INGLOT's competitive advantages and five-year strategic plan

INGLOT'S STRATEGIC PLAN

Strategic Plan

Firm-level factors contributing to INGLOT's competitive advantage

Country-level (macro) factors that have contributed to INGLOT's competitive advantage

Sustainability of INGLOT

INGLOT's strategic plan for the next five years

Strategic direction and goals

Organization of INGLOT's strategic plan

Environmental scan

Sources of agility

Sources of absorption

Sources of agile absorption

Strategic action plan by year

INGLOT's strategic plan

Firm-level factors contributing to INGLOT's competitive advantage

INGLOT is committed to research and development in order to meet customer needs. One is the company's Freedom System concept that enables the company to provide exemplary products for its customers and allow potential customers to experiment with different colors and shades of their makeup products. This is one major source of competitive advantage since it allows INGLOT to be competitive in their product development and the success of their innovation is seen in product acceptance for example the breathable nail enamel that was largely enjoyed by Muslim women (Necas and Huy, 2014).

The company's production concept is also a source of competitive advantage. The company has state-of-the-art production facilities that it fully owns. This facility allows the company to be a cost leader since unit costs are lowered since its company's production is done at low-cost locations. This also allows the company not to compromise quality of its products since it can monitor production with ease. Since the company owns the production facilities, changing the product mix or introducing products becomes very easy because it only involves internal changes (Necas and Huy, 2014).

INGLOT's strategy is also a source of competitive advantage for the company. INGLOT has concentrated on its cosmetics line for face, eyes, body, nails, and lips. This concentrated product offering allows the company to highly specialize in its products and therefore offer customers the best quality and most innovative products possible (Necas and Huy, 2014).

INGLOT's pricing strategy also affords the company competitive advantage. INGLOT's prices are in the medium range compared with its competitors. This pricing strategy allows INGLOT to provide customers with high quality products at a reasonable price thus affording the company competitive advantage for its products (Necas and Huy, 2014).

INGLOT's competitive advantage also comes from its distribution strategy. INGLOT operates its own stores and subsidiary companies in Poland, Australia, UK, USA, and Ukraine. This allows the company to concentrate its product offering to meet local consumer needs, and keep prices low compare to those of competitors to afford the company competitive advantage. At the same time, INGLOT has used other avenues such as franchising and partnering with large retail chains to improve the reach of their distribution activities (Necas and Huy, 2014).

Country-level (macro) factors that have contributed to INGLOT's competitive advantage

At the country level, INGLOT has also enjoyed several sources of competitive advantage. First is the company's efforts to select local partners who were skilled in the country's market potential. For example in Canada and the Middle East, INGLOT has benefited greatly from local entrepreneurs who exported the concept of INGLOT into these international markets (Necas and Huy, 2014).

INGLOT's strategy to create a unique combination of high quality products and affordability has led the company to gain competitive advantage in international markets. In countries such as Poland, Australia, UK USA, and parts of Europe, the company has been able to tailor their product offering to the market thus gain market share (Necas and Huy, 2014).

Sustainability of INGLOT

INGLOT has expanded into 44 countries in the world by conquering the internal and external constraints that hinder the company's expansion and successful operations. This has meant the company has diversified its product offering to tailor them to the market they operate, and has allowed the company to sustain its growth into the different markets it operates. The company's pricing strategy also allows for sustainability since the company has kept the cost of production of its products low thus passing these cost savings to consumers with medium-pricing of its products (Necas and Huy, 2014).

INGLOT's strategic plan for the next five years

Strategic direction and goals

The strategic direction of INGLOT is to increase its expansion into new markets and foothold in the markets, which it currently operates. This means the company should leverage its strengths to take up opportunities for growth and work to sort out their weaknesses in order to mitigate threats (Simons, 2010). The five-year period covered by this strategic plan involves assessing INGLOT's current approach to the business and engaging stakeholders to deepen their expansion.

The goals of this strategic plan are thus to improve its product offering by understanding customer needs better and creating partnerships that enable the company to model their products on consumer needs. The company also aims at developing a highly motivated and skilled workforce to help the company achieve their mission (Brown et al., 2001). Through this strategic plan, INGLOT's product and brand awareness will be improved by increasing visibility and attracting support to successful brand and product integration.

Environmental scan

INGLOT has succeeded in creating a blue ocean by simultaneously creating value for its consumers and keeping costs low. INGLOT's products are highly valued by its consumers as is evident in the company's growth. This approach to creating a blue ocean has other important elements. One is the barrier to imitation that INGLOT has created. By being innovative and providing products that consumers can experiment with, INGLOT has succeeded in creating barriers to competitor imitation thus creating value in its products.

INGLOT has created a consistent pattern of growth and innovation that allows the company's products to remain attractive to current and future customers. As suggested by Kim and Mauborgne (2007), instead of fighting with the competition to steal market share, the company created their own blue ocean of high quality products at an affordable price.

Sources of agility

In conducting a scan of INGLOT's operating environment, it is important to highlight the sources of agility that allows the company to spot opportunities and exploit changes in the market towards success (Sull, 2009). First is the operational source of agility. INGLOT has been able to cut costs by using the latest technology thus offering high quality products at relatively lower prices. Innovation has also been an operational source of agility since INGLOT has leveraged real-time market data and performance goals to introduce new product offerings.

The company portfolio has also been a source of agility. The company, being a family business is able to reallocate resources with ease from business units or products that are less promising to those that offer better returns on investment (Sull, 2009). INGLOT also has a talented and experienced executive team that offers diverse information on the business performance as well as centralized control of resources. This means the company has the required managerial attention to focus its activities.

Strategically, INGLOT has also created a source of agility (Sull, 2009). That allows it to seize growth opportunities by scaling up their business as need arises and implementing innovative changes in products to grow their market share. INGLOT's strategy has used creative mechanisms to mitigate risk and wait for the right time to embrace opportunity.

Sources of absorption

INGLOT has several sources of absorption that allow the company to withstand competitive forces and other threats to the company's operations (Sull, 2009). The first is the company's low fixed costs. The company has low costs of production of their products. This allows the company to price their products at medium price levels and also gives the company ability to survive price wars with competitors. The company also has tangible and intangible resources, which generate profits in the short and long run. These resources enable the company to embrace opportunities for growth and shift in markets.

INGLOT has also managed to lock in customers by providing them with high quality products at affordable products. These allow for high levels of customer satisfaction and loyalty since switching to competition means the consumers will pay high costs for switching.

Sources of agile absorption

Sources of agile absorption are important in deploying the company's capabilities in different combinations as dictated by market trends and customer needs. The first source of agile absorption is the tactic of building absorption without negatively influencing agility. For INGLOT, this is achieved through having low fixed costs. The other source of agile absorption is the tactic of maintaining an agility culture. For INGLOT, they inculcate a culture of agility for their employees, for example, by keeping costs low by leveraging low cost labor in its production, research, and development facilities.

Strategic action plan by year

Year

Activities

1

Product development: INGLOT will be involved with strategic planning and plan implementation by conducting market research to understand customer needs in its operating locations.

Service delivery: INGLOT will identify and prioritize markets to expand to.

Human resources: Staff will be reorganized to achieve efficient levels of productivity. Staff will also be trained to ensure they understand the company culture effectively and their roles.

2

Service delivery: the company will develop partnerships with businesses in locations where expansion is planned. INGLOT will also develop an expansion plan based on one model. This involves evaluation of different expansion models such as partnering and franchising and choosing the best fit.

Human resources: the company will update the training activities for their staff.

Resource development: INGLOT will plan for expanded engagement of members of staff. They will also seek resources such as leases, patents, and partnerships needed for expansion.

3

Service delivery: INGLOT will strengthen their service delivery activities to date. They will formalize the expansion model chosen to apply it in all locations. The company will also expand its initiatives to assess customer satisfaction with products and educate customers on optimal product use and other important aspects of the products.

Human resources: INGLOT will review the current staff and determine human resource development needs of staff members to be met through training activities

Resource development: INGLOT will implement store marketing planning to strategize and coordinate marketing activities across all store locations.

4

In this year, INGLOT will evaluate their action plan and develop an expanded action plan.

Service delivery: INGLOT will continue to develop and sustain their expansion activities and initiatives including marketing for new partnerships needed. INGLOT will also dedicate resources to support building of new partnership relationships.

Human resources: INGLOT will continue to focus on development of their staff including supervisors and management.

Resource development: INGLOT will strengthen efforts to allocate resources efficiently

5

In this final year, INGLOT will continue to develop the activities detailed in this action plan by increasing the number of consumers they support across their program.

INGLOT will also evaluate their progress and detail the successes and failures to produce lessons learnt for future implementation.

INGLOT will also plan their new strategic plan for the next five years.