Mistura beauty solutions Case Solution

For the company to create success some of these critical issues that need to be addressed include:

1. The 1.2 Million operational deficits can cause a business fail.

2. There are unaddressed distribution problems that lower the product’s quality.

3. The product cost is still high that results in less competitive products.

4. The existing marketing program prevents Mistura to have strong sale growths.

5. The introduction of the new product line will help the company to enjoy its double sale growth.

These are issues that can affect company live or death situation – critical threats or critical opportunities.

1. Analysis (of the Critical Issues)

i. The probability of obtaining external capital from bank or private venture capital fund

The incredible sale growth of 1087% from 2008 -2011 helps Mistura’s beauty products to be recognized as a high quality brand. The CEO received a business award and recognition. Mistura almost got investment from an external investor. The strong sale forecast in the exhibit will raise lenders from a bank or private venture capital fund to invest in company’s business since they can enjoy a rather decent ROI with less risky company (Londhe, 2014).

ii. Unaddressed distribution problems that lower the product’s quality

In order to resolve the distribution problems, the company can consider entering into an exclusive partnership deal with the PLM where all products are solely made for them. In future years, when the company gets established then this manufacturer can be acquired .

iii. Product cost is still high

Better operational efficiency should be ensured by taking control of expenditures such as manufacturing overheads and peripheral costs.

iv. The existing marketing program prevents Mistura to have strong sale growths

A consistent marketing campaign should be launched. In initial years, the social media marketing can be used as it is much less expensive. Also, this will also give clients a chance to stay connected with the company and address any concerns directly.

v. How to expand its products line to double its sales in 3 years

The products should be expanded by staying true to the simplified beauty concept. Few extensions should be launched without the overwhelming consumer. The emphasis should be on product quality so that customers do not feel neglected.

2. Decision Criteria

Although there are several alternatives that the company can consider, some of the main alternatives the company can include the following:

1. Reduce Cost

2. Improve marketing strategies and launch new products

3. No expansion into other areas

4. Selling to a larger player

i. Alternative One

Reduce Cost

By saving money on travel and other extra items, the amount can be saved for creating sustainable operations. Reducing TV appearances and launching online campaigns using social media would be more affordable. This cost reduction strategy is also suitable because lowering traveling and other additional expenditures will provide company room to create breathing space. Also, the fact that there are several advantages in reducing costs of traditional marketing tools because they are taking a lot of resources which the company does not have right now (Teixeira, 2014).

ii. Alternative Two

Improve marketing strategies and launch new products

As mentioned earlier, marketing should be geared towards the digital media using social forums and sites like Twitter and Facebook where the brand can reach consumers and also not face high costs. Since the reach of digital media channels like Facebook and Twitter has increased over the years, the company can use these resources at lower cost and still make a strong connection with the customers on a consistent basis (Londhe, 2014).

iii. Alternative Three

No expansion into other areas

This might not be a good idea given the growing industry trends. If this alternative is taken, then the brand will lose out on new opportunities. The advantage of this strategy will be that the company will continue to cater to a niche market, and this will increase their level of focus and attention. Given their limited resources, sticking to few segments would also not put an additional burden on the balance sheet (Loureiro & Hine, 2001).

iv. Alternative Four

Selling to a larger player

There is also the option to sell to a bigger brand like Loreal, who can put in additional resources to make the business sustainable. However, all autonomy of the owner will be lost. The good thing about this step will be that the company will continue to function smoothly but in a more organized environment utilizing the benefits of experience that the established player will bring to them (Grant Thornton, 2013).