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Mary Kay Case Analysis

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Mary Kay Cosmetics

Mary Kay Cosmetics is a privately owned company.  It is owned by the children of Mary Kay Ash, who started the company, to raise her son, Richard Rodgers.  The company was started in 1968, today Mary Kay products are sold in at least thirty - five markets on five continents.   Mary Kay’s principles are the same today as when she started the company.  Mary Kay Ash’s way of dealing with matters in business and work ethics has been her success in winning several awards, such as, America’s Most Influential Women, and National Business Hall of Fame.

Mary Kay Cosmetics is a company that was founded for women by Mary Kay Ash.  Mary Kay was founded in 1963 in Dallas, Texas.  In the years since they have become larger in many countries. Mary Kay has been successful by using representatives to sell to friends and family, and to continue to bring in more representatives.  They have recently been adding representatives from the younger generation, (ages 24- 35).  In doing so they hope they can reach a more expansive group of younger customers.  Mary Kay cosmetics have also expand, although a limited amount of products, to appeal to the male customers.  There is a new men’s line called MKMen, which consists of colognes, moisturizers, and facial care, such as shave foam and cooling after-shave gel.

In doing a SWOT analysis for Mary Kay, The strength of this company are a loyal customer base, high quality product with strong recommendations, and their website is very user – friendly.  The weaknesses are that they have very little products that appeal to the male market, prices are high, not all consumers can afford the products, and the product is known as a product for older women.  Opportunities for Mary Kay is that they can expand the social media component, there is a diversity within the marketing system, and representatives have the ability to earn a pink Cadillac.  The threats for this company are that the competitors are always looking for new ways to lure in new customers using new technology as it becomes available, most competitor’s brands can be found in stores, brands that appeal to the younger crowds.

After doing the SWOT analysis, my recommendation is that Mary Kay expand the male market by adding more products for men, look into continuously updating technology, and use it to help bring in more consumers their way, and find ways to appeal to the younger generation.

In conducting a five forces analysis on Mary Kay Cosmetics,  the following information has become clear.  The bargaining power of supplies is the volume available.  When suppliers are relying on high volume, they have less bargaining power.  As Mary Kay produces most of their own products, there is no fear of supplies being cut off.  Mary Kay has a selected type of customer base, and as the customers love the product, they will pay more for the product, this is good for Mary Kay’s business volume.  

Mary Kay has only a limited few competitors, this gives them a lower intensity of existing rivalry.  The threat of substitutes are high, as a lower quality product will cause customers to look elsewhere for a better product.  The threat of new competitors is low as strong brand names are important to compete with other companies.

        Mary Kay’s organizational structure consists of Sales force, Recruitment, Training, and Support, and Corporate structure,  Mary Kay’s sales force are contractors called Independent Beauty Consultants.  These consultants buy inventory from Mary Kay and sell them directly to their customers.  As with other stores, the consultants sell their product for retail and keep the difference of what they pay for them.  Consultants also earn commission by recruiting new consultants.  Mary Kay is based on experienced consultants helping the new ones.  As the commission for consultants are paid by Mary Kay Cosmetics and not out of the consultants’ profits, this shows that Mary Kay is not an illegal pyramid organization.

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