Sephora Case Study

Sephora Case Study:Jose, a business student and fluent French speaker, lands a summer internship with Sephora in Paris. Sephora has informed Jose, that this internship will involve him with all areas of Sephora’s business including the 4 Ps: product, place, pricing, and promotion. Jose is excited about going to Paris this summer, because in his free time he plans to attend soccer games all over Europe.

Jose learns that Sephora is a leading retailer and distributor of cosmetic, perfume, and beauty products and has stores across the U.S.A. and the world. Before starting his internship, Jose is told that he has been assigned specific research projects and at the end of the summer, he will have to present his findings to the top executives at Sephora and their parent company, LVMH, a major player in the luxury item markets. Jose’s research project has 3 main parts:

1)Jose must determine whether Sephora should set up a manufacturing plant in either Ireland or Poland to manufacture their own branded perfume and beauty products. These products will be manufactured and packaged to sell in local European markets. Jose is also informed that manufacturing cosmetics is a complex process involving a lot of science, so he will have to choose a country site with a highly skilled labor force including engineers, chemists, biologists, and perfumers.

2)Jose must determine whether Sephora should set up a store in Beijing. Jose has been informed that Sephora already has a store in Shanghai. He must determine whether 2 stores are needed in China. If Jose recommends a Shanghai store, then Jose must also determine how big this store should be and how this store would be set up and marketed to Beijing society and culture.

3)Jose must determine if there is a market for anti-wrinkle, hair coloring and other anti-aging beauty products in Poland and China. If there is a potential market, Jose must determine how large the potential market is, what types of youth-oriented products would be most receptive in these markets, and how these products should be priced.

Jose wonders if he will be able to go to many soccer games this summer? Jose decides that he will start researching his projects before he goes to Paris. He plugs terms into Google, such as “cosmetics” and “Poland,” but Jose is overwhelmed by the more than 700,000 hits. Now he starts to worry about his language skills too. He doesn’t speak Polish or Chinese! Jose decides to go to the library. Karolina, the librarian starts showing Jose alternatives to Google. Jose starts to calm down, because Karolina makes research seem so easy. Together, they start using CountryWatch.com and free Internet sites, such as Export.gov, the U.S. Government Export Portal, and GlobalEdge.MSU.edu from MichiganStateUniversity. Josefinds information about his research topics. Jose nowfeels more confident about going to Paris and taking on the business world!

Created by Caroline Geck.

March 1, 2005