Neutrogena SWOT & Value Chain Analysis

SWOT

Strengths	Opportunities
1. Availability in many countries such as the USA, the UK, Canada 2. Has a wide product range like cleansers, moisturizers, sun protection, fairness, anti-aging etc 3. Good Supply chain and distribution network 4. Strong advertising media through Ad campaigns 5. Associations with celebrities help in creating a string brand image	1. To enter rural markets  2.Launching products for lower middle class 3. Partner with hotel chains, clinics, hospitals 4. Position the brand globally 5. Target groups that show the highest growth potentials
Weaknesses	Threats
1. An overabundance of overlapping anti-aging products that is perennially confusing for consumers 2.Despite being a high quality product, its global reach is limited 3. A narrow market segment covered by its positioning	1. Local brands and other international brands 2. Cheaper and less medical-like treatments 3. strong competitors without and within the industry for cosmetics 4. copying of technology

Value Chain

Infrastructure & Human Resource Management

Specialists mention, that Neutrogena’s organizational structure is its major weakness because it is decentralized. This makes other departments products to be cannibalized as well as making the control of the company difficult. The company’s structure is more decentralized due to the many sub units and departments put in place. This decentralized system makes it even more difficult in the minimization of product cannibalization from different departments also the organization's control.

Technology Development & Procurement

Neutrogena spends a lot on scientific research. The company brings innovation to its products through its efficient research and development department. For instance, Neutrogena examined thousands of natural ingredients to find the best bionutrients, such as Peruvian Tara Seed, to promote healthy-looking skin. In addition, Neutrogena Neuturals uses environmentally sensitive post-consumer recycled material in its packaging and built a first-of-its-kind green server, which runs the brand’s website solely on solar and wind energy. In overall, the products Neutrogena delivers have no perfume and only mild cleansing properties. This involves more expensive R&D and manufacturing processes than its competitors have, which is of course a trade off, but is necessary to remain true to the brand. Neutrogena advertises in medical journals, attends medical conferences, and performs at its own skin-care institute. Every department and activity within the Neutrogena value chain is designed and configured to fulfill its mild mediclinical promise.

Due to some restrictions and legislations in terms of how certain chemicals to be used, Neutrogenais put under the obligation of producing only products that are safe with no harmful substances.

Inbound & Outbound Logistics

The product is marketed and distributed uniquely by using a large sales force that calls on dermatologists. The distribution of Neutrogena products is in over 70 countries.  

Marketing & Sales

Neutrogena avoids price promotions, sends direct mail to doctors. In choosing this specialist position, Neutrogena had to stay away from the popular market of the deodorants and skin softeners that many customers like in their soap and also sacrifice large volume potential of selling through supermarkets.

The prices are usually lower than those of competitors so as to make its products affordable and at the same time ensure customer satisfaction. It is also important that Neutrogena recently started to use mass customization to meet the needs of each and every customer. This mass customization has gained a lot of ground in the corporation’s quest of satisfying its customers. Neutrogena products are available in many departmental and drug stores and are easily bought over the counter or from online portals.

Neutrogena does a lot of advertising for its products so as to make consumers aware of the products existence. The brand relies on a host of celebrity actors and models like Diane Lane,Jennifer Garner and Vanessa Hudgers , Natasha Mcelhone to build its popularity. Although celebrities create an aura of premiumness for the brand, the real driver for the brand's acceptance is the quality and efficacy of the products. This production promotion is done via promotion packs, free gifts, personalized deliveries to consumers, among others. Neutrogena has also come up with a strategy of placing its products for sale at designated places where the targeted customers frequent. For instance, these places comprise of beauty salons and supermarkets. Also recently Neutrogena began selling its products online.

Service

In 2011 Neutrogena launched Wet Skin Sunblock Spray, the first sun screen designed to be applied directly to wet skin. The sprays quickly became the top-selling new products in the sun category. Also in 2011, Neutrogena Corporation launched the first products in its line of Neutrogena Naturals face and lip products. The five products are, on average, 94 % naturally derived. Neutrogena’s variety-based products positioning strategy is based on a “kind to skin”, residue-free soap formulated for pH balance. Its target markets are dermatologists and drug stores.

An online portal called Neutrogena skin iD acts as a virtual dermatologist. A kit of skin solution is recommended to users by the virtual dermatologist  after the users’ subjection to a querying session about their skins and themselves.

Conclusions

Neutrogena has a unique value chain. It is probably in many ways less efficient and more expensive. But from the other hand, it creates unique attributes of the brand and long-term competitive advantage.