP)
Revenue Increase from
High Quality EL AntiWrinkle Cream Products
(RIHQELAWCP)
Increase Customer Satisfaction
(ICS)
None
None
None
None
Less Costs of Returned
Products for EL AntiWrinkle Cream
(LCOFRPELAWC)
Maximise production
output (MPO)
Increase Sales and
profitability (IS&P)
None
None
None
Increase Sales and
profitability (IS&P)
None
quality of EL anti-wrinkle
cream Products from
production
Manage quality risk of
delivery service from
distribution
Manage
Risk
Supplier
Sharing
Relations
in
from
Supply
Manage Risk of maintaining
EL Anti-Wrinkle Cream
Physical Perfection and
Appearance after Production
Process from production
Manage the risk of product
lost in countries of India,
China and Brazil from
62
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
distribution
Manage the Risk of EL AntiWrinkle Cream Products
None
Better use of
Technology From
distribution system
(BUTFDS)
None
Increase Customer Satisfaction
(ICS)
None
Better use of financial
assets (BUFA)
None
None
Acceptance Time from
distribution
Manage Financial Risk for EL
New Production Line of EL
Anti-Wrinkle Cream
Products
*Those objectives should later be carried out to the Financial Pers. Accumulatively
Linkage to Learning &Growth Perspective
Operation management
process
Objectives
Human Capital
Learning & Growth
Information Capital
Organizational Capital
Enhance Employees Skills in supplier
Quality Control (EESISQC)
Supplier Quality Requirement Manual (SQRM)
Improve Supply Chain System (ISPCS)
Employees Optimum Skills Level in
Technical and production area
El anti-Wrinkle Cream Products specifications
(ELAWCPS)
Improve Quality Management
System (IQMS)
Manage the Risk of Consistency
of Supplying Quality AntiWrinkle Compounds from
Supply
Manage the risk on the
consistency of producing High
quality of EL anti-wrinkle cream
63
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Products from production
Manage quality risk of delivery
service from distribution
Manage Risk Sharing in Supplier
Relations from Supply
Manage Risk of maintaining EL
Anti-Wrinkle Cream Physical
(EOSLT&PA)
Enhance Employees Skills in delivery
Service (EESIDS)
Technology improvement to facilitate delivery
service (TITFDS)
Infrastructure delivering
Improvement (IDI)
Increase Employees
Intellectual Capital (EIC)
Knowledge Management (KM)
Innovation Culture and Openness in
sharing ideas (ICONSI)
Enhance Employees Skills in delivery
Service (EESIDS
Standards and conformity Assessment
(S&CA)
None
None
None
None
None
None
Improve Distribution Management
System (IDMS)
Enhance Employees Skills in
Accounting and Finance (EESIAF)
None
Perfection and Appearance after
Production Process from
production
Manage the risk of product lost in
countries of India, China and
Brazil from distribution
Manage the Risk of EL AntiWrinkle Cream Products
Acceptance Time from
distribution
Manage Financial Risk for EL
New Production Line of EL AntiWrinkle Cream Products
64
Design Strategic Plan /SEM II/ 2012/2013
Improve Financial Management
System
Estee Lauder Companies, Inc. – 2011
Summarizing the objectives Operation Management Processes
No
Operation Management
Processes
1
2
Supply
Objectives
Measure
Target
Use New ideas from supplies
Number of innovations from suppliers
Develop High quality supplier
capability for EL anti-wrinkle cream
products.
Supplier performance survey,
Percent of perfect orders received
Support to 100%
encouragement for
suppliers on sharing
innovations ideas
100% satisfaction on
supplier performance,
99% targeted for perfect
order received
3
4
Operation and
Production
Ensure Quality Control & Assurance
for New Product Line of EL-Anti
Wrinkle Cream Products.
Target production of EL Anti-wrinkle
Cream Products to China, India and
Percent of shipments returned due to poor quality
Target to produce 100% of
High quality of EL-Anti
wrinkle cream products
Market Share
Target to increase 15% of
market share in Skin Care
segment
Percent of EL Anti-wrinkle cream products
delivered with no defects
Target to 99% for meeting
quality specification
Customers Feedbacks
Target to 100% of customer
satisfaction
Brazil.
Distribution of EL Anti-wrinkle Cream
5
Products
Distribution
meet
Quality
specification
(Linkage from Production)
Develop Effective Distribution System in
6
India, China and Brazil (Linkage from
65
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Production)
Deliver EL Anti-Wrinkle Creams Products
responsively to customers (New Objective)
7
On-Time Delivery percentage
Increase On-Time Delivery
for EL Anti-Wrinkle cream
products to 99%
Summarizing the objectives Operation Management Processes Linkages
No
Processes
Objectives
SUPPLY:
TDORMUIPELAWC = Timely Deliveries on Raw Materials Used
in Producing EL Anti-Wrinkle Creams
SPC = Save Production Costs
CNSORNP = Create New Source of Revenue from New Product
1
2
3
4
5
6
7
Financial
Perspective
8
9
66
Measure
Target
on-time delivery from supplier
95%
Production costs
Revenue growth
15% decrease
20% increase
PRODUCTION:
RD, RWC = Reduce Defects, Reduce Waste Costs
Percent of defects, waste costs
1-3%, 15%
decrease
IRMCE = Increase Revenue for Meeting Customer Expectation
ICP, ICS = Increase Customers Profitability, Increase Customer
Satisfaction
revenue growth
Profit per customer, customer
survey for level of satisfaction
MPAUTPP = Maximize Physical Assets Utilization Throughout
Production Process
GRFNC = Generate Revenues from New Customers
-
20% increase
5% increase,
100% of
satisfied
customer
90% increase
Design Strategic Plan /SEM II/ 2012/2013
Revenues gained from new
customers
20% increase
Estee Lauder Companies, Inc. – 2011
DISTRIBUTION:
RDCWRELAWC = Reduce the costs from Waste reduction for
EL Anti-Wrinkle Creams
RECDU = Reduction in Excess Capacity of a distribution unit
LTCDBFL = Lower Total Costs of Distribution benchmarking for
logistics
MWCE = Maximize Workforce Cooperative Efforts
IRFNC Increase Revenue from New Customers
MTAUTDP = Maximize technology Assets utilisation throughout
distribution process
ICS = Increase Customer Satisfaction
10
11
12
13
14
15
16
17
18
19
RISK MANAGEMENT:
Reduce Wastage Costs (RWC)
Less Operating Costs
Optimize energy consumption throughout production process
(OECTPP)
Increase Customer Satisfaction (ICS)
20
21
67
Design Strategic Plan /SEM II/ 2012/2013
Wastages costs
15%decrease
Excess capacity reduced
Cost of distribution
20%decrease
15% decrease
Revenue growth
-
20% increase
90%of assets
utilization
100% satisfied
customer
Customer feedback (survey) for
level of satisfaction
Wastages costs
Operating costs
Energy consumed in production
Customer survey for satisfaction
level
15% decrease
15% decrease
95%of energy
optimization
100%of
satisfied
customer
Estee Lauder Companies, Inc. – 2011
Less delivery costs from distribution process
Optimize energy consumption throughout distribution process
(OECTPP)
Revenue Increase from High Quality EL Anti-Wrinkle Cream
Products (RIHQELAWCP)
Delivery cost
Energy consumed in distribution
process
revenue
10% decrease
95%of energy
optimization
20% increase
Products returned costs
15% decrease
27
Less Costs of Returned Products for EL Anti-Wrinkle Cream
(LCOFRPELAWC)
Maximise production output (MPO)
Production output
28
Increase Sales and profitability (IS&P)
Sales and profit gained
29
30
31
32
33
Better use of Technology From distribution system (BUTFDS)
Better use of financial assets (BUFA)
SUPPLY:
EQ = Enhance Quality
EELBIFHQAWC = Enhance Estee Lauder Brand Image for High
Quality Anti-Wrinkle cream
100% of output
maximization
20% increase in
revenue growth,
15% increase in
gaining profit
-
22
23
24
25
26
EL competitive position in
industry compare with the
competitors
Top leader
among other
competitors in
the industry
Customer
Perspective
LELAWC = Limited EL Anti-wrinkle creams (Day cream, Night
cream)
34
-
-
-
-
35
PRODUCTION:
LELAWC (DC,NC) = Limited EL Anti-Wrinkle Creams (Day,
36
68
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Cream, Night Cream) for Anti-Aging Market
ORP = Offer Reasonable Price
EQELAWC, DOT = Excellence Quality EL Anti-Wrinkle
Creams, Deliver On Time
EBV = Enhance Brand Value
37
38
39
Price/product unit
Percent of stock outs, Percent ontime deliver
Company position in the industry
compare with competitors
$79.99/set
80% of stock
outs,95%
Top leader
among other
competitor in
the industry
EELBIVAASB = Enhance Estee Lauder Brand Image Via its
Anti-Aging Skincare Brand
40
Company position in the industry
compare with competitors
Top leader
among other
competitor in
the industry
41
DISTRIBUTION :
OAUDS&TR = Only Available at Upscale Department Stores &
Revenues
Travel Retails
LELAWC (DC,NC) = Limited EL Anti-Wrinkle Creams (Day,
Cream, Night Cream)
DELAWCPOT = Deliver EL Anti-Wrinkle Cream Products on
Percent deliver on-time
Time
ORP = Offer Reasonable Price
Price/product unit
EQ = Excellence Quality
Percent stock outs
RISK MANAGEMENT
Enhance Quality from receiving high quality of raw materials Quality attributes measurement for
supplier
(EQHGRM)
42
43
44
45
46
47
48
69
Design Strategic Plan /SEM II/ 2012/2013
20%increase
95%
$79.99/set
80%
-
Estee Lauder Companies, Inc. – 2011
Lesser product return for EL Anti-Wrinkle Cream (LPRELAWC)
Increase reputation of EL Skincare Brand (IRELSB)
Offer Reasonable Price (ORP)
Enhance Quality from High Quality Inspection in Production
(EQHQIP)
49
50
51
52
53
Lesser product return for EL Anti-Wrinkle Cream (LPRELAWC)
Increase reputation of EL Skincare Brand (IRELSB)
Enhance Quality compliances
during delivery service
(EQCDS)
Lesser customer’s complaint (LCC)
Enhance Quality of EL-Anti Wrinkle Cream Products
(EQELAWCP)
54
55
56
57
58
Enhanced Products secured throughout distribution process
(EPSTDS)
Percent of products defect
Price/product unit
Quality attributes measurement for
end products
1-3%
$79.99/set
-
percent of products returned
4%
Revenue growth
Quality attributes in delivery
services
Percent of customers complaints
Percent of customers complaints
20%increase
-
Percent of defect rates experienced
by customers
5%
3-5%
3-5%
59
Improving communication and better cooperation (ICBC)
Increase the rate of EL Anti-Wrinkle Cream to be delivered
on time available only at Upscale Department Stores and
Travel Retails (IRPDOTUD&TR)
60
61
Increase reputation of EL Skincare Brand (IRELSB)
62
63
SUPPLY:
DSCEIT = Develop Strategic Competencies for Employees
Innovative Thinking
70
Design Strategic Plan /SEM II/ 2012/2013
Percent product deliver on-time
Revenue growth
Strategic skill coverage in key
innovative thinking position
95% products
deliver on-time
20% increase
90% skills
improved
Estee Lauder Companies, Inc. – 2011
DES&CCA QT= Develop Employees Skills & Competencies on
Quality & Assurance through Quality Training
64
ECA = Enhance Competitive Advantage
65
Learning & Growth
perspective
Strategic skill coverage in key
quality and assurance position
Position in the industry compare
with competitors
90% skills
improved
Top leader
among other
competitor in
the industry
66
QP&CAWCP = Quality Policies & Conformity on Anti-Wrinkle
Cream Products
67
CQCC = Create Quality-Centric Culture
68
69
PRODUCTION:
EETIQAAPANPL = Efficient Employees Training in Quality
Control & Assurance at Production Area for New Product Line
70
DQD,QP&SAPA = Develop Quality Documentation, Quality
Policies & Standards at Production Area
71
RCEFCIAPA = Retain Competence Employees for Continuously
Improvement at Production Area
IQMS,Q-CC = Improve Quality Management System, QualityCentric Culture
72
ITTFNPL = Improve Technology to Facilitate New Production
Line
GCATHQELAWCP, PELAWCP = Gain Competitive Advantage
73
74
71
Design Strategic Plan /SEM II/ 2012/2013
Percent of quality employees with
access to and knowledge of
quality policy and conformity
Employee culture survey for
quality centric
95%
accessibility
Percent of quality employees who
work effectively in quality area in
production
Percent of quality employees with
access to and knowledge of
quality policy and conformity
-
95%effectivenes
Peer review of current quality
management system and its
capabilities, Employee culture
survey for quality
Percent of product outputs with
effective technology integration
-
-
95%
accessibility
100%
Estee Lauder Companies, Inc. – 2011
through High Quality of EL Anti Wrinkle Cream Products, Patent
for EL Anti Wrinkle Cream Products
Position of the company in the
industry compare with
competitors, number of patents
Top leader
among other
competitor in
the industry
75
76
DISTRIBUTION:
CEIQDP = Competence Employees in Quality Control throughout
Distribution Process
77
DQTDFELAWCPDS = Develop quality training documentation
for EL Anti-Wrinkle Cream Products distribution system
78
IQMSIDP = Improve Quality Management System in Distribution
Process
79
CEDPI = Competence Employees in Distribution Process
Improvement
80
IDMS = Improve Distribution Management System
81
DMP&P = Distribution Management Policies and Procedures
ECFDIDP = Employees Skills for Fast Delivery in Distribution
Process
LTFDIIDP = Logistics Technology that facilitates delivery
Improvement in Distribution Process
82
83
72
Design Strategic Plan /SEM II/ 2012/2013
Strategic skill in key quality
control in distribution process
90% skills
improved
95%effectivenes
Percent of quality employees
capable of effective quality
management leadership
Peer review of current quality
management system in
distribution process
Percent of employees who work
effectively in distribution process
improvement
Peer review of current
distribution management system
Percent of employees with access
to the knowledge of distribution
policies and procedures
Strategic skill coverage in key fast
delivery in distribution process
Percent of products arrived on
time
-
95%effectivenes
95%
accessibility
95%
Estee Lauder Companies, Inc. – 2011
84
FIIELDS = Facilities Improvement in EL Distribution System
85
RISK MANAGEMENT:
Enhance Employees Skills in supplier Quality Control (EESISQC)
86
Supplier Quality Requirement Manual (SQRM)
87
Improve Supply Chain System (ISPCS)
88
Employees Optimum Skills Level in Technical and production
area (EOSLT&PA)
89
El anti-Wrinkle Cream Products specifications (ELAWCPS)
90
91
Improve Quality Management System (IQMS)
Enhance Employees Skills in delivery Service (EESIDS)
92
Technology improvement to facilitate delivery service (TITFDS)
93
Infrastructure delivering Improvement (IDI)
73
Design Strategic Plan /SEM II/ 2012/2013
Peer review of current facilities
improvement in distribution
system
-
Strategic skills in key quality
control for supplier
90% skills
improved
Percent of employees capable to
effectively access to and
knowledge of supplier
requirement
Peer review of current supply
chain system
Percent of employees who work
effectively in technical and
production area
Percent of employees capable to
effectively access to and
knowledge of products
specification
Peer review of current QMS
Strategic skills in delivery services
95%effectivenes
Peer review of current delivery
service infrastructures in terms of
its technology
Peer review of current delivery
-
95%effectivenes
95%effectivenes
90% skills
improved
-
Estee Lauder Companies, Inc. – 2011
94
Increase Employees Intellectual Capital (EIC)
95
Knowledge Management (KM)
96
Innovation Culture and Openness in sharing ideas (ICONSI)
97
Enhance Employees Skills in delivery Service (EESIDS
98
99
100
Standards and conformity Assessment
(S&CA)
Improve Distribution Management System (IDMS)
Enhance Employees Skills in Accounting and Finance (EESIAF)
101
Improve Financial Management System (IFMS)
74
Design Strategic Plan /SEM II/ 2012/2013
infrastructure
Strategic skills in key Intellectual
Capital position
90% skills
improved
Percent of employees capable to
effectively apply the knowledge
gained
Percent of suggestions for new
products and capabilities
Strategic skills in delivery service
95%effectivenes
Percent of employees effectively
apply the standards
Peer review of current IDMS
Percent of employees capable to
effectively access to and
knowledge of accounting and
finance
Peer review of current FMS
95%effectivenes
50% increase
90% skills
improved
95%effectivenes
-
Estee Lauder Companies, Inc. – 2011
8.0 Customer Management Process (CMP)
8.1 The Theme of CMP:
Strategy
CLS
Theme
Product Development
Establish a strong Customer relationship
management to effectively communicate with
EL Anti-Aging Skin care segment in China,
India and Brazil.
BLS
Focus – Best Value (Type 5)
Focus in anti-aging market target range of
age from 38 to 47 years old for EL new skin
care product line of EL Anti-Wrinkle cream
products.
8.2 Customer Selection Process
Define the objectives in Customer Selection Processes
Understand Anti-aging skin care segment in countries of China, India and Brazil.
Target High-End Customers of anti-aging market with range of age from 38 to 47 years old.
75
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Objective
Understand Anti-aging skin
care segment in countries of
China, India and Brazil.
Target High-End Customers of
anti-aging market with range of
age from 38 to 47 years old.
Balance Scorecard (BSC)
Measure
Target
Market share in Anti-aging
Target at least 60% in
skin care segment in China,
domestic market share
India and Brazil
Number of Strategic accounts
Target to increase 20% of
High-End customers from
anti-aging market in China,
India and Brazil
Linkage to Customer Acquisition
Customer management processes (Selection)
Objectives
Understand Anti-aging skin care segment in countries of
China, India and Brazil.
Target High-End Customers of anti-aging market with range of
age from 38 to 47 years old.
76
Design Strategic Plan /SEM II/ 2012/2013
Customer Acquisition
CVPHQELAWCP
PFSELAWCTANCFAAM
Estee Lauder Companies, Inc. – 2011
Note:
CVPHQELAWCP = Communicate Value Proposition for high quality EL Anti-Wrinkle Cream products
PFSELAWCTANCFAAM = Provide free samples of EL Anti Winkle cream for trial to acquire new customers from anti-aging market
Linkage to Financial Perspective
Customer management processes (Selection)
Objectives
Improve Sales Productivity
Financial Perspective
Expand Revenue Opp
Enhance Cust Value
Understand Anti-aging skin care segment in
countries of China, India and Brazil.
None
CNSRNCAAMCIB
None
Target High-End Customers of anti-aging market
with range of age from 38 to 47 years old.
None
IRHECAASCS
None
Note:
CNSRNCAAMCIB = Create New Source of Revenue from new customers of Anti-Aging Market in China, India and Brazil
IRHECAASCS = Increased revenue from High-End Customers of Anti-Aging Skin care segment
77
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Customer
management
processes (Selection)
Price
Objectives
Understand Antiaging skin care
segment in
countries of China,
India and Brazil.
Target High-End
Customers of antiaging market with
range of age from 38
to 47 years old.
None
None
Customer Perspective
Quality
Availability
Selection
Functionality
Service
Partnership
Brand
None
None
None
None
RFAASCSNCIB
None
EELBIVAASB
None
None
RFAASCSN
SELPBNCIB
EELBIVAASB
None
None
Note:
RFAASCSNCIB = Responding Faster to anti-aging skin care segment needs in China, India and Brazil
SELPBNCIB = Satisfy EL’ Partner business needs in China, India and Brazil
EELBIVAASB = Enhance Estee Lauder Brand Image Via its Anti-Aging Skincare Brand
78
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Learning and Growth
Customer management processes (Selection)
Objectives
Human Capital
Understand Anti-aging skin care segment in
countries of China, India and Brazil.
Target High-End Customers of anti-aging market
with range of age from 38 to 47 years old.
Learning and Growth
Information Capital
DECICRM
CR,D&T
ICRMD
DSCUAASCSCIB
DPAACKSMI&DS
ICRMD
Note:
DECICRM = Develop Employees Competencies in CRM
DSCUAASCSCIB = Develop Strategic competencies in understanding the anti-aging
market in China, India and Brazil
CR,D&T = CRM data and Technology
ICRMD = Improve CRM through database
DPAACKSMI&DS = Develop Portfolio of anti-aging Skin Care Segment Management
Information & Data System
79
Design Strategic Plan /SEM II/ 2012/2013
Organization Capital
Estee Lauder Companies, Inc. – 2011
8.3 Customer Acquisition Process
Define the objectives in Customer Acquisition Processes
Communicate Value Proposition for high quality EL Anti-Wrinkle Cream Products (linkage from Selection Process)
Provide free samples of EL Anti Winkle cream for trial to acquire new customers from anti-aging market (linkage from Selection Process)
Develop distributer relationship in China, India and Brazil (New Objective)
Objective
Communicate Value
Proposition for high quality EL
Anti-Wrinkle Cream Products
Balance Scorecard (BSC)
Measure
Target
Brand awareness (survey) for EL
Anti-wrinkle cream products
Target 90% of getting Brand
Equity for EL Anti-aging new
product line in China, India and
Brazil
Provide free samples of EL Anti
Winkle cream for trial to
acquire new customers from
anti-aging market
Develop distributor
relationship in China, India
and Brazil
80
Design Strategic Plan /SEM II/ 2012/2013
Free Sample units to allocate
Target for 150,000 units of ELAnti wrinkle cream Free Trial
Samples
Distributor Survey Feedback
100% target to fast responsive
towards the feedbacks
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Retention
Customer management processes
(Acquisition)
Objectives
Communicate Value Proposition for
high quality EL Anti-Wrinkle Cream
Products
Provide free samples of EL Anti Winkle
cream for trial to acquire new
customers from anti-aging market
Develop distributor relationship in
China, India and Brazil
Customer Retention
PTQELAWCP
Note:
PTQELAWCP = Provide the True Quality of EL Anti Wrinkle Cream Products
CHLC = Create Highly Loyal customers for EL High end customer s in Anti-aging skin care segment
VAP = Value-added Partner
81
Design Strategic Plan /SEM II/ 2012/2013
CHLC
None
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Customer management processes (Acquisition)
Objectives
Communicate Value Proposition for high quality EL
Anti-Wrinkle Cream Products
Provide free samples of EL Anti Winkle cream for trial
to acquire new customers from anti-aging market
Develop distributor relationship in China, India and
Brazil
Improve Sales Productivity
None
Financial Perspective
Expand Revenue Opp.
CNSRFELAWCP
None
CNSRHEAASCC
None
IELSCMS
Note:
CNSOFELAWCP =Create New Sources of Revenue from EL Anti Wrinkle Cream Products
CNSRHEAASCC = Create New Sources of Revenue from High-End Anti Aging Skin Care Customers
RLCOFSELAWCP = Rewarding Loyal Customers by offering free samples of EL Anti Wrinkle Cream Products
IELSCMS = Increase EL skin care market share
82
Design Strategic Plan /SEM II/ 2012/2013
Enhance Cust. Value
None
RLCOFSELAWCP
None
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Customer management processes
(Acquisition)
Objectives
Communicate Value Proposition for
high quality EL Anti-Wrinkle Cream
Products
Provide free samples of EL Anti Winkle
cream for trial to acquire new
customers from anti-aging market
Develop distributor relationship in
China, India and Brazil
Customer Perspective
Price
None
Quality
None
Availability
None
Selection
None
Service
None
Partnership
None
Brand
ESLBAVAASCB
None
None
None
None
PECS
ICAELAWCP
ESLBAVAASCB
None
None
None
None
None
OLPFELDCIB
ESLBAVAASCB
Note:
PECSP = Provide Excellence Customer Service
ICAELAWCP = Increase Customer Awareness on EL Anti-wrinkle cream Products
OLPELDCIB = Offer Lower Price for Estee Lauder Distributors In China, India and Brazil
ESLBAVAASCB = Enhance Estee Lauder Brand Awareness Via its Anti Aging Skin care Brand
83
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Learning and Growth
Customer management processes
(Acquisition)
Objectives
Communicate Value Proposition for
high quality EL Anti-Wrinkle Cream
Products
Provide free samples of EL Anti
Winkle cream for trial to acquire
new customers from anti-aging
market
Develop distributor relationship in
China, India and Brazil
Learning and Growth
Human Capital
DESCMRT
Information Capital
CRM database
integration
Organization Capital
CRM, QCC
DESCSM
IKS
IKM
Develop Training
Program for
Dealers
Note:
DESCMRT = Develop employees Strategic Competencies in Marketing and Research Team
CRMDI = CRM Database Integration
DTD = Distributor Training documentation,
IKS = Improve Knowledge Sharing
IKM = Improve Knowledge Management
DESCSM = Develop employees Skills and Competencies in sales and marketing
CRM, QCC = Customer Relationship Management, Quality Centric Culture
84
Design Strategic Plan /SEM II/ 2012/2013
QCC
Estee Lauder Companies, Inc. – 2011
8.4 Customer Retention Process
Define the objectives in Customer Retention Processes
Provide the True Quality of EL Anti Wrinkle Cream Products (Linkage from Customer Acquisition Process)
Create Highly Loyal customers for EL High end customers in Anti-aging skin care segment (Linkage from Customer Acquisition Process)
Value-added Partner (Linkage from Customer Acquisition Process)
Objective
Provide the True Quality of EL
Anti Wrinkle Cream Products
Balance Scorecard (BSC)
Measure
Customer Feedback (Survey)
Target
Target to 100% increase in creating
customer satisfaction on EL Antiwrinkle cream product quality
Create Highly Loyal customers
for EL High end customers in
Anti-aging skin care segment
Value-added Partner
85
Design Strategic Plan /SEM II/ 2012/2013
Percent of sales captured of antiaging skin care segment purchase
EL Anti wrinkle Cream Products
Customer Lifetime Value
Target to improve sales with up
to15% for anti-aging skin care
segment
None
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Growth
Customer management processes (Retention)
Objectives
Provide the True Quality of EL Anti Wrinkle Cream Products
Create Highly Loyal customers for EL High end customers in
Anti-aging skin care segment
Value-added Partner
Linkage to Financial Perspective
Customer management processes (Retention)
Objectives
Provide the True Quality of EL Anti Wrinkle Cream
Products
Create Highly Loyal customers for EL High end
customers in Anti-aging skin care segment
Value-added Partner
Customer Growth
None
Focus on Solution Selling
Strategy
Partner with EL Anti-wrinkle
Crea produ t’s Custo er
Improve Sales Productivity
None
IRELHQAWCP
RCTLP
None
IELFNPAASCS
ILTVP
IRELHQAWCP = Increase revenue from EL High quality of Anti-Wrinkle cream Products
IELFNPAASCS = Increase EL Future Net Profit on Anti-Aging Skin care segment
RCTLP = Rewarding Customers through Loyalty Program
ILTVP = Increase Lifetime Value with Partner
Design Strategic Plan /SEM II/ 2012/2013
Enhance Cust. Value
None
None
Note:
86
Financial Perspective
Expand Revenue Opp.
IRELHQAWCP
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Customer management processes (Retention)
Objectives
Provide the True Quality of EL Anti Wrinkle
Cream Products
Create Highly Loyal customers for EL High
end customers in Anti-aging skin care
segment
Value-added Partner
Customer Perspective
Service
Partnership
TDOZD
None
Brand
FRES
None
EBLHRVAASCB
EBLHRVAASCB
None
MER
EBLHRVAASCB
Note:
TDOZD = The delivery of Zero defects
MER = Maintain Excellence Relationship
FRES = Fast service responsive with excellence service
EBLHRVAASCB = Enhance Brand Loyalty with High Reputation Via its High quality Anti-aging skin care brand
87
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Learning and Growth
Customer management
processes (Retention)
Objectives
Provide the True Quality of EL
Anti Wrinkle Cream Products
Create Highly Loyal
customers for EL High end
customers in Anti-aging skin
care segment
Value-added Partner
Learning and Growth
Human Capital
ARTTCMHQELAWCP
Information Capital
RHEC
Organization Capital
CCCC
ARTTCMHQELAWCP
RHEC
CCCC
CPGA
PIA
CIC
Note:
CCCC = Create Customer-Centric Culture klop;
RHEC = Records of High-End Customers
CPGA = Create Personel Goal Alignment
PIA = Partner’s information and Agreement
ARTTCMHQELAWCP = Attract and Retain Top Talent for continuously maintain high quality EL Ani Wrinkle cream products
CIC = Continuous Improvement Culture
88
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
8.5 Customer Growth Process
Define the objectives in Customer Growth Processes
Focus on Solution Selling Strategy (Linkage from Retention Process)
Partner with EL Anti-wri kle Crea produ t’s Custo er (Linkage from Retention Process)
Standardization of customer service in China, India , brazil (New Objective)
Objective
Balance Scorecard (BSC)
Measure
Target
Percent of sales in China,
India and Brazil
Number of gain sharing
agreement
Target to increase sales up to
15 %
None
Customers feedback
(survey)
Increase 100% efficient
customer service of EL anti
Wrinkle cream in China,
India and Brazil
Focus on Solution Selling Strategy
Partner with EL Anti-wrinkle Cream
product’s Custo er
Standardization of customer service
in China, India , brazil
89
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Customer management processes (Growth)
Objectives
Focus on Solution Selling Strategy
Partner with EL Anti-wri kle Crea product’s
Customer
Standardization of customer service in China, India ,
brazil
Improve Sales Productivity
None
None
None
Note:
CNSRELAWCP = Create new source of revenue from EL Anti-Wrinkle cream products
IRLC = Increase revenue from loyal customers
ICS = Increase Customer Satisfaction
RCSE = Rewarding Customer Service Excellence
90
Design Strategic Plan /SEM II/ 2012/2013
Financial Perspective
Expand Revenue Opp.
CNSRELAWCP
IRLC
IRLC
Enhance Cust. Value
None
ICS
RCSE
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Customer management
processes (Growth)
Customer Perspective
Objectives
Focus on Solution Selling
Strategy
Partner with EL Anti-wrinkle
Crea product’s Custo er
Standardization of customer
service in China, India , brazil
Price
Quality
Availability
Selection
Functionality
Service
Partnership
Brand
None
None
None
None
None
EBCS
None
IBRBLVHQELAWCP
None
None
None
None
None
None
MEC&R
IBRBLVHQELAWCP
None
None
None
None
None
ECS
None
IBRBLVHQELAWCP
Note:
EBCS = Excellence Beauty Consultation Service
MEC&R = Maintain Excellence Communication and Relationship
ECS = Excellence Customer Service
IBRBLVHQELAWCP = Improve Brand Recognition and Brand Loyalty via High Quality EL Anti-Aging Skin Care products
91
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Linkage to Learning and Growth
Customer management
processes (Growth)
Objectives
Focus on Solution Selling
Strategy
Partner with EL Anti-wrinkle
Crea product’s Custo er
Standardization of customer
service in China, India , brazil
Learning and Growth
Human Capital
Information Capital
DECSSS
IKS
Organization Capital
IKM, CRM
None
None
CPGA
ESCSCF
TFECS
CCC
Note:
DECSSS = Develop Employees competencies in solution selling strategies
IKS = Increase Knowledge Sharing
IKM , CRM = Improve Knowledge Management, Customer Relationship Management
CPGA = Create Personal Goal Alignment
ESCSCF = Employees skills and competencies in customer service field
TFECS = Technology that facilitates effective customer service
92
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
Summarizing the objectives Customer Management Processes
No
Customer
Management
Processes
Objectives
Measure
Target
1
Understand Anti-aging skin care segment
in countries of China, India and Brazil.
Market share in Anti-aging skin care segment in
China, India and Brazil
Target at least 60% in
domestic market share
2
Target High-End Customers of anti-aging
market with range of age from 38 to 47
years old.
Number of Strategic accounts
Communicate Value Proposition for high
quality EL Anti-Wrinkle Cream Products
Brand awareness (survey) for EL Anti-wrinkle
cream products
Target to increase 20% of
High-End customers from
anti-aging market in China,
India and Brazil
Target 90% of getting Brand
Selection
3
Equity for EL Anti-aging
new product line in China,
India and Brazil
4
Provide free samples of EL Anti Winkle
cream for trial to acquire new customers
from anti-aging market
Free Sample units to allocate
Distributor Feedback (Survey)
5
Acquisition
Develop distributor relationship in China,
India and Brazil
Provide the True Quality of EL Anti
Wrinkle Cream Products
6
Retention
93
Design Strategic Plan /SEM II/ 2012/2013
Target for 150,000 units of
EL-Anti wrinkle cream Free
Trial Samples
100% target to fast
responsive towards the
feedbacks
Customer Feedback (Survey)
Target to 100% increase in
creating customer
Estee Lauder Companies, Inc. – 2011
satisfaction on EL Antiwrinkle cream product
quality
Create Highly Loyal customers for EL
High end customers in Anti-aging skin care
segment
7
Value-added Partner
Focus on Solution Selling Strategy
8
9
Percent of sales captured of anti-aging skin care
segment purchase EL Anti wrinkle Cream
Products
Customer Lifetime Value
Percent of sales in China, India and Brazil
Partner with EL Anti-wrinkle Cream
product’s Customer
10
Number of gain sharing agreement
Target to improve sales with
up to15% for anti-aging skin
care segment
None
Target to increase sales up to
15 %
None
11
Growth
94
Standardization of customer service in
China, India , brazil
Design Strategic Plan /SEM II/ 2012/2013
Customers feedback (survey)
Increase 100% efficient
customer service of EL anti
Wrinkle cream in China,
India and Brazil
Estee Lauder Companies, Inc. – 2011
Summarizing the objectives Customer Management Processes Linkages
No
Processes
1
3
7
8
9
Financial Perspective
Objectives
SELECTION :
CNSRNCAAMCIB = Create New Source of Revenue from new
customers
IRHECAASCS =Increased revenue from High-End Customers of AntiAging Skin care segment
ACQUISITION:
CNSOFELAWCP =Create New Sources of Revenue from EL Anti
Wrinkle Cream Products
CNSRHEAASCC = Create New Sources of Revenue from High-End
Anti Aging Skin Care Customers
RLCOFSELAWCP = Rewarding Loyal Customers by offering free
samples of EL Anti Wrinkle Cream Products
IELSCMS = Increase EL skin care market share
RETENTION:
IRELHQAWCP = Increase revenue from EL High quality of AntiWrinkle cream Products
IELFNPAASCS = Increase EL Future Net Profit on Anti-Aging Skin care
segment
RCTLP = Rewarding Customers through Loyalty Program
ILTVP = Increase Lifetime Value with Partner
GROWTH
CNSRELAWCP = Create new source of revenue from EL Anti-Wrinkle
cream products
IRLC = Increase revenue from loyal customers
ICS = Increase Customer Satisfaction
10
13
14
15
17
19
20
21
95
Design Strategic Plan /SEM II/ 2012/2013
Measure
Target
Revenue from new customers
20% increase
Revenue growth Revenue from EL
Anti Wrinkle Cream Products
20% increase
Revenue growth Revenue from EL
Anti Wrinkle Cream Products
Revenue from High-End Anti Aging
Skin Care Customers
Number of free samples distributed
20% increase
Market share
revenue from EL High quality of AntiWrinkle cream Products
20% increase
Target for 150,000
units of EL-Anti
wrinkle cream Free
Trial Samples
15% increase
20 % increase
-
Lifetime value
revenue from EL Anti-Wrinkle cream
products
revenue from loyal customers
Customers feedback (survey) for level
of satisfaction
20% increase
10% increase
100% of customer
satisfaction level
Estee Lauder Companies, Inc. – 2011
RCSE = Rewarding Customer Service Excellence
CNSRELAWCP = Create new source of revenue from EL Anti-Wrinkle
cream products
22
23
SELECTION:
RFAASCSNCIB = Responding Faster to anti-aging skin care segment
needs in China, India and Brazil
SELPBNCIB = Satisfy EL’ Partner business needs in China, India and
Brazil
26
27
EELBIVAASB = Enhance Estee Lauder Brand Image Via its Anti-Aging
Skincare Brand
28
ACQUISITION:
PECSP = Provide Excellence Customer Service
37
Customer Perspective
ICAELAWCP = Increase Customer Awareness on EL Anti-wrinkle
cream Products
OLPELDCIB = Offer Lower Price for Estee Lauder Distributors In
China, India and Brazil
ESLBAVAASCB = Enhance Estee Lauder Brand Awareness Via its Anti
Aging Skin care Brand
38
39
40
45
RETENTION:
TDOZD = The delivery of Zero defects
46
MER = Maintain Excellence Relationship
96
Design Strategic Plan /SEM II/ 2012/2013
revenue from EL Anti-Wrinkle cream
products
-
Customers feedbacks (survey ) for
satisfaction level among EL business
partner
Competitive position in the industry
compare to competitors
Index of product or service offerings
measuring percent of customer needs
covered
Percent of customer awareness on new
products
Customer’s cost of ownership
Competitive position in the industry
compare to competitors
Percent of defects rates experienced by
customers
Customer feedback (survey) for
20% increase
100% of customer
satisfaction level
Target to be the leader
for skincare companies
in the industry to
provide latest skin care
technology
-
100% of customer
awareness
5% decrease
Target to be the leader
for skincare companies
in the industry to
provide latest skin care
technology
99% of products
arrived without any
defects
100% of satisfied
Estee Lauder Companies, Inc. – 2011
47
FRES = Fast service responsive with excellence service
48
EBLHRVAASCB = Enhance Brand Loyalty with High Reputation Via
its High quality Anti-aging skin care brand
55
56
GROWTH:
EBCS = Excellence Beauty Consultation Service
MEC&R = Maintain Excellence Communication and Relationship
56
ECS = Excellence Customer Service
58
IBRBLVHQELAWCP = Improve Brand Recognition and Brand Loyalty
via High Quality EL Anti-Aging Skin Care products
SELECTION :
DECICRM = Develop Employees Competencies in CRM
63
DSCUAASCSCIB = Develop Strategic competencies in understanding
the anti-aging market in China, India and Brazil
CR,D&T = CRM data and Technology
64
65
66
67
Learning & Growth
perspective
68
70
71
97
ICRMD = Improve CRM through database
DPAACKSMI&DS = Develop Portfolio of anti-aging Skin Care
Segment Management Information & Data System
Records of Valued Customers, Increase Knowledge Sharing,
ACQUISITION:
DESCMRT = Develop employees Strategic Competencies in Marketing
and Research Team
Design Strategic Plan /SEM II/ 2012/2013
satisfaction level
Percent on time deliver
Competitive position in the industry
compare to competitors
customer
99% of products
delivered on time
Target to be the leader
for skincare companies
in the industry to
provide latest skin care
technology
Market share
Customer feedback (survey) related to
communication and relationship
Customers feedback (survey) related to
customer service satisfaction level
Position in the industry compare to
competitors
15% increase
100% of satisfied
customer
100% of satisfied
customers
Target to be the leader
for skincare companies
in the industry to
provide latest skin care
technology
Strategic competencies in key CRM
position
Human capital readiness
90% increase
90% increase
Percent of employees with access to
and knowledge of CRM data and
advanced technology
90% increase
Customer application portfolio
readiness
-
90% increase
Strategic skill coverage in key
marketing and research
90% increase
Estee Lauder Companies, Inc. – 2011
72
CRMDI = CRM Database Integration
73
DTD = Distributor Training documentation,
74
IKS = Improve Knowledge Sharing
75
76
IKM = Improve Knowledge Management
DESCSM = Develop employees Skills and Competencies in sales and
marketing
CRM, QCC = Customer Relationship Management, Quality Centric
Culture
77
80
RETENTION:
81
82
83
CCCC = Create Customer-Centric Culture;
RHEC = Records of High-End Customers
CPGA = Create Personel Goal Alignment
84
85
PIA = Partner’s information and Agreement
ARTTCMHQELAWCP = Attract and Retain Top Talent for
continuously maintain high quality EL Ani Wrinkle cream products
CIC = Continuous Improvement Culture
GROWTH:
DECSSS = Develop Employees competencies in solution selling
strategies
IKS = Increase Knowledge Sharing
86
87
88
IKM , CRM = Improve Knowledge Management, Customer Relationship
Management
CPGA = Create Personal Goal Alignment
89
90
98
Design Strategic Plan /SEM II/ 2012/2013
Percent of employees with access to
and knowledge of CRM database
integration
Percent of employees capable of
effective training in distribution
90% increase
100% of capable
employees in
distribution
90% increase
Human capital readiness to share
knowledge
Strategic competencies in sales and
marketing
Human capital readiness to effectively
apply CRM , Employee culture survey
for quality
90% increase
90& increase
Employee culture survey for quality
Percent of employees objectives linked
to BSC customer process and outcome
measures
-
90%
Peer review of current culture
-
Human capital readiness in solution
selling strategies
Human capital readiness to Share
knowledge
-, Human capital readiness to
effectively apply CRM
Percent of employees objectives linked
90% increase
90% increase
90% increase
90%
Estee Lauder Companies, Inc. – 2011
91
ESCSCF = Employees skills and competencies in customer service field
92
TFECS = Technology that facilitates effective customer service
to BSC customer process and outcome
measures
Human capital readiness in customer
service field
Percent of employees capable of
effective project management
leadership in technology management
90% increase
100% of capable in
project management
leadership
9.0 Innovation Process (IP)
9.1 The Theme of IP:
Strategy
CLS
Theme
Product Development
Produce high quality of EL Anti wrinkle
cream Products using the latest innovativetechnology to market the product in China,
India and Brazil
BLS
Focus – Best Value (Type 5)
Emphasizes on EL anti-aging skin care
market needs target age range from 38 to 47
years old.
99
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
9.1.1 Identify the Opportunities
Define the objectives in identifying the opportunities
Anticipate customers demands of Anti-Aging Skin care products.
Discover new anti-aging products, high quality and more effective.
Objective
Anticipate customers
demands of Anti-Aging
Skin care products.
Discover new anti-aging
products, high quality and
more effective.
100
Design Strategic Plan /SEM II/ 2012/2013
Balance Scorecard (BSC)
Measure
Target
Time spent with anti aging
Allocate maximum hours per
skin care segment at targeted
day to understand the
accounts learning about their
targeted market, based on
needs and future
research needs
opportunities
Number of new value-added
Target to provide high
services identified
quality Gift set Assembly for
EL anti-Wrinkle skincare
products
Estee Lauder Companies, Inc. – 2011
Linkage to Manage the Portfolio
Innovation Processes (Opportunity
ID)
Objectives
Anticipate customers demands of
Anti-Aging Skin care products.
Discover new anti-aging products,
high quality and more effective.
Manage the Portfolio
Actively manage EL Antiwrinkle cream skin care
products portfolio for superior
quality and innovation
Extend EL-Anti wrinkle cream products portfolio
through collaboration with EL business partner
Linkage to Financial Perspective
Innovation Processes (Opportunity ID)
Objectives
Anticipate customers demands of Anti-Aging Skin
care products.
Discover new anti-aging products, high quality and
more effective.
Linkage to Customer Perspective
101
Design Strategic Plan /SEM II/ 2012/2013
Manage Total LifeCycle Production
Costs
None
Seeking Opportunity
to reduce
manufacturing cost
Financial Perspective
Revenues from New
Products
None
Gross Margins:
New Products
None
None
None
Estee Lauder Companies, Inc. – 2011
Innovation Processes (Opportunity ID)
Objectives
Customer Perspective
High-Performance Products
First to Market
Anticipate customers demands of Anti-Aging
Skin care products.
Discover new anti-aging products, high
quality and more effective.
Focus on offering specific
performance attributes such
as on its size, ease-of-use and
effective period rate
None
None
Extend into New
Markets
None
None
None
Linkage to Learning and Growth Perspective
Innovation Processes (Opportunity ID)
Objectives
Anticipate customers demands of AntiAging Skin care products.
Discover new anti-aging products, high
quality and more effective.
102
Learning and Growth Perspective
Multidisciplinary Skills
Technology to explore,
integrate & speed to
market
Develop effective
None
interdisciplinary and crossfunctional teams throughout
innovation process
Develop effective
None
interdisciplinary and crossfunctional teams throughout
innovation process
Design Strategic Plan /SEM II/ 2012/2013
A Culture of
Creativity and
Innovation
Foster A culture of
innovation
Foster A culture of
innovation
Estee Lauder Companies, Inc. – 2011
9.1.2 Manage the Portfolio
Define the objectives in manage the portfolio
Actively manage EL Anti-wrinkle cream skin care products portfolio for superior quality and innovation (Linkage from
Opportunity ID)
Extend EL-Anti wrinkle cream products portfolio through collaboration with EL business partners (Linkage from
Opportunity ID)
Objective
Actively manage EL Antiwrinkle cream skin care
products portfolio for
superior quality and
innovation.
Balance Scorecard (BSC)
Measure
Target
Technology ranking
Target to be the leader in skincare industry
(independent peer review of in the industry by providing the latest skin
current anti-aging technology
care technology
capabilities )
Extend EL-Anti wrinkle
cream products portfolio
through collaboration with
EL business partner
.
.
103
Design Strategic Plan /SEM II/ 2012/2013
Revenue growth
20 % of Revenue growth increase
Estee Lauder Companies, Inc. – 2011
Linkage to Design and Develop
Innovation Processes (Manage the Portfolio)
Objectives
Actively manage EL Anti-wrinkle cream skin care products
portfolio for superior quality and innovation.
Design and Develop
Manage EL Anti-Wrinkle
cream’s portfolio
Extend EL-Anti wrinkle cream products portfolio through
collaboration with EL business partner
.
Reduce development cycle time of
EL Anti wrinkle cream products
Linkage to Financial Perspective
Innovation Processes (Manage the Portfolio)
Objectives
Actively manage EL Anti-wrinkle cream skin care products
portfolio for superior quality and innovation.
Extend EL-Anti wrinkle cream products portfolio through
collaboration with EL business partner
104
Design Strategic Plan /SEM II/ 2012/2013
Financial Perspective
Manage Total LifeRevenues from
Cycle Production Costs
New Products
None
None
None
None
Gross Margins:
New Products
None
None
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Innovation Processes (Manage the Portfolio)
Objectives
Actively manage EL Anti-wrinkle cream skin
care products portfolio for superior quality and
innovation.
Extend EL-Anti wrinkle cream products
portfolio through collaboration with EL
business partner
.
High-Performance
Products
None
Improve Quality
attributes of El antiwrinkle skin care cream
products
Customer Perspective
First to Market
High Innovative antiaging technology in the
market
None
Extend into New
Markets
None
None
Linkage to Learning and Growth Perspective
Innovation Processes (Manage
the Portfolio)
Objectives
Learning and Growth Perspective
Multidisciplinary Skills
Actively manage EL Antiwrinkle cream skin care products
portfolio for superior quality and
innovation.
Employees achieve deep functional
expertise in managing the portfolio
thorough innovation process
Extend EL-Anti wrinkle cream
products portfolio through
Employees achieve deep functional
expertise in maintain good
105
Design Strategic Plan /SEM II/ 2012/2013
Technology to
explore, integrate,
and speed to market
None
A Culture of Creativity and
Innovation
Use technology to
facilitate portfolio
Foster a culture of leading
knowledge from scientific
Foster a culture of
innovation
Estee Lauder Companies, Inc. – 2011
collaboration with EL business
partner
.
collaboration between business
partners
managing process
and technological
community
9.1.3 Design and Develop
Define the objectives in design and develop
Manage EL Anti-Wrinkle cream’s portfolio (Linkage from Manage the Portfolio)
Reduce Development Cycle Time of EL Anti wrinkle Cream products (Linkage from Manage the Portfolio)
Reduce Development costs of EL Anti wrinkle cream products (New Objective)
Objective
Measure
Manage EL Anti-Wrinkle cream’s portfolio
Reduce Development Cycle Time of EL Anti
wrinkle Cream products
Reduce Development costs of EL Anti wrinkle
cream products
106
Balance Scorecard (BSC)
Target
Patent
Target to patent the product idea of EL Anti-Wrinkle
cream
Number of projects delivered on
time throughout the development
stages
Actual versus budgeted spending
on projects at each development
stage
100% of projects delivered on time
Design Strategic Plan /SEM II/ 2012/2013
Target to achieve 100% of projects achieve budget
targeting
Estee Lauder Companies, Inc. – 2011
Linkage to Launch
Innovation Processes (Design and Develop)
Objectives
Manage EL Anti-Wrinkle cream’s portfolio
Reduce Development Cycle Time of EL Anti wrinkle Cream
products
Reduce Development costs of EL Anti wrinkle cream products
Launch
Rapid launch of EL
anti-Wrinkle
Cream Products
None
None
None
None
Effective
Production of EL
anti wrinkle Cream
products
None
None
None
Linkage to Financial Perspective
Innovation Processes (Design and Develop)
Objectives
Manage EL Anti-Wrinkle cream’s portfolio
Reduce Development Cycle Time of EL Anti wrinkle Cream
products
Reduce Development costs of EL Anti wrinkle cream products
107
Design Strategic Plan /SEM II/ 2012/2013
Financial Perspective
Manage Total LifeRevenues from
Cycle Production
New Products
Costs
Return on R&D
None
investments for a
product patent
Lowering the costs of
None
production
Lowering the costs of
None
production
Gross Margins:
New Products
None
None
None
Estee Lauder Companies, Inc. – 2011
Linkage to Customer Perspective
Innovation Processes (Design and Develop)
Objectives
Manage EL Anti-Wrinkle cream’s portfolio
Reduce Development Cycle Time of EL Anti wrinkle Cream
products
Reduce Development costs of EL Anti wrinkle cream products
Customer Perspective
High-Performance
First to Market
Products
Innovative features
None
with high quality
performance
None
None
None
None
Extend into
New Markets
None
None
None
Linkage to Learning and Growth Perspective
Innovation Processes (Design and
Develop)
Objectives
Manage EL Anti-Wrinkle cream’s
portfolio
Reduce Development Cycle Time of EL
Anti wrinkle Cream products
108
Learning and Growth Perspective
Multidisciplinary Skills
High R&D employees
competencies in computer
technology for simulation and
virtual prototyping in
innovation process
High R&D employees
competencies in computer
technology for simulation and
virtual prototyping in
innovation process
Design Strategic Plan /SEM II/ 2012/2013
Use Technology to
explore, integrate, and
speed to market
Deploy computer
technology for simulation
and virtual prototyping for
EL Anti wrinkle Cream
product
Deploy computer
technology for simulation
and virtual prototyping for
EL Anti wrinkle Cream
product
A Culture of
Creativity and
Innovation
Develop a culture of
leading knowledge
from scientific and
technological
community
Develop a culture of
leading knowledge
from scientific and
technological
community
Estee Lauder Companies, Inc. – 2011
Reduce Development costs of EL Anti
wrinkle cream products
High R&D employees
competencies in computer
technology for simulation and
virtual prototyping in
innovation process
Deploy computer
technology for simulation
and virtual prototyping for
EL Anti wrinkle Cream
product
Develop a culture of
leading knowledge
from scientific and
technological
community
9.1.4 Launch
Define the objectives in Launch
Rapid launch of EL anti-Wrinkle Cream Products; (Linkage from Design and Develop)
Effective Production of EL anti wrinkle Cream products. (Linkage from Design and Develop)
Objective
Rapid launch of EL antiWrinkle Cream Products
Effective Production of EL
anti wrinkle Cream products
109
Design Strategic Plan /SEM II/ 2012/2013
Balance Scorecard (BSC)
Measure
Target
Revenue growth
20 % revenue growth
increase from China, India
and Brazil
Consumer satisfaction or
95 % target for meeting
complaints about EL Anti
customers satisfaction
wrinkle cream products
launched
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Innovation Processes (Launch)
Objectives
Financial Perspective
Manage Total LifeRevenues from New
Cycle Production
Products
Costs
Rapid launch of EL anti-Wrinkle Cream Products
None
Revenues from EL
Anti-Wrinkle Cream
products from new
customers in China,
India and Brazil
Effective Production of EL anti wrinkle Cream products Lowering maintenance
None
costs and disposal
costs
Gross Margins:
New Products
None
None
Linkage to Customer Perspective
Innovation Processes (Launch)
Objectives
Rapid launch of EL anti-Wrinkle Cream Products
Effective Production of EL anti wrinkle Cream
products
110
Design Strategic Plan /SEM II/ 2012/2013
Customer Perspective
High-Performance
First to Market
Extend into New
Products
Markets
enhance products
Innovative
Focus of Anti-aging
functionality for aging
technology
market in China, India
skin to customers
skincare leader
and Brazil
of anti-aging
skincare
product
High quality of EL antiNone
None
wrinkle cream products
Estee Lauder Companies, Inc. – 2011
Linkage to Learning and Growth Perspective
Innovation Processes (Launch)
Objectives
Rapid launch of EL anti-Wrinkle Cream
Products
Effective Production of EL anti wrinkle
Cream products
111
Learning and Growth Perspective
Multidisciplinary Skills
Technology to explore,
integrate, and speed to
market
R&D employees competencies in Use technology for rapid
performing effective CDA/CAM
product launch
integration
R&D employees competencies in
performing effective CDA/CAM
integration
Design Strategic Plan /SEM II/ 2012/2013
Use technology for rapid
product launch
A Culture of
Creativity and
Innovation
Foster employees
culture of
innovation and
change
Foster employees
culture of
innovation and
change
Summary of objectives of Innovation Processes
No.
1.
2.
3.
Innovation Process
Identify
Opportunity
Manage the
portfolio
4.
5.
Design and
Develop
6.
7.
8.
Launch
9.
10.
11.
12.
13.
14.
Financial
Perspective
Objectives
Anticipate customers demands of Anti-Aging
Skin care products.
Discover new anti-aging products, high quality
and more effective.
Measurement
Time spent with anti aging skin care segment at
targeted accounts learning about their needs and
future opportunities
Number of new value-added services identified
Target
Allocate maximum hours per day to
understand the targeted market, based
on research needs
Target to provide high quality Gift set
Assembly for EL anti-Wrinkle
skincare products
To be the leader in skincare industry
by providing the latest skin care
technology
Actively manage EL Anti-wrinkle cream skin care
products portfolio for superior quality and
innovation.
Technology ranking (independent peer review of
current anti-aging technology capabilities )
Extend EL-Anti wrinkle cream products portfolio
through collaboration with EL business partner
Revenue growth
20 % Revenue growth
Patents
Target to patent the product idea of EL
Anti-Wrinkle cream
100% of projects delivered on time
Manage EL Anti-Wrinkle cream’s portfolio
Reduce Development Cycle Time of EL Anti
wrinkle Cream products
Reduce Development costs of EL Anti wrinkle
cream products
Rapid launch of EL anti-Wrinkle Cream Products
Number of projects delivered on time throughout
the development stages
Actual versus budgeted spending on projects at
each development stage
Sales growth
Effective Production of EL anti wrinkle Cream
products
Seeking Opportunity to reduce manufacturing cost
Return on R&D investments for a product patent
Lowering the costs of production
Lowering maintenance costs and disposal costs
Revenues from EL Anti-Wrinkle Cream products
from new customers in China, India and Brazil
Consumer satisfaction or complaints about EL
Anti wrinkle cream products launched
Compare with previous performance
Amount of investment in R&D
Production costs
Maintenance and disposal costs
Revenues from EL Anti-Wrinkle Cream
products from new customers in China, India
and Brazil
Target to achieve 100% of projects
achieve budget targeting
20 % sales growth from China, India
and Brazil
95 % target for meeting customers
satisfaction
15% decrease
20% increase (compare to year before)
15% decrease
15% decrease
20% increase in revenue growth
[MR111037]
15.
Customer
Perspective
16.
17.
18.
19.
20.
21.
22.
23.
24.
Learning and
Growth
Perspective
Focus on offering specific performance attributes
such as on its size, ease-of-use and effective
period rate
High Innovative anti-aging technology in the
market
Improve Quality attributes of El anti-wrinkle skin
care cream products
Innovative features with high quality performance
enhance products functionality for aging skin to
customers
Innovative technology skincare leader of antiaging skincare product
Focus of Anti-aging market in China, India and
Brazil
High quality of EL anti-wrinkle cream products
Develop effective interdisciplinary and crossfunctional teams throughout innovation process
Foster A culture of innovation
Employees achieve deep functional expertise in
managing the portfolio thorough innovation
process
Foster a culture of leading knowledge from
scientific and technological community
Use technology to facilitate portfolio managing
process
High R&D employees competencies in computer
technology for simulation and virtual prototyping
in innovation process
Deploy computer technology for simulation and
virtual prototyping for EL Anti wrinkle Cream
product
Develop a culture of leading knowledge from
scientific and technological community
25.
26.
27.
28.
29.
30.
113
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
-
-
Acquiring and retaining customers
25% increase
Acquiring and retaining customers
25% increase
Lead time relative to competitors
Acquiring and retaining customers
25% increase
Lead time relative to competitors
25% increase
Acquiring and retaining customers
25% increase
Acquiring and retaining customers
Strategic skills coverage in effective
interdisciplinary
Number of suggestions for new products and
capabilities
Percent of employees who work effectively in
managing the portfolio thorough innovation
process
Number of new ideas from external sources
25% increase
-
Percent of product launched with effective
portfolio managing process
Percent of R&D employees with access to and
knowledge of simulation and virtual prototyping
Percent of R&D employees with access to and
knowledge of advanced modelling tools
Number of ideas from external sources
50 suggestions per meeting session
100% of effective employees in
managing the portfolio
100% of effective portfolio managing
process
90% increase
90%increase
-
[MR111037]
R&D employees competencies in performing
effective CDA/CAM integration
Use technology for rapid product launch
31.
32.
Foster employees culture of innovation and
change
33.
Estee Lauder Companies, Inc. – 2011
Percent of products launched with effective
CAD/CAM integration
Percent of products launched with effective
CAD/CAM integration
Employee culture survey for innovation and
change
90% of effective CAD/CAM
integration
90% of effective CAD/CAM
integration
-
10.0 Regulatory and social process
10.1 The Theme of Regulatory and social process:
Strategy
CLS
Product Development
Reduce environmental impact throughout EL
anti Wrinkle Cream product’s life cycle
BLS
Focus – Best Value (Type 5)
Increase use of recycled materials for Anti
Wrinkle Cream’s packaging with easy
recyclability
114
Theme
Design Strategic Plan /SEM II/ 2012/2013
[MR111037]
Estee Lauder Companies, Inc. – 2011
10.1.1 Environmental practices
Define the objectives of Environmental Performance
Reduce energy and resource consumption for EL Anti wrinkle cream production
Increase use of consumer recycled materials in product packaging of EL Anti Wrinkle cream
Objective
Reduce energy and
resource consumption in
producing EL Anti wrinkle
cream products
Increase use of consumer
recycled materials in
product packaging of EL
Anti Wrinkle cream
products
115
Design Strategic Plan /SEM II/ 2012/2013
Balance Scorecard (BSC)
Measure
Target
Total joules of energy
15% reduce of energy
consumption
consumption
Percent of recycled material
used for packaging
Target to 60% of EL Anti
Wrinkle packaging material
from recycled material
[MR111037]
Estee Lauder Companies, Inc. – 2011
Linkage to Safety and Health
Environmental Performance objectives
Reduce energy and resource consumption in producing
EL Anti wrinkle cream products
Increase use of consumer recycled materials in product
packaging of EL Anti Wrinkle cream products
Safety and Health
Eliminate hazardous and harmful chemicals from
employees exposure
None
Linkage to Customer Perspective
Environmental Performance objectives
Reduce energy and resource consumption in
producing EL Anti wrinkle cream products
Increase use of consumer recycled materials in
product packaging of EL Anti Wrinkle cream
products
116
Design Strategic Plan /SEM II/ 2012/2013
Customer Perspective
Brand
Enhance Estee lauder Brand Image by EL high
environmental awareness to reduce its energy
consumption and resources
Enhance Estee lauder brand image for EL high
environment awareness to design packaging with a
high content of post-consumer material.
[MR111037]
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Environmental Performance objectives
Reduce energy and resource consumption in
producing EL Anti wrinkle cream products
Increase use of consumer recycled materials in
product packaging of EL Anti Wrinkle cream
products
Financial Perspective
Improve cost structure
Enhance customer
value
Reduce EL operation costs by less
None
consumption of electricity and energy.
None
Innovative
packaging
technology
Linkage to learning and growth
Environmental
Performance
objectives
Reduce energy and
resource
consumption in
producing EL Anti
wrinkle cream
products
Increase use of
consumer recycled
materials in
product packaging
of EL Anti Wrinkle
cream products
117
learning and growth Perspective
Human capital
Technology
Invest in human capital development in reducing
energy and recourse consumption throughout EL
anti wrinkle cream product life cycle
Use of environmental technology
in producing EL Anti wrinkle
cream products
Invest in human capital development for
environmental friendly-growth
Use of environmental technology
in producing El-Anti wrinkle
cream’s packaging
Design Strategic Plan /SEM II/ 2012/2013
Organization
Foster a
culture of
environmental
awareness,
reducing,
reusing and
recycling
Foster a
culture of
environmental
awareness,
reducing,
reusing and
recycling
[MR111037]
Estee Lauder Companies, Inc. – 2011
10.1.2 Safety and Health practices
Define the objectives of Safety and Health practices
Eliminate hazardous and harmful chemicals from employees exposure (Linkage from Environmental Performance)
Reduce the high exposure risk of employees incidents and injuries in the workplace (Linkage from Environmental Performance)
Objective
Eliminate hazardous and
harmful chemicals from
employees exposure
Reduce the high exposure
risk of employees incidents
and injuries in the
workplace
118
Design Strategic Plan /SEM II/ 2012/2013
Balance Scorecard (BSC)
Measure
Target
Percent of Absence of
100% of free hazardous
hazardous, harmful
substances
chemicals
Number of employees
incidents in the workplace
Target to reduce employees
incidents in workplace by
90%
[MR111037]
Estee Lauder Companies, Inc. – 2011
Linkage to Employment Practices
Safety and Health Objectives
Eliminate hazardous and harmful
chemicals from employees exposure
Reduce the high exposure risk of
employees incidents and injuries in the
workplace
Employment Practices
Increase the diversity of the employees such as talent, creativity and
experience to be able to address potential hazardous in workforce
environment
Recruit diverse team with invaluable personality and productive to improve
competitiveness
Linkage to Customer Perspective
Safety and Health Objectives
Eliminate hazardous and harmful chemicals
from employees exposure
Reduce the high exposure risk of employees
incidents and injuries in the workplace
119
Design Strategic Plan /SEM II/ 2012/2013
Customer Perspective
Brand
Increase Estee Lauder brand image by respecting the human
rights of its employees by implementing EL global Human
Rights standards
Increase Estee Lauder brand image by respecting the human
rights of its employees by implementing EL global Human
Rights standards
[MR111037]
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Safety and Health Objectives
Eliminate hazardous and harmful
chemicals from employees exposure
Reduce the high exposure risk of employees
incidents and injuries in the workplace
Financial Perspective
Improve cost structure
Enhance customer value
None
Attract of health conscious
society and investors
Reduce employees compensation
None
costs
Linkage to learning and growth
Safety and
Health
Objectives
Eliminate
hazardous and
harmful
chemicals from
employees
exposure
Reduce the high
exposure risk of
employees
incidents and
injuries in the
workplace
120
learning and growth Perspective
Human capital
Technology
Organization
Employ expertise employees with better
information about how to avoid the absence
of hazardous and harmful materials
Use technology that able to
detect hazardous and
harmful chemicals
Improve
safety and
healthy
culture in EL
Extensive Training on workplace safety
rules and procedure for production
employees
Use safe technology to
create healthy and safe
workplace
Improve
safety and
healthy
culture in EL
Design Strategic Plan /SEM II/ 2012/2013
[MR111037]
Estee Lauder Companies, Inc. – 2011
10.1.3 Employment Perspective
Define the objectives of Employment Perspective
Increase the diversity of the employees such as talent, creativity and experience to be able to address potential hazardous in workforce
environment(Linkage from Safety and Health)
Recruit diverse team with invaluable personality and productive to improve competitiveness(Linkage from Safety and Health)
Objective
Increase the diversity of the
employees such as talent,
creativity and experience to
be able to address potential
hazardous in workforce
environment
Recruit diverse team with
invaluable personality and
productive to improve
competitiveness
121
Design Strategic Plan /SEM II/ 2012/2013
Balance Scorecard (BSC)
Measure
Target
Profesional evaluation
Target to re recruit 100%
performance on hazardous
knowledgeable employees
level of knowledge
specifically in hazardous and
harmful chemicals.
Profesional evaluation
performance
Target to re recruit 100%
knowledgeable employees
[MR111037]
Estee Lauder Companies, Inc. – 2011
Linkage to Community Investment
Objectives of Employment
Increase the diversity of the employees such as talent,
creativity and experience to be able to address potential
hazardous in workforce environment
Recruit diverse team with invaluable personality and
productive to improve competitiveness
Community Perspective
Embrace corporate social responsibility by offering education
scholarship to students in China, India and Brazil studying
marketing, business and environmental issues
None
Linkage to Customer Perspective
Objectives of Employment
Increase the diversity of the employees such as talent, creativity and
experience to be able to address potential hazardous in workforce
environment
Recruit diverse team with invaluable personality and productive to
improve competitiveness
Customer Perspective
Brand
Enhance Estee Lauder brand image through
profesional employees and higher education
level
Enhance Estee Lauder brand image through
profesional employees and higher education
level
Linkage to Financial Perspective
Objectives of Employment
Financial Perspective
Improve cost structure
Enhance customer value
Attracts socially
High
education
of
employees
with
high
level
Increase the diversity of the employees such as
conscious
investors, clients
of knowledge able to reduce costs of EL’s
talent, creativity and experience to be able to
and customers
energy consumption and avoid possible risky
address potential hazardous in workforce
incidents
environment
in the workplace
None
Attracts socially conscious
Recruit diverse team with invaluable personality
122
Design Strategic Plan /SEM II/ 2012/2013
[MR111037]
Estee Lauder Companies, Inc. – 2011
investors, clients and
customers
and productive to improve competitiveness
Linkage to learning and growth
Objectives of Employment
Increase the diversity of the employees such as
talent, creativity and experience to be able to
address potential hazardous in workforce
environment
Recruit diverse team with invaluable
personality and productive to improve
competitiveness
123
Design Strategic Plan /SEM II/ 2012/2013
learning and growth Perspective
Human capital
Technology
Organization
Invest in human capital resources
None
Culture of work attitude
to recruit expertise, skilfulness,
behaviour, passion,
and knowledgeable employees
energetic and enthusiasm
Invest in human capital resources
to recruit expertise, skilfulness,
and knowledgeable employees
None
Culture of work attitude
behaviour, passion,
energetic and enthusiasm
[MR111037]
Estee Lauder Companies, Inc. – 2011
10.1.4 Community Perspective
Define the objectives of Community Perspective
Embrace corporate social responsibility by offering education scholarship to students in China, India and Brazil studying marketing,
business and environmental issues (Linkage from Employment Performance)
Objective
Embrace corporate social
responsibility by offering
education scholarship to
students in China, India
and Brazil studying
marketing, business and
environmental issues
Balance Scorecard (BSC)
Measure
Target
Competitive advantage in
Target to increase 95% of
the industry from community company’s productivity and
investment
competitive position
Linkage to Customer Perspective
Objectives of Community
Embrace corporate social responsibility by offering
education scholarship to students in China, India and Brazil
studying marketing, business and environmental issues
124
Design Strategic Plan /SEM II/ 2012/2013
Customer Perspective
Brand
Enhance Estee Lauder brand image by sponsoring education
opportunity to increase the existing of high-quality scientists and
experts in marketing, business and environmental issues
[MR111037]
Estee Lauder Companies, Inc. – 2011
Linkage to Financial Perspective
Objectives of Community
Embrace corporate social responsibility by offering education
scholarship to students in China, India and Brazil studying marketing,
business and environmental issues
Financial Perspective
Improve cost
Enhance customer value
structure
None
Increase customer satisfaction level
for EL community development
effort
Linkage to learning and growth
Objectives of Community
Embrace corporate social responsibility by offering
education scholarship to students in China, India and
Brazil studying marketing, business and
environmental issues
125
Design Strategic Plan /SEM II/ 2012/2013
learning and growth Perspective
Human capital
Technology
Organization
Develop Self-Knowledge and
Build a culture of
self- awareness for building
None
collaborative team
organizational capacity
environment
[MR111037]
Estee Lauder Companies, Inc. – 2011
Summary of Regulatory and Social Processes
No.
34.
Innovation Process
35.
36.
Environmental
performances
Safety and Heath
37.
38.
Employment
39.
40.
Community
41.
Financial
Perspective
42.
43.
44.
45.
46.
Eliminate hazardous and harmful chemicals from employees exposure
Reduce the high exposure risk of employees incidents and injuries in
the workplace
Increase the diversity of the employees such as talent, creativity and
experience to be able to address potential hazardous in workforce
environment
Recruit diverse team with invaluable personality and productive to
improve competitiveness
Embrace corporate social responsibility by offering education
scholarship to students in China, India and Brazil studying marketing,
business and environmental issues
Reduce EL operation costs by less consumption of electricity and
energy
Innovative packaging technology
Attract of health conscious society and investors
Reduce employees compensation costs
High education of employees with high level of knowledge able to
reduce costs of EL’s energy consumption and avoid possible risky
incidents
in the workplace customers in China, India and Brazil
Attracts socially conscious investors, clients and customers
Increase customer satisfaction level for EL community development
effort
47.
48.
Objectives
Reduce energy and resource consumption in producing EL Anti
wrinkle cream products
Increase use of consumer recycled materials in product packaging of
EL Anti Wrinkle cream products
Customer
Perspective
49.
50.
126
Focus on offering specific performance attributes such as on its size,
ease-of-use and effective period rate
Increase Estee Lauder brand image by respecting the human rights of
its employees by implementing EL global Human Rights standards
Enhance Estee Lauder brand image through profesional employees
Design Strategic Plan /SEM II/ 2012/2013
Measurement
Total joules of energy consumption
Percent of recycled material used for
packaging
Percent of Absence of hazardous,
harmful chemicals
Number of employees incidents in the
workplace
Profesional evaluation performance on
hazardous level of knowledge
Target
15% reduce of energy consumption
Target to 60% of EL Anti Wrinkle
packaging material from recycled material
Reduce to 100%
Competitive advantage in the industry
from community investment
Target to reduce employees incidents in
workplace by 90%
Target to re recruit 100% knowledgeable
employees specifically in hazardous and
harmful chemicals.
Target to re recruit 100% knowledgeable
employees
Target to increase 95% of company’s
productivity and competitive position
Operation costs
15% decrease
Employees Compensation costs
Energy consumption reduced
10% decrease
15% decrease
-
-
Customer survey on satisfaction level
100% of customers satisfaction level
Profesional evaluation performance
Acquiring and retaining customers
20% increase
Customers Feedbacks (survey)
20% increase
Percent of employees with high
20% increase
[MR111037]
51.
52.
Learning and
Growth Perspective
53.
and higher education level
Enhance Estee Lauder brand image by sponsoring education
opportunity to increase the existing of high-quality scientists and
experts in marketing, business and environmental issues
Invest in human capital development in reducing energy and recourse
consumption throughout EL anti wrinkle cream product life cycle
Invest in human capital development for environmental friendlygrowth
54.
Use of environmental technology in producing EL Anti wrinkle cream
products
55.
Foster a culture of environmental awareness, reducing, reusing and
recycling
56.
Employ expertise employees with better information about how to
avoid the absence of hazardous and harmful materials
57.
Extensive Training on workplace safety rules and procedure for
production employees
58.
Use technology that able to detect hazardous and harmful chemicals
59.
Use safe technology to create healthy and safe workplace
60.
Improve safety and healthy culture in EL
61.
Invest in human capital resources to recruit expertise, skilfulness, and
knowledgeable employees
Culture of work attitude behaviour, passion, energetic and enthusiasm
62.
127
Design Strategic Plan /SEM II/ 2012/2013
Estee Lauder Companies, Inc. – 2011
educational level
The position of EL in the industry
compare with the competitors
20% increase
Percent of energy/resources reduced
15% decrease
Percent of employees level of
knowledge related to environmental
awareness
Percent of employees with access to
knowledge in managing technology
50 % increase
Employee culture survey for
environmental awareness, reducing,
reusing, recycling
Strategic skills coverage in key
environmental hazardous position
100% of environmental awareness
50% increase
30% increase
Percent of employees level of
understanding towards safety at
workplace
Percent of detected hazardous
substances on product launched
Peer review of current technological
capabilities
Employee culture survey for safety and
health
Evaluation on employees performance
30& increase
90% Employees satisfaction on safety and
health
90% increase
Employee culture survey for work
attitude behaviour, passion energetic
and enthusiasm
100 % of Employees satisfaction on
achieving work attitude behaviour, passion
energetic and enthusiasm
100% free from hazardous substances
-
[MR111037]
Long-Term shareholder value
Strategy map:
Financial
Perspective
Growth
Productivity
Become the leader in providing innovative
technology in anti-aging skincare products
Price
Customer
Perspective
Estee Lauder Companies, Inc. – 2011
Offer reasonable
price
Create new source of revenue from
anti-aging skincare segment from
India, china and brazil
Increase revenue from antiaging new products of EL
Anti wrinkle cream products
Quality
Offer high quality of El Atiw
wrinkle cream products with
excellence serviceservice
to customers
Increase revenue per
customer
Availability
Deliver zerodefect services to
customer
Increase customer satisfaction
Deliver EL-Anti wrinkle cream
on-time
Selection
Increase customer loyalty and Awareness on ELAnti Wrinkel Cream (Day cream, Night cream)
First to market with new anti aging skin care
innovative-technology
C.P.M
O.P.M
Internal
Perspective
Continuously improve
process
Enhancing high quality of
El anti wrinkle cream
porudction to reduce
costs of wastages and
defects
Continuously improve
product quality
Continuosly improve
customer service
Deliver responsively to customers
Manage distribution risk and high secured in maintaining products quality
Learning
and growth
perspective
Information capital
128
Technology that facilitates quality
improvement and customer satisfaction
Implement customer relationship management
system
portfolio
customer
DesignDevelop
Strategic
Planof/SEM
II/ management
2012/2013
information and data systems
Target high end anti
aging customers (3847 years old)
Acquire new customers
Innovation
Target antiaging customers
in Brazil, China,
India
Discover and develop new anti-aging
product, high quality& effective
Social and
regulatory
Reduce employess exposure
towards any unhealthy risks
Reduce development cyle time
Provide the true quality
of product with
excelence service
Create loyal customers
Offering free
samples of EL
Anti wrinkle
cream for free
trial to
customers
Reduce development cyle cost
Rapid launch of EL anti wrinkle
crem products
Increase diversity of employees
to improve competetiveness
Embrace corporate social
responsibility by offering
education scholarship to student
in China , India and Brazil
Solution selling
Human capital
Develop skills in quality management and process
improvement
Attract and retain top talents
Skillfulness employees with functional expertise and
strategic competencies
Organizational capital
Foster A Quality-centric culture
Foster a culture of innovation and
knowledgeable
[MR111037]
Strategy map with all linkages:
Estee Lauder Companies, Inc. – 2011
Long-Term shareholder value
Growth
Productivity
Financial
Perspective
Become the leader in providing innovative
technology in anti-aging skincare products
Create new source of revenue
from anti-aging skincare
segment from India, china and
brazil
Price
Customer
Perspective
Offer reasonable price
Increase revenue from anti-aging new
products of EL Anti wrinkle cream
products
Quality
Offer enhanced service fuctionality
to customers
Increase revenue per
customer
Selection
Availability
Deliver zero-defect
services to customer
Deliver products on-time
Increase customer satisfaction
Internal
Perspective
Continuously
improve process
Target high end anti
aging customers (38-
47 years old
Enhancing high quality of
El anti wrinkle cream
porudction to reduce
costs of wastages and
defects
Continuously
improve product
quality
Continuosly improve
customer service
Acquire new customers
Provide the true quality of
product with excelence
service
Create loyal
customers
Target antiaging customers
in Brazil, China,
India
Offering free
samples of EL
Anti wrinkle
cream for free
trial to
customers
Deliver responsively to customers
Solution selling
First to market with new anti aging skin
care innovative-technology
Discover and develop new anti-aging
product, high quality& effective
Reduce development cyle time
129
Implement customer relationship management
Design
Strategic Plan /SEM II/ 2012/2013
system
Develop portfolio of customer management
information and data systems
Reduce employess exposure
towards any unhealthy risks
Increase diversity of
employees to improve
competetiveness
Reduce development cyle cost
Rapid launch of EL anti wrinkle
crem products
Manage distribution risk and high secured in
maintaining products quality
Technology that facilitates quality
improvement and customer satisfaction
Increase customer loyalty and
Awareness on EL-Anti Wrinkel
Cream (Day cream, Night cream)
Develop skills in quality management and
process improvement
Attract and retain top talents
Skillfulness employees with functional expertise
and strategic competencies
Embrace corporate social
responsibility by offering
education scholarship to
student in China , India and
Brazil
Foster A Quality-centric culture
Foster a culture of innovation and
knowledgeable
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