Nail polish, or nail varnish, may be referred to colored or transparent liquid which is painted on

nails to gain an attractive look or for nail protection. It appears that modern nail polish is one of
the most fashionable inventions in the twentieth century. A growing number of people involved
in nail polish industry and nowadays even men are purchasing the polish for daily use (Hamalian,
1997). The product has presented significant economic contribution by both making countless
profits, which stood $951.2 million in 2004 (Packaged Facts, 2005), and breeding several related
industries, especially nails salon industry (Nail Manufacturers Council of the Professional Beauty
Association, 2006). This report will firstly briefly introduce the origin and development of nail
polish. Then examine this development procedure from three theoretical perspectives: change
analysis, economic contribution, resistance and stakeholder study. Finally, future possibilities
predictions and recommendations assessing decision making along the whole process of nail
polish development will be given.

Nail polish is believed to have originated in ancient China in around 3000 BC (Krauss, 2006;
Lozano, 2007). The ingredients of the earliest product, which contained egg whites, bees’ wax,
gelatin and gum Arabic, were relatively nontoxic to body health (ibid). At approximately the
same time period, Egyptians started to wear nail polish similar to lacquer paint (Anon., 2009).
Krauss (2006) estimates that polished nails were regarded as a symbol of prosperity in feudal
ages so that only upper class owned the right to utilize the polish. Even during the Chou
Dynasty, around 600BC, transgressors from lower class would be sentenced to death. Lozano
(2007) seems to agree with Krauss (2006) and further argued that regulations had been declining
and by nineteenth century an increasing number of women wearing polish comprising red oils.
Fundamental alteration did not occur until the early 1920s, when modernize nail polish was
invented by Michelle Ménard under the inspiration of automobile paint (Anon., 2002). This
modernized nail polish contained nitrocellulose which was available in different grades and were
measured by viscosity, because the manufacturers were believed to utilize industrial grade
nitrocellulose covertly in order to reduce total cost (Anon., 2009). Meanwhile, the categories of
the polish were escalating, ranging from color to function. Before 2006, some toxic chemicals,
such as formaldehyde, dibutyl phthalate (DBP) and toluene, were used widely in nail polish
production, allowing the products to apply evenly, smoothly and easily (Anon., 2002; Pitman,

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2006). Afterwards, however, bowing to pressure from environmental groups and European
lawmakers, several cosmetics manufacturers yielded on disputed chemical and began the
transformation to some relatively natural harmless formulas (Singer, 2006).

Before considering the first theoretical perspective, change analysis of nail polish development, a
clarification might be necessarily made of the differences between the two possible styles of
changes: gradual change and discrete change. According to Lumsdaine and Binks (2007), using
Schumpeter’s theory could distinct discrete change from gradual change in any development
process. The creation of discrete change depends on the ability to make associations that are in
some sense illogical since they do not result from a clear linear thinking procedure where the
connections are obvious. In other words, discrete change refers to a transformation rather than an
improvement (ibid.). Scanning through the development of nail polish, Michelle Ménard’s
invention of modernized products in 1920s might be viewed as a discrete change. The
modernized polish appeared little logical links to the ancient one. Although the general function
of the polish retained, the formula, essence and manufacturing process of the polish had changed
mostly, from natural materials to chemical (Lozano, 2007). Besides, the change was the
fundamental element of the later shot-up nail polish industry and there were no previous data on
market reaction to the new product. It gives the impression that this “improvement” is so
significant that it may be more suitable to be treated as a transformation or discrete change. As to
the other concerning changes, involving adding red oils, increasing functions and colors, and non-
toxic reformulation could generally be concluded as gradual changes (Lumsdaine and Binks,
2007). Changes of this type, mainly focus on customer satisfactory, are more comfortable for the
industry itself and consumers to accept (ibid.). Therefore, these gradual changes may be of
highly importance in this case to assist the industry to sustain.

Lumsdaine and Binks (2007) also explain that a new product could cause economic development
only when a new contribution of factors of production is introduced. Without exception, the
rapid growth of nail polish industry has contributed to the economic growth. As mentioned
above, the nail polish products market made a profit at $951.2 million in 2004 (Packaged Facts,
2005). Furthermore, National Asian Pacific American Women’s Forum (2008) reported that the

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breeding nail salons, which are dependent on nail polish products, grew dramatically in the late
1970s and has more than tripled in quantity over the last two decades. However, it is also
estimated that nail care products suffered a decline in 2005, primarily due to the decline of the
nail polish category, which occupied 43% of the total market share, dragged other segment down.
With the approaching data, it might be clear that nail polish industry has been performed a vital
role in nail care industry, even in the entire cosmetic industry.

Resistance and stakeholder analysis are comparatively essential when examine the development
of nail polish products. Two reasons are compulsory to take into account: firstly, the analysis
might facilitate the future possibility prediction and decision making; secondly, the maturity of
nail polish products experienced a discrete change, which is more difficult and uncomfortable
innovation for customers to adapt to and it might be a much more complex issue when facing
problem tackling (Hall, J. K. and Martin, M. J. C., 2005). Since the beginning of 21st century,
resistance to nail polish products seems to have been severe in general. The source of resistance
surged from both primary and secondary stakeholders. In accordance with Hall, J. K. and Martin,
M. J. C. (2005), primary stakeholders include the technological competencies of customers,
suppliers, innovators, investors and government entities, while secondary stakeholders are
advocacy groups, inter-governmental organizations and local communities. Among the primary
stakeholders, resistance has been imposed by government entities, which basically refers to EU’s
Directive 76/768/EEC amended in November 2002 (European Chemicals Agency, 2009) and
California’s Prop. 65 List of chemicals known to cause cancer (State of California Environmental
Protection Agency and Office of Environmental Health Hazard Assessment, 2009). The former
entity from EU bans the above-mentioned ingredient of nail polish, DBP, from use in cosmetics
and the later document specifies that DBP, toluene and formaldehyde are considered
reproductive toxins (Healthy-Communications.com, 2006). In reaction to the entities, top
companies, such as OPI and Orly, adjusted both formula and marketing approaches by selling
non-toxic to Europe but noxious otherwise (Nail Manufacturers Council of the Professional
Beauty Association, 2006). Thereafter, resistance imposed by secondary stakeholders seems to
be enhanced, especially in the US. The Campaign for Safe Cosmetics (n.d.) might be one of the
groups among secondary stakeholders who wrote letters to top companies and argued for the

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equal right to access harmless nail polish products. Bowing to the pressure, some top companies,
such as Orly International and OPI Products, did not starte to provide reformulated nail polish
without DBP until 2006 (OPI Products Inc, 2007).

To sum up, the report has briefly summarized the origin and development of nail polish. A
detailed examination has been provided for the development procedure from three theoretical
perspectives: change analysis, economic contribution, resistance and stakeholder study. From the
above analysis, it might be conclude that the foreseeable future for the nail polish industry could
not remain optimistic mainly because of the resistance from stakeholders. Although the industry
still owns the dependence from other breeding industries, for example nail salons, which also face
numerous challenges (Schoon, 2009), it might not be capable to culminate another peak in
development. Alternative methods of sustaining the products may be intensify and accelerate the
efforts on releasing the pressure from secondary stakeholders by gradual change and
reformulation. By shifting towards safe nail polish products, such as water-based nail polish
(Pure Complexions, n.d.), large manufacturers might maintain the market share and sustain the
business properly.

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