Executive Summary
With the ever-competitive market, the only family-owned Zoony Skin Care company known for their top quality products faces a tough time that will be a first of its kind. From a market share perspective, it is clear that the influx of newcomers and the move to digital marketing have undermined Zoony’s market share, so the company is forced to modify its strategies (Cailluet, 2023). In this case, the company has proposed a unique strategy to revive the company’s line of products and reputation in the market setting a competitive advantage that will also enable the company to continually grow in an organizationally sustainable manner. This business case suggests a new range of eco-friendly, individualized skincare products that use cutting-edge biotechnology and AI-powered skin analysis techniques. In this way, this innovation addresses the growing customer desire for sustainable and customizable skincare solutions. Zoony Skin Care is positioned to transform the skincare experience for environmentally aware and tech-savvy consumers by embracing biodegradable packaging and leveraging the power of data analytics to provide individualized product recommendations.
This strategic innovation is projected to have the following impacts:
Stronger Brand Image: Positioning Zoony as a pioneer in sustainable and individualized skincare.
Market Expansion: Reaching a larger audience, especially younger, eco-conscious customers who appreciate sustainability and customization.
Increased Customer Loyalty: By providing individualized skincare regimens that adapt to individual needs, we encourage repeat business and stronger customer connection.
Revenue Growth: Leveraging premium product offerings and a growing market segment focusing on eco-friendly items.
Operational Efficiency: Using AI to manage inventory and provide customer insights, hence decreasing waste and improving the customer experience.
Implementing this unique approach will necessitate a comprehensive redesign of Zoony’s product development, marketing, and delivery methods. This business case analyzes market opportunities, and potential hurdles, and outlines a strategy for commercializing this idea. Zoony Skin Care will not only overcome current hurdles but will also cement a leadership position in the developing skincare sector if it adopts this innovative strategy.
Statement of Problem and Need
Zoony Skin Care has proven to be a provider of high-quality skincare products, with a dedicated customer base and a well-regarded position in the local market. However, the skincare company has seen considerable changes, especially in the aftermath of the epidemic. For instance, the rise of multiple competitors who use internet channels to reach consumers has severely reduced Zoony’s market presence. This saturation has resulted in a drop in Zoony’s revenue, a rise in marketing costs with declining results, and a general decrease in business turnover. Furthermore, consumer behaviour and preferences have changed, with a noticeable shift toward natural skincare cures and internet purchasing, which Zoony has been hesitant to accept and incorporate into its business strategy.
There are significant challenges facing this company and they include; an increased competition where the introduction of new companies to the market, particularly those with strong online strategies, has heightened competition, and this has made it difficult for Zoony to maintain its market share. Also, changing Consumer Preferences is an accelerated demand for natural and organic skincare products (Amberg and Fogarassy, 2019). Zoony’s sluggish reaction to these market changes has reduced its relevance to the modern consumer. Moreover, the company’s old marketing techniques have not been as effective in the digital age, resulting in more expenses and less impact. Similarly, operational inefficiencies where failure to implement new technology for operations and customer engagement has resulted in inefficiencies and lost possibilities for tailored marketing. Lastly, there are sustainability issues where the current consumers are increasingly concerned about the environmental impact of their purchases. Zoony’s current offers do not include the essence of sustainability.
These concerns call for an immediate innovation remedy for Zoony Skin Care. The company has to reinvent its product line to include natural and sustainable offerings, revamp its marketing strategies to successfully utilize digital platforms, and initiate new technologies for streamlined operations and personalized customer engagement to regain its competitive advantage and appeal to a broader demographic. The company’s capacity to adapt to changing industry dynamics and consumer tastes will determine its long-term market success and sustainability.
Discussion of Alternative Options
In response to the issues in this company, Zoony Skin Care’ can consider various approaches. For instance, improving its online visibility through e-commerce and social media. Also, it can consider product line expansion with a personalized range of products. A wide range of customized products can improve the brand image of this company addressing the need for personalized skincare solutions for clients (Fajartriyani, Raharja and Dai, 2020). The company may also introduce natural products that reflect current consumer trends toward health and sustainability. Although this option is promising, it calls for major R&D efforts by this company. It may also consider using eco-friendly packaging and sustainable sourcing procedures.
Recommended idea and why is it innovative.
The recommended innovation idea for Zoony Skin Care can be termed as a Smart Skincare System. This system incorporates natural, organic, product lines with AI-enabled recommended customized skincare (Chan et al. 2021). This app uses AI and machine learning to assess customers’ skin types and conditions and suggest appropriate skincare routines from Zoony’s range of new eco-friendly products.
This idea provides a personalized, sustainable, and digital solution for Zoony Skincare in the current dynamic market space. For instance, by applying AI, Zoony can provide more personalized skincare tips for each customer which would be a typical phenomenon in well-furnished dermatology clinics (Siddiqui, Khan and Dey, 2022). In addition, such an approach targets the changing demographic on environmental consciousness with a focus on natural and possibly even organic products placed in eco-friendly packaging. Lastly, the app would allow direct consumer engagement that transforms the digital experience into an interactive journey of skincare (Paintsil, 2019).
Market Sector Analysis
There is a paradigm shift in the skincare industry inclined towards sustainable and natural products and the utilization of technology through modern digital platforms. The opportunities of the recommended Smart Skincare System approach in Zoony include the demand for natural products where this company can tap into a larger market segment. In addition, the use of technology through AI and machine learning creates room for personalized skincare solutions for clients increasing the company’s consumer base. However, the skincare sector is extremely competitive, with many brands seeking consumer interest which may be a threat for this company. Also, the approach relies on technology which requires substantial investment in data security. Lastly, persuading buyers to switch to new, innovative products may necessitate significant advertising investments.
Expected Benefits & Risks Analysis
Benefits
Market Differentiation: The Smart Skincare System creates a competitive advantage for Zoony in a saturated market by emphasizing individuality and sustainability.
Improved Consumer Engagement: The AI-powered software encourages ongoing connections with customers, which boosts brand loyalty and consumer retention (Rane, 2023).
Sustainable development Leadership: Zoony’s dedication to eco-friendly products positions the company as a sustainability leader, attracting environmentally aware customers.
Risks
High Installation Costs: Developing and integrating complex artificial intelligence technology, as well as obtaining sustainable materials, can be costly (Nishant, Kennedy and Corbett, 2020).
Data Privacy Concerns: Collecting and analyzing skin data via an app raises issues about user privacy and security.
Mitigation Strategy
Cost Management: The company may seek strategic alliances and grants that focus on long-term company breakthroughs to offset initial expenditures.
Data Security: To increase consumer trust, Zoony Skincare can implement effective cybersecurity safeguards and transparent data regulations.
Consumer Education: Zoony Skincare may need to conduct extensive marketing efforts emphasizing the Smart Skincare System’s benefits and ease of use to increase adoption.
Resource requirements and ways to access them and the Budget
The basic requirements for implementing the Smart Skincare System include; investment in software development for the AI-powered app, which is approximate cost for both initial development and setup is $100,000. Product Research and Development (R&D) which includes the creation of new natural and organic product lines, and sustainable packaging materials is estimated to cost $75,000 (Rahse, 2020). This amount is considered for formulation, assessments, and finding sustainable components. Marketing is also an essential resource which features digital and social media campaigns and is estimated to cost almost $40,000. Lastly, cybersecurity is also required in this approach and would cost around $15,000 (Kanaska, 2022). In this case, the estimated budget is $230,000 and the possible sources include grants from private entities supporting sustainable businesses. Also, the company may utilize capital available from previous operations and engage family contributions.
Financial return on investment
It is forecasted that deployment of the Smart Skincare System will lead to high improvement in Zoony Skin Care’s financial results. At a start-up cost of $230,000, the new idea will help to record around 20% more revenue annually during the first two years due to rising market differentiation and consumer choice for personalized and eco-friendly products. The break-even situation is then predicted to occur 18 months after product launching, given the continuation of steady sales growth. It is estimated that these elements combined ensure a long-term ROI of 145% over five years, accounting for brand-strengthening dynamics, and improved market share coupled with operational efficiencies. This financial projection highlights the capability of the innovation not only to recover the startup costs but also to significantly increase the company’s profitability to help it improve its market position.
Action Plan
1st Phase: Development and Testing (4 months)
Activities include developing AI apps, creating new product lines, and conducting user and product testing. The responsible teams are the R& team, IT team, and Marketing team.
2nd Phase: Integration of Production and Supply Chain Integration (3 Months)
Operations include scaling up manufacturing for new products, integrating sustainable packaging, and ensuring supply chain sustainability. The Involved Parties are the Operations Manager, Supply Chain Coordinator, and Sustainability analyst.
3rd Phase: Marketing and Consumer Education (6 Months)
Activities include developing a digital marketing strategy; and running educational pop-ups about customization and environmental awareness. The relevant coordinators are the Marketing Team, Digital Strategists and Customer Service Representatives.
4th Phase: The Official Launch
Activities include the formal launching of the Smart Skin Care System; initiating app downloads; and activating online and in-store purchases. The responsible Parties are the CEO and, Sales team.
5th Phase: Close Monitoring and Necessary Adjustment (6 Months)
Activities include analyzing sales information, monitoring market response and adjusting promotion methods. The marketing team and data analysts are responsible for this phase
6th Phase: Expansion (18 Months)
At this point, through the business development manager and the IT team, Zoon Skin Care can increase offerings based on user feedback; investigate new markets and distribution channels; and enhance digital app functionality (Khairunisa and Sunitiyoso, 2023).
Conclusion
While concluding the Zoony Skin Care’s Smart Skincare System strategic initiative, a deployment of entire tools for knowledge and IP development, retention, and protection is crucial. To develop a personalized application using the most technologically advanced platforms for software development along with AI algorithms as well as implement digital knowledge management systems to centralize precious insights creating an ideal setting of constant innovation. Yet also of paramount importance is IP protection through IP management software and strong cybersecurity mechanisms aimed at preventing IP theft and securing the exclusiveness of technological novelty. This multifaceted approach not only affirms Zoony’s edge but also lays the groundwork for continued leadership in personal and state-friendly skincare; a solid strategy for engaging IP within the digital and competitive landscape of the skincare sector.
References
Fajartriyani, A.P., Raharja, S.U.J. and Dai, R.M., 2020. Competitive Strategies of Indonesian Skincare Clinics: Study on Rafa Health and Beauty Lifestyle, Bandung, Indonesia. Review of Integrative Business and Economics Research, 9, pp.80-87.
Rane, N., 2023. Enhancing customer loyalty through Artificial Intelligence (AI), Internet of Things (IoT), and Big Data technologies: improving customer satisfaction, engagement, relationship, and experience. Internet of Things (IoT), and Big Data Technologies: Improving Customer Satisfaction, Engagement, Relationship, and Experience (October 13, 2023).
Siddiqui, S., Khan, A.A. and Dey, I., 2022. Internet Technologies for Personalized Care. In Information and Communication Technology (ICT) Frameworks in Telehealth (pp. 173-189). Cham: Springer International Publishing.
Nishant, R., Kennedy, M. and Corbett, J., 2020. Artificial intelligence for sustainability: Challenges, opportunities, and a research agenda. International Journal of Information Management, 53, p.102104.
Cailluet, L., 2023. Radiant rivalries: competition, coopetition and non-market strategies in the emergence of skincare and beauty services in France, 1900s–1970s. Entreprises et histoire, (2), pp.32-46.
Chan, H.T., Lin, T.Y., Deng, S.C., Hsia, C.H. and Lai, C.F., 2021, December. Smart Facial Skincare Products Using Computer Vision Technologies. In 2021 Asia-Pacific Signal and Information Processing Association Annual Summit and Conference (APSIPA ASC) (pp. 1674-1677). IEEE.
Paintsil, A., 2019. Consumer engagement with modern luxury direct-to-consumer brands on social media: A study of glossier. University of Delaware.
Khairunisa, N. and Sunitiyoso, Y., 2023. SCENARIO PLANNING TO DEVELOP BUSINESS EXPANSION STRATEGIES IN THE SKINCARE INDUSTRY. Jurnal Ekonomi, 12(02), pp.880-887.
Rähse, W., 2020. Cosmetic Creams: Development, Manufacture and Marketing of Effective Skin Care Products. John Wiley & Sons.
Kanaska, S.D., 2022. IS THE FUTURE OF BEAUTY PERSONALIZED?: CASE STUDY FOR MICROBIOME SKINCARE BRAND SKINOME.
Amberg, N. and Fogarassy, C., 2019. Green consumer behaviour in the cosmetics market. Resources, 8(3), p.137.
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