analyze revenue cost profit in total of shiseido

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INDIVIDUAL ASSIGNMENT REPORT

Full name: Mai Ngọc AnhClass: IB1612

Student code: HS160898SUBJECT: IBS301

LECTURER: BÙI THÙY DƯƠNG

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TABLE OF CONTENT

I. Briefly introduce the company’s background...01

Main product/service...01

Location/country where the company operates...03

Clearly determine the scope of the analysis...04

II. Shiseido’s scope...04

III. Analyze revenue, cost, profit in total of Shiseido...06

VI. Conclusion/ Recommendation/ References...13

IV. Diversification matrices...10

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I. Briefly introduce the company’s background

Shiseido is a famous Japanese cosmetic brand with many high-quality products. Some of Shiseido's main products include:

Main product/service

Shiseido is a Japanese multinational personal care company that specializes in skincare, cosmetics, andfragrance products. The company was founded in 1872 by Arinobu Fukuhara, who was a former pharmacistin the Imperial Japanese Navy.

Originally named Shiseido Pharmacy, the company started out as a small pharmacy in Tokyo that soldWestern-style medicines and cosmetic products. It quickly gained popularity for its high-quality products andsoon began to expand its operations throughout Japan.

In the early 1900s, Shiseido began to develop its own cosmetic and skincare products, becoming one of thefirst companies in Japan to do so. In the decades that followed, the company continued to expand its productline and its operations, opening stores across Japan and eventually expanding into international markets.

Today, Shiseido is one of the largest cosmetics companies in the world, with a presence in over 120countries. The company has a strong reputation for its innovative products and is known for its commitmentto sustainability and social responsibility.

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Sunscreen: Shiseido is one of the leading brands in the sunscreen industry,with various physical and chemical sunscreen products. This product helpsto protect the skin from UV rays and minimize skin pigmentation.creams. This product helps to provide moisture to the skin, protect the skin

from environmental damage and minimize wrinkles.

Hair Care Products: In addition to skincare products, Shiseido alsomanufactures hair care products, including shampoos, conditioners, andstyling creams.

Makeup Cosmetics: Shiseido offers a wide range ofhigh-quality makeup products, including foundation,lipstick, mascara, blush, and more.

Body care products: Shiseido also offers body care products, includingshower gel, body cream, and more.

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Location/country where the company operates

Shiseido is a Japanese multinational cosmetics company operating globally. Shiseido's main operating locationsinclude Japan, the US, Europe, China, Korea, and Southeast Asia. Currently, Shiseido is present in more than120 countries and territories worldwide.

In addition, Shiseido also has production centers and representative offices in many different countries aroundthe world. Depending on the type of product and service, Shiseido may have a different presence in differentcountries and regions.

The distribution of Shiseido's stores in countries around the world is quite diverse and can change over time.Here is some information about Shiseido's store distribution in some major countries:

Japan: Shiseido has many stores throughout Japan, including both official stores and franchise stores. Inaddition, Shiseido products can also be found at supermarkets and drug stores.

USA: Shiseido has several official stores in majorUS cities, including New York, Los Angeles, andSan Francisco. In addition, Shiseido products canalso be found at cosmetic stores and onlineretailers.

France: Shiseido has several stores in Paris andother major French cities, including Lyon andMarseille. Shiseido products can also be found atcosmetic stores and large supermarkets.

China: Shiseido is present in many major Chinesecities, including Beijing, Shanghai, Hangzhou,Shenzhen, and Guangzhou. Shiseido stores inChina include both official stores and franchisestores.

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The scope of analysis in this report is Shiseido Company, Limited at the international level.

Clearly determine the scope of the analysis

We can visualize the strength of Shiseido's operations in countries around the world through its annual salesfigures.

Shiseido is a Japanese multinational company that operates in thebeauty and personal care industry. The company offers a diverserange of products that includes skincare, makeup, hair care,fragrance, and beauty accessories.

In terms of diversification, Shiseido has expanded its productportfolio over the years to include different categories of products.For example, the company has launched several sub-brands, such asNars and BareMinerals, to cater to different segments of the beautymarket. Additionally, Shiseido has expanded its business operationsto include other areas such as healthcare and wellness.

II. Shiseido’s scope

Singapore: Shiseido has many stores in Singapore, including both official stores and franchised stores.UK: Shiseido has several stores in London and other UK cities, including Manchester and Birmingham. Inaddition, Shiseido products can also be found at cosmetic stores and large supermarkets.

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Overall, Shiseido can be classified as a conglomerate, as it operates in multiple business segments, includingbeauty, healthcare, and wellness. By diversifying its product portfolio and business operations, the companyaims to minimize risk and capture growth opportunities in different markets.

Shiseido has diversified its product portfolio into several categories, including skincare, makeup, fragrance, haircare, and body care. Shiseido's diversification can be classified into the following types:

Product Diversification: Shiseido has a wide range of products in each of its categories, offering customers avariety of options to choose from. For example, in skincare, the company has products for various skin types,concerns, and age groups, such as cleansing oils, moisturizers, serums, and sunscreens.

Geographic Diversification: Shiseido has a presence in more than 120 countries, with a focus on expanding itsbusiness in Asia, particularly in China and Southeast Asia. The company has also entered into partnerships andacquisitions to strengthen its presence in the global market.

Brand Diversification: Shiseido has multiple brands under its umbrella, each catering to a different marketsegment. For example, its premium skincare line, Clé de Peau Beauté, targets a luxury consumer base, while itsdrugstore brand, Integrate, offers affordable makeup and skincare products.

Channel Diversification: Shiseido sells its products through various channels, including retail stores, departmentstores, e-commerce platforms, and its own website. The company has also introduced new distribution channels,such as vending machines and pop-up stores, to reach customers in different locations and demographics.

Overall, Shiseido's diversification strategy allows the company to capture a larger market share and adapt tochanging consumer preferences and trends.

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Laura Mercier - an American cosmetic brand, acquired by Shiseido in 2016.Ipsa - a Japanese skin care cosmetic brand, is part of Shiseido Group.

Shiseido relates to these businesses through their acquisition or share ownership. Owning other cosmetic brandshelps Shiseido expand its product portfolio and strengthen its market share in the cosmetic and skin careindustries.

III. Analyze revenue, cost, profit in total of Shiseido

Shiseido's revenue, cost, and profit in total in 2019, 2020, 2021 and 2022

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However, due to the impact of the COVID-19 pandemic, the company's revenue decreased in fiscal year 2020.During that year, Shiseido's total revenue decreased by about 18.62% year-on-year, to about 920 billion yen.Japan (equivalent to about 8.8 billion USD).

However, in fiscal year 2021, Shiseido has begun to recover its revenue. According to the company's latestfinancial report, revenue for the fourth quarter of 2021 reached about 292 billion Japanese yen (approximately$2.7 billion), up 15.9% year-on-year. In the first quarter of fiscal 2022, Shiseido's revenue continued to grow toapproximately 259 billion Japanese yen (approximately $2.4 billion), up 20.6 percent year-on-year.

Overall, Shiseido has been going through a tough time due to the impact of the COVID-19 pandemic, however,the company is starting to recover and there are positive signs in revenue growth in recent quarters.

About cost:

According to Shiseido's financial report, costs have increased from 2019 onwards. In the financial year endedDecember 2019, the company's average operating expenses increased 1.6% year-on-year to JPY 1.4 billion. Inthe financial year ended December 2020, average operating expenses increased by 4.4% year-on-year to JPY1.46 billion.

Overall, Shiseido is increasing costs to strengthen its competitiveness in the market. Investments in productresearch and development, marketing and advertising, as well as selling expenses are increasing. In addition,Shiseido is also increasing investment in subsidiaries and expanding its business in the global market.

However, increasing costs can also affect a company's bottom line. Therefore, Shiseido needs to ensure thatthese expenses are effectively invested and can contribute to the future growth and profitability of the company.

Shiseido's revenue in the period from 2019 to now has been affected by various factors.

In fiscal year 2019, Shiseido's total sales totaled about 1.13 trillion Japanese yen (approximately $11 billion).

About revenue:

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Shiseido's financial statements show that the company's profits have fluctuated over the past few years.

According to Shiseido's financial statements, for the fiscal year ended December 2019, Shiseido's net profitincreased 19.8% year-on-year to JPY 73.56 billion. In the financial year ended December 2020, due to theimpact of COVID 19, Shiseido's net profit dropped significantly (down 115.85%), to JPY-11.66 billion.

Many factors have contributed to Shiseido's decline in profits, aside from the COVID-19 pandemic, along withincreased costs due to the company's investment in product research and development, marketing andadvertising, as well as Selling expenses. Besides, competition in cosmetics and beauty care industry is alsoincreasing, especially from new technology companies in the market.

However, by 2021, Shisei's net profit will increase dramatically to 502.35% compared to 2020. It can be saidthat 2021 is a great year for Shiseido when its net profit is from -11.66 billion. JPY up to 46.91 billion JPY.

By 2022, this figure will decrease by 27.09% to JPY 34.20 billion as Shiseido is still paying a lot of expenses tofocus on strengthening its competitiveness and expanding its business. on the global market.

To increase the company's profitability, Shiseido needs to ensure that its business and investment strategies areimplemented effectively and contribute to the future growth and profitability of the company.

About profit:

About profit margin:

Shiseido's profit margin from 2019 onward has fluctuated.

In 2019: Shiseido's net profit margin reached 6.8%, higher than the previous year (5.3%). This is a good resultfor the company, showing that their business strategy is being implemented effectively.

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In 2020: Due to the impact of the COVID-19 pandemic, Shiseido recorded a historic loss of $8.5 billion, ofwhich net profit decreased by 93.3% year-on-year. However, the company has taken several measures to reducecosts and cut staff to mitigate the impact of the pandemic on its business.

2021: Shiseido has had a strong recovery with net profit increasing to 6.1%, higher than in 2019 before thepandemic broke out. This recovery is explained by the recovery of the cosmetics and skin care market, alongwith the company's continued cost optimization and strengthening of its online business.

Overall, Shiseido has experienced a difficult period in 2020 due to the COVID-19 pandemic, however, thecompany has put in place measures to mitigate the impact of the pandemic on its business. In 2021, Shiseido hashad a strong recovery with net profit increasing again, showing that the company's business strategy has beenimplemented effectively.

From the analysis of revenue, expenses, profit and profit margin, it can be seen that Shiseido's financial positionfrom 2019 onwards has remained stable despite the impact of the Covid-19 pandemic. . The group is continuingto grow and invest to expand its business.

Economic situation:

Competitive status:

L'Oréal: As one of the world's leading cosmetic companies, L'Oréal also offers products similar to Shiseido.Estée Lauder: As one of the premium cosmetics and skin care brands, Estée Lauder also competes withShiseido in the global market.

Procter & Gamble: As one of the world's leading personal care companies, Procter & Gamble also offerscosmetic and skin care products.

Like every other industry, Shiseido is facing fierce competition from other competitors. Shiseido's competitorsin the cosmetics and skincare industry include:

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Similar products and services are offered by other businesses including cosmetic brands such as Chanel, Dior,Clarins and Clinique. However, Shiseido has a distinction in providing products based on scientific research andcutting-edge technology, especially in anti-aging products.

Shiseido approaches the market through traditional distribution channels such as retail stores and dealers. Inaddition, the company also develops online sales channels, including its own online store and the online saleschannels of major sales partners such as Amazon and Sephora. Shiseido also focuses on reaching the globalmarket, with its presence in many countries and regions worldwide.

In an effort to compete with its rivals, Shiseido focuses on new product research and development and improvesexisting products to improve quality and functionality. In addition, the company also focuses on branding andreaching customers through effective advertising and marketing strategies. Shiseido also focuses onstrengthening customer relations through better customer care services, including online customer support andconsulting services.

In addition, Shiseido also focuses on developing natural and environmentally friendly skin care products to meetthe needs of customers who are looking for safer and more sustainable products.

In short, Shiseido is facing fierce competition from competitors in the cosmetics and skin care industries.However, the company has been focusing on developing new products, strengthening customer relations andeffective marketing strategies to compete in the global market.

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