OGL 355 Leading Organizational

Innovation and Change:

SWOT Analysis
Objectives:
1. Define SWOT Analysis.
2. Complete a SWOT Analysis Table.
3. Demonstrate understanding of each SWOT Element as it relates to your Case Study.

1) What is a SWOT Analysis?

a. A SWOT (Strengths, Weakness, Opportunities, Threats) analysis is a strategic

planning tool that analyzes a project or business by assessing the internal

strengths and weaknesses of an organization, as well as the external opportunities

and threats it faces. It involves evaluating factors such as the organization's

resources, capabilities, market positioning, industry trends, and competitive

landscape. In addition, this tool will help you analyze what the company does best

now, and to devise a successful strategy for the future. It can also help you gain

valuable insights to inform decision-making, formulate effective strategies, and

achieve their goals (MindTools Content Team, 2023).

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2) SWOT Analysis Table

Strengths [Internal] Weaknesses [Internal]

1. Marketing 1. Limited P.O.S.

2. Relatability 2. Decreasing quality

3. Celebrity Ambassador 3. Cosmetic Market Emphasis

4. PETA Approved Products 4. Higher cost

Opportunities [External Influence] Threats [External Influence]

1. Influencer Collaborations 1. Trends

2. Cruelty-Free Demand 2. People losing interest

3. International growth 3. Celebrity Competition

4. Monthly Subscriptions 4. Budget friendly alternatives

3) List why the team has chosen two of the strength selections

a. Marketing - The use of social media platforms specifically Tiktok and Instagram

have been influential for Rare Beauty and is their most powerful marketing tool

aimed at their target audience (Patel, 2022).

b. Celebrity Ambassador - Selena Gomez and her celebrity status contributes to the

success of the brand, fans relate to her and feel like they are able to connect with

her through her promotions of the brand (Patel, 2022).

4) List why the team has chosen two of the weakness selections

a. Limited P.O.S - Only being available at Sephora and Rare Beauty website is a

weakness to the company because it restricts the people who don’t have a Sephora

or internet access available to purchase the product. There are many rural places

in America where people have to travel to nearby cities to be able to reach a

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 Sephora and that may not be possible for everyone. Not having the products

readily available discourages buyers from purchasing their products.

b. Cosmetic Market Emphasis - According to Brandaiding.com, having merchandise

increases brand recognition, promotes brand loyalty and can show off the brand's

creativity. (Brand Aid, 2022). Rare Beauty has merchandise like sweatshirts, hair

clips and tote bags, but according to her website it’s been sold out. Being

constantly sold out of these products can lead to disappointed customers who may

not return to the company due to this.

5) List why the team has chosen two of the opportunity (external influence on the

organization, not something the organization would initiate)

a. Influencer Collaborations - While Rare Beauty uses Selena Gomez’ image to

advertise their products there are other popular influencers the company can

utilize to grow their campaigns and reach out to more customers. For instance,

according to Forbes, global spending on influencer marketing has skyrocketed in

recent years, rising from an estimated $2 billion in 2017 to about $8 billion in

2019. One forecast shows that spending is expected to jump to $15 billion by

2022. In fact, beauty giant Estée Lauder revealed the company is now spending

75 percent of its marketing budget on influencers (Forbes, 2020). This creates an

enormous opportunity for brands to tap into the influencer markets.

b. International Growth - There are other beauty brands that have expanded

worldwide more rapidly than Rare Beauty. It would be a good opportunity for

this company to expand in more markets. There are many markets that currently

do not have access to brick and mortar locations. For instance, Central America

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 and South America do not have any local points of sale and this is an external

influence that can create an opportunity to expand. For example, the South

America beauty, cosmetics and personal care market amounts to US $40.24

billion in 2023 and is expected to grow annually by 6.79% (Statista, 2023).

6) List why the team has chosen two of the threat selections

a. Trends - “Fast Beauty” means always having to keep up with or stay ahead of

trends. Zumbach (2017) explained how fast beauty works, from sold out in

seconds, to copycats, to onto the next. Fast beauty does not have an end either, if

you simply do not have the means to keep up with or project the next big and best

trend, you risk falling behind or losing the interest of millions of potential

customers. Zumbach points out that trends used to last up to a decade, but this is

no longer the case. Now trends are in and out in less than two years' time, and two

years is typically a long haul trend at this point. Upon interviewing an e.l.f.

executive, it can be seen without that projection of trends/sales, the seller risks

losing nearly six months of trend based sales and thus profit (Zumbach, 2017).

The threat in this case comes in the form of lost time and profit when trends

cannot be projected, are projected incorrectly, or move faster than the six month

turnaround time of production. Not to mention, when already behind and losing

that profit, there is less time to anticipate the next big trend leading to a snowball

effect and more potential profit loss.

b. Celebrity Competition - According to Petruzzi, the beauty and cosmetics industry

became a popular celebrity medium when Elizabeth Taylor released her own

product in the early 2000’s. From there, many more celebrities have jumped on

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the bandwagon and have taken to not just endorsing already made products, but

instead, releasing their own lines of product. The cosmetic industry is already a

saturated market and is only continuing to grow with more than 33 new celebrity

lines since the release of Rare Beauty as there were more than 20 celebrities

releasing their own brand in 2021 and 13 last year. These numbers do not include

well known, celebrity-like personalities from platforms such as Youtube, TikTok

and Instagram despite their very real threat to the industry and the rivaling

celebrities within (Petruzzi, 2023). Today’s threat comes in the form of a fairly

large increase in cosmetic brand creation which is currently around 4% annually

(IBIS World, 2023). However, the industry had a 15% growth rate last year alone

(Petruzzi, 2023). This growth has broken previous projection barriers by more

than 3%, and those projections were meant to describe the next five years

(ReportLinker, 2022). These new brands entering an already saturated market can

perpetrate loss of profit for Rare Beauty as people make the switch to test out the

next great makeup line which has great potential to be from a celebrity they hold

more dear.

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 References

Aid, B. (2022, June 9). 5 reasons why branded Merch is so important in 2022. Brand+Aid.

https://www.brandaiding.com/why-branded-merch-is-so-important-in-2022/

#:~:text=Promotes%20Brand%20Loyalty,and%20unexpected%2C%20they%20feel

%20pleased

Forbes. (2022, October 12). How influencers are making over beauty marketing. Forbes.

https://www.forbes.com/sites/hbsworkingknowledge/2019/12/13/how-influencers-are-

making-over-beauty-marketing/?sh=6e363e321203

Fraser, K. (2021, June 20). Fast beauty might be cheap. It’s also costing the Earth.

The Daily Beast. https://www.thedailybeast.com/fast-beauty-might-be-cheap-its-also-

costing-the-earth

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IBISWorld. (2023, January 25). Industry market research, reports, and Statistics.

https://www.ibisworld.com/industry-statistics/number-of-businesses/cosmetic-beauty-

products-manufacturing-united-states/

MindTools Content Team. (2023). SWOT Analysis: Discover New Opportunities, Manage

and Eliminate Threats. Mind Tools. Retrieved from

https://www.mindtools.com/pages/article/newTMC_05.htm

Patel, N. (2022, August 16). How Selena Gomez’s rare beauty goes viral, with CMO Katie

Welch. The Verge. https://www.theverge.com/23307449/selena-gomez-rare-beauty-

marketing-katie-welch

Petruzzi, D. (2023, March 30). Topic: Celebrity beauty brands. Statista.

https://www.statista.com/topics/10746/celebrity-beauty-brands/#topicOverview

ReportLinker. (2022, December 8). The global active cosmetics market is expected to grow at a

CAGR of 12.64% during 2021-2027. GlobeNewswire News Room.

https://www.globenewswire.com/news-release/2022/12/08/2570057/0/en/The-global-

active-cosmetics-market-is-expected-to-grow-at-a-CAGR-of-12-64-during-2021-

2027.html

Statista. (2020). South America: Market forecast. https://www.statista.com/outlook/cmo/beauty-

personal-care/south-america#:~:text=Revenue%20in%20the%20Beauty

%20%26%20Personal,US%2421.21bn%20in%202023

Zumbach, L. (2017, February 21). Beauty companies ramp up the pace to keep up with

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faster trends. Chicago Tribune. https://www.chicagotribune.com/business/ct-ulta-fast-

beauty-makeup-trends-0221-biz-20170217-story.html

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