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

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<b>HO CHI MINH CITY OPEN UNIVERSITYSCHOOL OF ADVANCED STUDY</b>

<i><b>Lê Phương Nghi 2054010453Nguyễn Thị Kim Ngân 2054012186Trần Thụy Phương Uyên 2054010871Lê Thụy Thiên Ý2054012395 </b></i>

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<i><b>Conclusion of EFE Matrix... 15</b></i>

<i><b>6. Value Chain Analysis... 16</b></i>

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<b>STRATEGIC MANAGEMENT OFNATURE STORY CO., LTD - COCOON</b>

<b>1. OVERVIEW OF NATURE STORY CO., LTD </b>

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

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

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

COCOON aims to become the most popular and favorite vegan cosmetic brand in Vietnam and has the opportunity to enter foreign markets.

Short-term: COCOON aims to achieve 18% growth compared to 2022 by the end of 2023 Long-term: COCOON sets a goal in the next 5 years for products to be exported to 3 countries of Southeast Asia by the end of 2028

<b>Core values</b>

<b>Cocoon is proud to be a cosmetic brand 100% made in Vietnam </b>

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

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

Moreover, in the overall picture of Vietnamese cosmetics, Cocoon is also known as a brand that positively inspires users, when they always choose a development path based on the sustainability of the ecosystem. respecting the life of all species and associated with environmental protection activities, preserving the earth's green color with many meaningful programs.

Cocoon's commitment to 100% ingredients of clear origin and safe for the skin: All ingredients in Cocoon's products have documents proving the origin of ingredients from domestic suppliers. and abroad. The products are formulated without ingredients such as alcohol, parabens, formaldehyde, phthalates, ....

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

100% never tested on animals: Cocoon cosmetic formulations are researched and tested using laboratory tests (in-Vitro test) or on volunteers (in-Vitro test). Cocoon does not perform tests on animals such as rabbits, mice, fertilized egg yolks, …

<b>2. Macro (PESTEL)</b>

<b>Political and Legal </b>

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

<b>Transnational organization:</b>

- <b>TPP </b>(Trans-Pacific Partnership) : 4/2/2016 Vietnam signed TPP: widely liberalized in goods, import tax is completely eliminated.

<b>- 28 years of joining ASEAN</b>

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

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

The state promulgates strict regulations and

Economic integration brings export opportunities to foreign countries

In recent years, Vietnam's GDP growth rate has almost always been at a high rate of over 5%/year (except in 2020) because of Covid-19, with this economic growth rate, we can see that Vietnam is in a difficult period. period of continuous development and if the economic situation continues to be positive in the future, it will help Vietnam develop even more strongly.

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

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

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

According to Business International (BMI), the cosmetics and beauty industry in Vietnam is maintaining a compound annual growth rate of 10.9% for the period 2014-2022, thanks to improved income and Product consumption trends changing positively, making it full of potential in the future. This sector has maintained good growth along with a positive GDP growth rate in the period 2014-2022. Data from the General Statistics Office in recent years show that when the economic growth rate remains at 6-7%, the beauty industry will have a high growth rate. Therefore, market attractiveness will be a contributing factor in driving customer interest in the business.

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

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Threats Opportunities The impact of the Covid epidemic reduces the

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

<b>Source: Q&Me</b>

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

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

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

The number of consumers of green cosmetics is increasing

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

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

<b>Environment </b>

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

Today's technological inventions are

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

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

The natural environment facilitates the

<b>3. MICRO</b>

<b>Threat of new entrants </b>

<i><b>a) Industry attractiveness</b></i>

Since Vietnam joined the Free Trade Agreement (FTA), preferential tariffs make it easier for goods to enter Vietnam. Buying and selling directly is also easier. Therefore, more and more

<b>foreign enterprises enter the market. From this, one can conclude that the potential</b>

competitor's risk of entering the industry is high

<i><b>b) Barriers to entry into the industry</b></i>

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

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

Certain barriers exist when new entrants

want to enter the industry. ^{High risk of entering the industry by}_{potential competitors due to attractive} incentives and market expansion

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

Once there is a foothold in the market, there are also many potential competitors appearing. Because the ingredients to create natural cosmetics are easy to find, many suppliers and brands begin to sell cheap but not guaranteed. Or customers can also handmade cosmetics such as coconut oil, ... It can be concluded that the ability to convert products, or the ability of buyers to dominate the industry is quite high. Besides, the uneven competition among brands negatively affects customers. They will be more hesitant to choose products when the brand has too much marketing but does not care about product quality.

The customer segment is increasingly expanding in terms of age

Customers can easily switch brands (brand switching)

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

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

<b>Competitors </b>

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

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<i><b>a) Domestic competitors</b></i>

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

<i><b>b) Foreign competitors</b></i>

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

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

Famous British cosmetic brand

Provide skin care product lines with many different objects.

The packaging is not too picky but clear and natural

Provide skin care product lines for both men and

The cosmetic brand is quite famous and safe in Vietnam Provide hair care cosmetics for women, pregnant women, people with sensitive skin, ...

The packaging shows the colors of the Vietnamese

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

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

Besides, Cocoon also has products for hair growth which are extracted from pomelo. Độ lành tính của nó cao hơn và chất lượng duy trì lâu dài hơn. To wait for the result, customers must be patient in using the products for months to grow hair. Instead of this method, some people would like to do hair extensions at hair salons where they can have their long hair within a day.

Natural cosmetics are more benign than

More popular substitutes

<b>4. CPM MATRIX</b>

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

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From the CPM matrix, we see that The Body Shop has a score (3.5) that is currently the leading cosmetic brand with outstanding competitive strengths in terms of product diversity and quality. In second place is Innisfree (3.3) with product diversity and advertising strength. It can be seen that The Body Shop and Innisfree are the two leading cosmetic brands in the industry in the Vietnamese market because of their long-standing strengths, quality and high brand awareness. However, these two businesses are considered as "foreign birth" product lines for most Vietnamese consumers in general or the student segment in particular. This is the competitive strength of Cocoon and BareSoul because of the pure natural ingredients available in the country and affordable prices, suitable for the pocket of Vietnamese.

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

With inherent strengths, Cocoon should focus on developing new products to increase product diversity, promote advertising strategies, develop vegan product quality, and keep a mid-range price strategy compared to the market to be able to reach more potential domestic customers. However, Cocoon has not yet developed the R&D segment, so the company needs to find suitable strategies to gain strength in product research and development.

<b>5. EFE MATRIX: </b>

<b>EFE MATRIX</b>

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