Company Star Product Real (Consumer)
Alberto-Culver Unilever 2011 TRESemmé
High Value Professional- Style Authority
ease global expansion. CoverGirl with little
global business, will move along neatly now
that it has Olay ingredients to spark recognition for both Permission-to-Believe and
Permission-to-Buy. Brilliant marketing.
Bare Minerals News/Category
QVC Top Share +
Top Share 1989 +
Mascara + line High Value
(Nothing Special) (Old) Hollywood Global appeal
Neutrogena J&J 1994
Soap Bar into
New skin care
Sinful Colors Revlon
Interestingly, had a company been able
to read the tea leaves, it might have been
able to pluck some of the low-hanging fruit
before harvest time, and would have saved
millions. But here’s the anomaly. If these, essentially entrepreneurial companies were
bought (too) early, would they have
achieved their full potential under the heavy
hand of a major company? In most cases,
the entrepreneur gets a payout, a two-year
contract, and a new set of golf clubs. What
ultimately counts is the new set of golf clubs!
VO5 will probably be divested, thanks to
concerns raised by the US government. Shiseido’s purchase of Bare Escentuals gives it a
powerful mineral line and a pipeline to
QVC. Coty’s acquisition of OPI and Philosophy reduces its dependence on fragrance.
And finally, Revlon bought Sinful, to get that
low-price business in nails/cosmetics as well
as entrée into the lower-priced/younger
beauty business, which has not been fruitful
in past attempts with the Revlon brand.
Whew! Note that they are all strategic
buys. Now, back to the tea leaves. Looking
forward five to ten years, it seems clear that
the majors will focus on two strategies; true
global distribution and expanding brands
into new categories with lean, but full lines.
That’s easy to say, but not so easy to do, as
many have learned. The first strategy of
course, is to enlarge the total business, and
the latter is to prevent some parvenu from
blocking out a niche, such as Sally Hansen in
nails. And watch for crossover branding to
*P-T-B = Permission to Believe; + global expansion potential for all
Note: Examples point to reasons for high purchasing interest at that time.
Smashbox Lauder 2011 Primer Innovative products New EL Distribution Consumer Expertise +
Now, to the current era—strategic consolidation based on perceived weaknesses in
the existing product or distribution lineup,
with global expansion the brass-ring of opportunity for all (see the last column on the
chart). Unilever’s Alberto acquisition provides a buildable, niche moisturizing line, St.
Ives, as well as strong brand names in hair
care, Nexxus and TreSemmé. Oddly enough,
If you are a small company and you’re
mulling a buyout, on whom should you
focus? Who is missing products like yours?
Who can use your distribution channels?
Who can use your brand to enter a new
product category? You get the idea—what
strategic value do you really have? But, that’s
the end game. In the meantime, three exogenous factors can impact your business—
shifting channels of distribution, social
networking and emerging markets. Those
are the basics for developing a strategy but,
as you know, it’s the execution that counts.
A smaller company’s strategy must be
narrow in focus; try to dominate a single idea
or area. Don’t be swept away by the“global”
fever—don’t dissipate your time, money
and/or creative juices. Done successfully, two
things can happen; a VC will invest, enabling
more rapid growth and line expansion
(Strivectin to Chrysallis), or a major will want
your specific expertise (Smashbox), and you
get to use those golf clubs. But neither will
happen without that singular focus. Is that
what you are doing now? So, if your goal is to
be acquired, focus on some star attractions.
And, ask yourself this question, every day.
“What’s new and innovative about what I
am doing.” Just being different—is not
enough. It must be significant! It might be
helpful to look at our three past columns on
Permission-to Believe, Permission-to-Buy,
and distribution channels.
Lastly, we’d like to let our readers know
that we’re taking our own advice about
“focus,”as we take leave of absence from The
Grayson Report and theBrand-AdAudit
columns. We are ready to launch a radically
different anti-aging skin care concept, all the
while reminded that the world is not waiting
for another anti-aging product. It will surely
consume all of our time (and then some) for
the next year. Stay tuned. Meanwhile, we
sincerely thank you for your continued support these so many years. •