Natura

Globalizing Beauty!

by Syndicate 3:
1. Ade Dwipayana - 29318309 6. Jenjang Satriyo Utomo - 29318434
2. Alex M Simanjuntak - 29318343 7. Joobu Wahyudi - 29318449
3. Anissa Dinar Prihatina - 29318427 8. Livia Sigit Putri - 29318407
4. Bara Yohantomo - 29318424 9. Rendy Cahyadi - 29318357
5. Fadila Pratika Alimuddin - 29318445
Background: Natura, Globalizing Beauty
● The Goals : To introduce Natura’s brand to European markets and to educate public about the
company’s unique values.
● Challenge: Find the Right People who fully commit to company
● Began to explore International market in 1982 through export to Argentina, later Mexico.
● Began to European market to Portugal in the early 1990s, but not success. Then 2005, decided
to test its product in Paris as the world’s most sophisticated centre for cosmetics, then started
to turn the profit.
● International strategy concerned become central operations - local adaption
 Natura Milestones of Achievement

Source : https://naturaeco.com/timeline.html
Analysis for Globalizing
1. External Analysis
a. PESTLE Analysis
b. Porter’s 5 Forces
c. Strategic Group Model

2. Internal Analysis

a. Resources Based View ⇒ VRIO Framework

b. Business Model Canvas
c. Core Competencies
d. Strategy Diamond
1a. PESTLE Analysis
● The product is eco-friendly (using natural
products, social support, and working
towards sustainable environment)
● Climate change would also render some
products useless. For example, in the case
of textiles, in countries where the winter has
become very mild due to Global Warming,
warm winter clothes have much less of a
market.
The most recent initiative in terms of stakeholder
based technology has been the building of a local
knowledge and innovation centre, which is under
construction in an Amazon region, where local
researchers and scientists will work together with
Natura to discover even more about Amazon
biodiversity.
A high level of taxation would demotivate
companies like Natura from maximizing their
profits.
This highly ideological approach coexists with
an intensive pursuit of growth, which has made
the company a market leader in Brazil, and its
stock an attractive investment.
● The demographics of the population, meaning
their respective ages and genders, vastly
impact whether or not a certain product may be
marketed to them.
● Direct soles model paired with community-
based development
● Intimate innovative relationship to external
stakeholders
 1b. Porter’s Forces Five Models

LOW because for European Market need good brand

LOW because has good product
value. It’s need time and high investment for
development, also do good collaboration
developing
with universities and research center
(Innovation without high investment)

HIGH because there is

L’oreal with high consumer
perception value with price
cheaper than Nature.

HIGH because there several HIGH because the

competitors (chanel, L’oreal, consumer cost for
Procter & Gamble) switching is low
1c. Strategic Group Model
Consumer Perception
Natura product is positioned as premium
price and high value product
● Chanel compete in more premium
market, offering product with higher
prices and more value
● Procter & gamble compete in lower
market, offering product with lower
prices and less value
● L’Oreal is the main threat of Natura,
they possess the higher competitive
advantage over Natura, since they
offer product with higher value but
lower price
2a. VRIO Framework

Valuable : Decentralized innovation (R&D)

process, collaboration through partnership

Rare : Natural product

Inimitable : Communities project to recruit

independent consultant employed with
specific background (disable, slums)

Organization : Value measurement

between stakeholders, Brand
acknowledgement in worldwide industry
Sustained Competitive Advantage for Natura
- Strong Natura Brand: eco-friendly and chain of
relationship
- Loyal and well trained sales consultant
- High innovation rate, most revenue come from
new products
2b. Business Model Canvas

Key Partners Key Activities Value Propositions Customer Relationship Customer

- University as a R&D - Sales & promotion
partner, provide lower - Manufacturing
cost R&D for Natura - Logistics
and tax incentive - R&D
- Environment NGO - HR activities
- Raw materials and
machine suppliers Key Resources
- Logistic partners - Sales consultants
- Store building owner - Employees
- Raw materials
- Manufacturing machine
- Laboratorium
- Warehouses
- Transportation
- Store/showroom
Segments
- Natural products - Community approach
- Environmental friendly - Female
- Sustainable company - Middle to upper
(cope with GRI) class
- High value premium - Environmentalist
product - Sales consultant’s
- High innovation rate Channels circle of influence/
Sales consultants which range community
from housewife to corp. staff:
- Sales are typically from
underprivileged family but
provided with training
- High salary
- Enable Natura to access the
inaccessible market

Cost Structure Revenue Stream

- Capital Expenditure Operation Expenditure
1. Machine & manufacturing equipment 1. COGS
2. Legal Registration 2. SG&A
3. R&D Cost 3. Building rent/maintenance
4. Employee salary
- Product sales to both sales consultants and direct
customers
Note: Natura have a very high margin of 24.5%
 2c. Linking Core Competencies, Resources Capabilities and Activities
to Competitive Advantage and Superior Firm Performance

Core Competencies Unique Capabilities

strengths, embedded deep
within a firm, that are critical
to gaining and sustaining
competitive advantage.
Organizational and
managerial skills necessary to
orchestrate a diverse set of
resources and deploy them
strategically.

Resources Any Activities Distinct

assets that a firm can draw
on when formulating and
implementing a strategy
and fine-grained business
processes that enable firms to
add incremental value by
transforming inputs into goods
and services.

Source: Rothaermel, F. (2017). Strategic management. New York: McGraw-Hill Irwin.

2c. Core Competencies of Natura

Triple Bottom Line Management - Economic dimension → Brand Value,

Business commitment
- Social dimension → Relationship with
itself and others
- Environment dimension → Environmental
friendly; working towards

Relationship Network - Unique relationship → direct sale,

community → Sustainable
entrepreneurship

Product and Concepts - Natural

- High Value and High Innovation
- Business strategy vision, industrial
operation, logistic system
- Development of technologies utilizing
renewable sources
2d. Strategy Diamond
Staging Arena
● What will be Natura’s speed and ● Where will Natura be Active?
sequence of moves? - Commencing in less developed countries.
- Central operations - local adaption
Natura speed of expansion: High - Segments: Middle to upper class;
Natura sequence of initiatives: Environmentalist; Sales consultant’s circle of
1982 - Explore international markets through
influence/ community
Exports
- Introduce Natura’s brand to the
European market Vehicle
1999 - Internationalization in Latin America ● How will Natura get there?
gained pace - Direct sales model paired with
2007 - 100,000 consultants working in community-based development
Argentina, Mexico, Chile, Peru, - Internationalization
Colombia, Venezuela. - Product development → Advance
Expansion through 1.4 million well-paid sales
R&D → ‘Open Innovation’ strategy
consultant.
- Continuously tapping into
Differentiators knowledge from external
● How will Natura win? stakeholder.
Economic Logic
● How will returns be obtained?
- Ideological Business Value
- Innovate Sustainably → Sustainability →
Premium prices due to proprietary product
Triple bottom line → Profit, Planet, People
features → High value, Premium price
- Unique relationship
Q1: Will Natura’s expansion continue at the same speed? If so, on
what basis?
Yes, based on distribution strategy by using cutting edge technology to
boost consultant’s productivity
Q2: How can the “relationship approach” be further boosted and
accelerated market-wise and innovation-wise ?
Transformation from Direct Selling to Relationship Selling
Lesson Learned
1. Customers will purchase product/service that is unique and provide them unique value. In the case of Natura, it
choose unique positioning at the time, capturing the environmental- conscious customers
2. Continuous innovation is the key to maintain competitive advantage sustainable over time in the always changing
market since competitors may “benchmark” and copy our product
3. Natura core competencies, triple bottom line management, network of relationship network, products and concept,
allows the firm to reposition their brand as a problem solver of economic and social problems such as to poverty
and equality. This business values strengthening the brand legitimacy and reputation, produce more value to
shareholder and eventually implement sustainable value model.
4. Innovation with low investment can be conducted by collaboration with universities and research center for product
development.
5. Success of Nature for Globalizing:
● Product development through innovation
● Using eco-friendly product (natural product)
● Working toward sustainable environment and social support
● Good Marketing Strategy
● Using right people with fully commit to company.
Recommendation
1. Implement local adoptions for sustain Natura’s business in foreign country which is suitable with the culture and
behavioral of customers there

1. Natura expansion will continue at the same level of speed by using technology as distribution technology. This
technology involvement should support consultant by fulfilling gap that could boost their productivity as well as
opening multi channel shopping experience for customers.

1. Natura should transform its direct selling business model into relationship approach by encouraging more
consultants not only as seller but also acting as agent of social transformation that could drive sales through
personal relationship.

1. Providing soft skill training for increase confidence of the new consultants to face the market and push them be
more commit to the company by inform the reward at certain achievement
Thank You
Analysis: SWOT
Strength Weakness
- Very high profit margin of 24.5%
- Natural, environmental friendly product - Premium product price might not be accessible for
- High innovation rate, 65% of revenues come from <2 years product lower income customers
- Unique sales channels using word of mouth and sales consultant’s - Environmental-friendly product might not be an add
community (able to reach the inaccessible market) value for several people
- Loyal sales consultant that have been raised from underprivileged
background and have high salary, also provided with financing scheme
- Low R&D cost and tax incentives from partnership with universities

Opportunity Threat
- Other competitor such as Loreal offer higher value
- High growth rate for natural cosmetics, outpacing any other beauty products at lower price might snatch Natura’s price
products sensitive customers
- Plan for international expansion - Rising new entrants with similar natural beauty
products
- Finding the right people to implement the
philosophical value of the company