mistura beauty solutions case analysis
DESCRIPTION
Case Analysis presented at the 2013 NIBS Worldwide Case Competition in Leuven, Belgium.TRANSCRIPT
MISTURA BEAUTY SOLUTIONS
Conlon Cash, Brooke McCarter, Sundeep Shamanur, and Cole Welch
OUTLINE
Issue IdentitficationSituation Analysis
InternalExternal
AlternativesRecommended StrategyImplementationRisks & Contingencies
ISSUE IDENTIFICATION
How can Mistura manage growth while considering entering new chains and expanding chain stores given factors such as:
Financial CapacityExternal Financing Outsourcing
Issue
INTERNAL ANALYSIS
• Ottawa Small Business Acheivement Award• One of the Ottawa region’s top 40 under 40• PLM• 1085% sales growth 2009-2011
Strengths
• Bill paying• Marketing process inefficiency
Weaknesses
Analysis
EXTERNAL ANALYSIS
• $2.3 billion market size• Environtmentally consciousness
Opportunities
• Manufacturer producing for another company• Increased competition due to increased industry growth and
low barriers to entry
Threats
Analysis
KEY SUCESS
FACTORS
Simplicty
Brand Image
Natural
Versatility
Analysis
FIVE FORCESMODEL
CompetitionLow
SubstitutesLow
BuyersHigh
New Entrants
High
SuppliersHigh
Analysis
WHAT NEEDS TO HAPPEN
• Examples: • Debt• Venture Capitalism• Public Offering
Obtain Capital
Alternatives
ALTERNATIVE 1: SIX SIGMA
Pro Increased efficiency
Con Time to implement
Focused on increasing efficiency of distribution
Alternatives
ALTERNATIVE 2: VERTICAL INTEGRATION
Pro Increased control over quality
Con Capital intensive facility construction constraints
Focused on quality control and cutting costs
Alternatives
ALTERNATIVE 3: HIRE CMO
Pro Increased administrative efficiency
Con Does not address distribution or production concerns
Expand product line and increase market share
Alternatives
QUANTITATIVE ALTERNATIVE ANALYSIS
Weight Alt 1 Alt 2 Alt 3
Feasibility 25% 3 2 4
Timliness 20% 3 2 4
Cost 20% 3 2 4
Image Improvement 20% 3 4 2
Potential Savings 15% 5 4 1
Total 100% 3.3 2.7 3.15
Scale of 1-5; 1 = Worst; 5 = Best
Alternatives
RECOMMENDED STRATEGY
It is recommended that Mistura implement Six Sigma to increase efficiency in distribution given that the appropriate capital is obtained.
Recomended Strategy
IMPLEMENTATIONShort Term (0-1 Year)• obtain capital• begin Six Sigma process
Medium Term (1-2 Years)• implement Six Sigma process• research and development of extended product lines
Long Term (2+ Years)• review Six Sigma• consider implementation of other alternatives
Implementation
SIX SIGMA PROCESS
Short Term (0-1 Year)Define – unacceptable quality control timeMeasure – process flow map and other analytics
Implementation
SIX SIGMA PROCESS
Medium Term (1-2 Years)Analyze – review collected data & determine best
practices Improve – implement best practices Control – train employees
Implementation
SIX SIGMA PROCESS
Long Term (2+ Years):Evalute Six Sigma processConsistently achieve less than 3.4 defects per million
Implementation
REVENUE INCREASE AFTER IMPLEMENTATION
2010 2011 2012 2013 2014
-1000000
1000000
3000000
5000000
7000000
Product SalesNet earnings (loss)Product Sales*Net earnings (loss)*
Implementation
RISKS & CONTENGENCIES
Risks: Six Sigma doesn’t have desired efficiency
results
Contengencies:If Six Sigma proves ineffective, transfer
capitol allocated to Alternative 1 to Alternative 3Risks and
Contingencies
WHEN TO EXIT?
Test: Fit PerformanceCompetitive Advantage
Risks and Contingencies
QUESTION AND ANSWER SESSION
MISTURA MOTTO
“Beauty Simplified”
POTENTIAL PRODUCT EXPANSION
MascaraEyeliners Eye Care Products
WAYS TO OBTAIN CAPITOL
DebtVenture CapitalistPublic Offering
OBTAINING CAPITAL
DebtMaintain decision making capabilitiesDebtholders have primary claim to CFs which could be problematic if company ever decided to go publicInability to pay bills indicates risk of bankruptcy is higher, increasing Kdat
OBTAINING CAPITAL
Venture CapitalistImmediate access to funds Lose some of the decision powerGain expertise of someone who has had success in the business world