GROUP PROJECT REPORT

Subject name:

ORGANIZATIONAL STRATEGY

Subject code: INS2024

 Lecturer: Dr. Doan Thu Trang

 Group name: Group 3
 Project name: Cocoon Cosmetic

Ha Noi, May 16, 2021

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Members of Group 3

No Member Student ID Participation

1. Nguyễn Lan Anh 18071023 100%

2. Trương Thị Hiếu 17071067 90%

3. Nguyễn Thị Huệ 18071096 90%

4. Lê Thị Lan Phương 19071474 90%

5. Hoàng Thị Minh Ngọc 18071178 90%

6. Lê Nguyễn Linh Đan 18071065 90%

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Table of Content

I. Introduction…………………………………………………………..…1
1. Company overview……………………………………………….....1
2. Development history..……………………………………………….1
3. Vision, mission and core value……………………………………...1
4. Main product…………………………………………………….......2
5. Target customer…………………………………………………......3
II. External environment analysis……………………………………..…...4
A. PESTEL Framework………………………………………….…….4
B. Five Forces Model………………………………………….………8
C. Competitor analysis……………………………………….……….10
III. Internal environment analysis……………………………….………...13
A. Value chain…………………………………………….…………..13
B. VRIO Framework…………………………………….……………18
IV. SWOT analysis…………………………………………..…………….19
V. Generic current business strategy………………………..…………….21
VI. Business strategy in coming 3 years…………………..……………….22
1. Target customer…………………………………..………………...22
2. Generic business strategy………………………..…………………22
3. Build competitive advantage…………………..…………………...22
4. Overall strategy for the business in 3 years…..…………………….22
5. One-year marketing plan……………………..…………………….24
VII. References……………………………………..……………………….28
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I, Introduction

1, Company Overview

Name: The Cocoon original Vietnam

Industry: The vegan cosmetic industry

Main market: Vietnam

Slogan: “real quality, real vale”

2, Development History

Cocoon was established in 2013.

7 years ago, Cocoon officially launched to users with two main products: squash extract
and pomelo peel, which specializes in treating acne and fading dark spots.

After 4 years of investing in research and product improvement, Cocoon has officially
returned and successfully conquered Vietnamese consumers in a new, professional look,
with outstanding quality that is not inferior to famous brands from abroad.

Over the years, Cocoon has conquered customers by continuously launching products with
very benign and gentle nutrients from Vietnamese nature.

3, Vision, Mission and Core Value

+ Vision: Cocoon was born simply to beautify the Vietnamese people from natural and
familiar sources. Cocoon researches and constantly produces 100% vegan cosmetic
products that keep all the nutrients of Vietnamese plants, safe, benign, do not use
ingredients from animals and say no to animal testing.

+ Mission: A pioneer in the field of beauty and proud to be the first vegan cosmetic
produced in Vietnam, Cocoon Vietnam has a mission: “Applying the benefits of food
around us combined with the understanding of science to create safe and effective cosmetic
products for everyone.”

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+ Core value: Cocoon produces products of clear plant origin, combined with vegan active
ingredients that are skin safe, effective, and non-animal derived.

=> 100% ingredients of a clear origin and safe for the skin: All ingredients in Cocoon
products are certified by domestic and foreign raw material suppliers. All cosmetic
products, before being put on the market, are studied for 12 to 24 months, tested to pass
the tests of microbiology, pH, stability over time, according to temperature irritation and
must meet all regulations and market circulation according to the regulations of the
Ministry of Health of Vietnam. It can be said that the first thing when customers are
interested in a product is the origin and ingredients. With a clear origin and 100% natural
ingredients, we believe that customers will feel secure to use Cocoon's products.

=> 100% vegan: Cocoon does not use the animal-derived ingredients commonly found in
cosmetics such as honey, beeswax, fleece, sheep placenta, snail fluid, shark liver oil, silk, ...
Instead Cocoon then manipulates and maximizes the potential of active ingredients, plant
extracts without the assistance of materials derived from animals. With rich resources
available from nature, Cocoon knows how to use and exploit to the maximum potential to
create the most perfect products for consumers.

=> 100% never tested on animals: Cocoon cosmetic formulations are researched and tested
by either in-Vitro test or on volunteers (in-Vivo test). At the same time, the raw material
suppliers also accompany and commit that they also do not test on animals in the research
and production of that material. Cocoon does not perform tests on animals such as rabbits,
mice, fertilized egg yolks ... because of its humanity and immutable promise to customers
and the community. This is humanity and we appreciate this action by Cocoon because
they are conscious of animal protection, not cruel to animals.

4, Main Product

Skincare cosmetics (Toner, Serum, mask, cleanser, face exfoliation…)

a, Product description

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Characteristics: Cocoon cosmetic skin care currently has 4 main lines:

Squash line: often comes with a combo of squash + tea tree tea + chili, effective in treating
acne. Suitable for oily skin

Rose line: has good moisturizing effect, goes with many nutrients such as vitamins, HA,
niacinamide, ... so it is usually suitable for dry skin.

Coffee line: specialized for exfoliating.

Turmeric line: turmeric essence has antioxidant effects, enhances the ability to whiten skin,
fades dark spots.

Ingredients: Cocoon products often contain extracts from popular plants in Vietnam such
as squash, aloe, cheeks, grapefruit, rose, cafe,....

b, Price

95.000VND-741.000VND for combo 5 products

c, Benefits

All Cocoon products ensure that the elements of vegan cosmetics do not use sensitive and
irritating ingredients, so Cocoon is also the favorite cosmetic brand of many pregnant
women - those who are in the period. It is most sensitive when anything used on the skin
can affect the baby. Thus, Cocoon products can satisfy all skin types.

d, Reason choose product

Cocoon is the first Vietnamese vegan cosmetic brand. 100% ingredients of a clear origin
and safe for the skin.

Natural ingredients, do not cause skin irritation

Neither tested on animals nor using animal-based ingredients. Because of the humane
factor, not tested on animals, with safe, benign, nutritious plant ingredients, vegan
cosmetics are increasingly receiving more favor from consumers.

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5, Target Customer

People who care about product safety (chemical sensitivity)

Age: 16-40 (at this age people often experience a lot of skin problems caused by stress,
atopic or puberty)

Gender: Female and Male

Income level: Middle and above

Living in: Ha Noi and HCM city

II, External Environment Analysis

A, PESTEL Framework

1, Political

According to the current law on investment attraction of Vietnam 2020, we are focusing
on investment incentive policies, because these policies contribute to economic
development in Vietnam, and encourage investors. The government has set up many
policies to increase trade openness such as policy for FDI attraction. Vietnam has an
export-driven growth model, therefore, it supports trade promotion to encourage exchanges
with other countries. On the other hand, this is a threat to Cocoon, domestic firms in this
industry might face stiffer competition because of potential entries of strong multinational
corporations.

2, Economic

Unlike many others, the beauty industry is quite resistant to economic recessions. Beauty
products have become an indispensable demand for consumers. In a global comparison,
the Asia Pacific region accounts for the largest share of the cosmetic market. Its market
size was forecasted to reach around 127 billion U.S. dollars by 2020. Within the region,

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Vietnam has become a promising market for cosmetics manufacturers. As the demand of
consumers has been increasing, Vietnam's import of cosmetics has more than doubled from
about 355 million U.S dollars in 2010 to over 790 million U.S. dollars in 2018. Notably,
the import value has been considerably higher than the export value in the last few years.
The average GDP growth rate has increased from 6.42% in 2010 to 7.02% in 2019 [1].
GDP per person peaks at $2,985 in 2017 and adjusts to $2,715 in 2019 [2]. The inflation
rate is 9.2% in 2010 and decreases to 3.6% in 2019 [3]. Vietnam consumer spending for
2018 is $165.53B, a 214% increase from $77.17B in 2010 [4]. With such steady economic
growth, higher income level and lower inflation rate could be inferred as contributing to
the rise in consumer spending. Therefore, this is an opportunity for the whole industry.

3, Sociocultural

As of 2020, Vietnam has a current population of 97,338,579, an average annual population

growth rate of 0.96% [5], and an increase from 31.33% in 2015 to 36.35% in 2020 in the
rate of Vietnamese urbanized population [6]. The growing numbers of urbanized citizens
is highly visible in the near future. This is an opportunity for the industry because it ensures
the good growth rate brought by rising future demands of these citizens in coming years.
In addition, Nearly, half of the total population (45.7%) are in the prime working age group
(ranging from 25 to 54) [7]. This population, compared to their ancestors 20 years ago,
receives better education and earns higher income. Therefore, they, especially those living
in urban areas, are willing to spend more for safety skincare, organic cosmetics, and
consequently, start to look for more choices of skincare. This is good news to the industry.
Besides, facing the effect of the COVID-19 epidemic, Vietnamese consumers become
more health-conscious. As a result, it is an opportunity for the whole industry. In order to
protect health, consumers are increasingly interested in ingredients in cosmetics. They
consider allergy ingredients in cosmetics, love natural or vegan cosmetics, no paraben, and
it is safe for the skin. This trend is an opportunity for the industry. Finally, customers will
try an assortment of products until they find the one. When they find the suitable cosmetic
brands, they will become brand loyalists. Especially, Vietnamese consumers are more

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inclined to foreign brands because of the perception that foreign products are generally of
better quality. However, once Vietnamese consumers form their trust in a brand, they will
likely become loyal consumers. This is a threat to domestic firms in the industry because
more effort is needed in acquiring their loyalty, especially under the pressure of consumer
preference for non-native products. That’s why new beauty companies are constantly
fighting to get attention in such a saturated market. They change up packaging, container
sizes, and even the font on the bottles – all to maybe grab the attention of the customer for
3 seconds.

4, Technological

The internet really did revolutionize the beauty industry. You can buy almost any product
and get it delivered to your home in a day or two. With the growing internet and smartphone
penetration into daily life, many Vietnamese prefer to buy online due to its convenience.
This is both threat and opportunity for the industry. Being a threat, consumers become
more price-conscious because they can easily compare products in an online environment.
For example: Any new beauty brand can sell their products through Shopee or set up a
shop on Lazada, Tiki. The customers can read the negative reviews from the buyers and
they also compare the price of products in any online sales channels. However, being an
opportunity, this assists the quick spread of information to a large number of people
economically. From reviews on the web, they can know whether the product is useful or
not, the main ingredients in products, the origin of the product as well as the benefits that
the product brings.

5, Ecological

The beauty industry is focusing more than ever to try and go “green.” Their packaging is
becoming increasingly eco-friendly for less stress on the environment. But there’s still a
growing issue with heavy plastic usage within the cosmetic and skin care segments. In skin
care, an ingredient called “microbeads'' were sweeping headlines for a while. These beads
exfoliated dead skin cells from the face. But, they’re made of plastic and horrid for the

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environment. Therefore, they are gradually improving by using products that are good for
the environment so as to towards the green and clean cosmetics industry. Because of
concerning about pollution and environmental protection, today’s customers are conscious
of using benign and environmentally friendly products. That makes vegan products
especially attractive. This is an advantage for the cosmetics industry made from nature.
Furthermore, to show humanity, cosmetic brands do not use animal testing. One of the
benefits is the show of humanity to animals. Although this is only an emotional and
spiritual aspect, not specifically expressed based on material benefits, the limited number
of animals killed by experiments also means that doing a good deed, bringing more
invaluable spiritual benefits than taking healing pills. Secondly, the handling of carcasses
has always been a heavy burden on the environment, so when not doing animal testing, it
can create a clean and safe environment for the community. This is an opportunity for all
cosmetic brands to make an impression on customer’s hearts.

6, Legal

Ingredients in the beauty industry are tricky. They can be FDA-regulated without also
being FDA-approved. The FD&C monitors ingredients based on their use while the FD&C
ensures there’s misinformation branded on the products. If there are issues, the product
may not reach shelves. They may even require a recall. This action makes customers feel
safe about product quality. Besides, according to Decree 93/2016/ND-CP in regulations on
cosmetic production, products must be safe for customers' health. Consumers' demand for
health and safety is increasing, so this decree is an opportunity for the brand.

From PESTEL analysis, we have threat and opportunity for companies to improve the
quality. First of all, it is a threat. The external factors and trends outlined in this
PESTEL/PESTLE analysis point to various threats relevant to Cocoon. This company
might face stiffer competition because of potential entries of strong multinational
corporations. Moreover, it is a threat to domestic firms in the industry because more effort
is needed in acquiring customer’s loyalty. Growing the internet, consumers become more
price-conscious because they can easily compare products in an online environment.

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Besides, there are many business growth opportunities enumerated in this

PESTEL/PESTLE analysis of Cocoon’s Corporation. With higher income, consumers can
pay more for Cocoon's products. Consumers increasingly love vegan cosmetics so this is
an advantage for Cocoon. Because the internet is more popular, this assists the quick spread
of information Cocoon to a large number of people economically and their packaging is
becoming increasingly eco-friendly for less stress on the environment.

B, Five Forces Model

1, Rivalry among Existing Competitors

The competition in the cosmetics industry in Vietnam is of the highest level because of the
strength of the competitors in the industry. Vietnam’ s cosmetics market is worth $2.3
billion in 2019, but domestic companies pocket only 10 percent of the value. The major
international brands in Vietnam’s cosmetics industry include Maybelline, 3CE, L’Oréal,
Innisfree, M.A.C, Dior, Chanel,… And some prominent domestic brands are SKINLAX,
Dercumar, Thorakao, Cocoon. Cocoon, although not occupying much market share in the
industry, is a prominent vegan cosmetic brand with plant-based products, the first
Vietnamese brand to be recognized by Cruelty Free International, which is considered a
The "gold standard" has world influence. Cocoon also experiences tough competition
because of low switching costs. For example, it is easy for consumers to switch from one
brand to another. The competition is high but the competition is not negatively impacting
the current state due to massive growth of the industry. Despite increasing the number of
companies, the number of buyers is also increasing which is neutralizing the negative
impact of high competition.

2, Bargaining Power of Suppliers

The suppliers have low bargaining power because the raw materials used in the cosmetics
industry are not rare and the suppliers are also available in abundance which makes it easy
for the companies to negotiate. Therefore, the bargaining power of the suppliers is low due
to their high dependence on the companies.

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3, Bargaining Power of Buyers

There are multiple international and local brands available for the buyers to buy from. The
switching cost is also not high from one cosmetic brand to another cosmetic brand although
there is a factor of brand loyalty due to skin sensitivity. But the overall factors are not so
impactful that it restricts the buyers to a particular brand so closely. The availability of the
same quality brand with the same or even competitive pricing has increased the bargaining
power of the buyers. The cosmetic companies have to keep in mind the bargaining powers
while developing the products and setting the prices for the products. In short, the
bargaining power of buyers is strong.

4, Threat of New Entrants

The barriers for the new entrants in the cosmetics industry are there. The expertise required
to manufacture the cosmetics products and the testing of the different products is a complex
process requiring skills and capital. The issue of banning animal testing in cosmetics
industry has further intensified the complexity of the operations in the cosmetics industry
which is a hurdle for the new entrants. The fast market growth neutralizes the negative
intensity of the hurdles which is the reason that the threat of new entrants in the global
cosmetics industry is moderate.

5, Threat of substitutes

The skin and beauty care products have become a need and there is no chance that the
people would not be concerned about the beauty, skin and personal care. This need requires
the beauty, skin, and personal care products in the industry which keeps the threat of
substitutes low. It is important to note that the way and products have changed and evolved
but the need for beauty care products is there and it remains there with radical or
incremental innovations in the products and processing of the cosmetics.

To sum up, the attractiveness of this industry is moderate because of the following reasons:

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Rivalry among existing competitors is high.

Bargaining power of suppliers is low.

Bargaining power of buyers is high

Threat of new entrants is moderate

Threat of substitutes is low

C, Competitor Analysis

In order to get an overview about the market as well as the industry through PESTEL and
Five forces model, Cocoon also need to assess the capabilities of competitors, thereby
building the company’s advantages to compete with other companies. In the vegan
cosmetics market, the competitors of Cocoon analyzed by us include 2 aspects: Foreign
enterprises (Innisfree and The Body Shop) and Domestic enterprises (Giot Lanh).

1, Innisfree

Strengths

Organic ingredients

Recycle containers

Use of Eco-friendly campaigns: Innisfree product’s formula is unique – unlike other

brands. The brand name originated from the William B. Yeats poem “The Lake Isle of
Innisfree." As the name itself implies, INNISFREE pursues beauty in its most natural form.

Recycle containers: Prominent green brand, green tea leaf logo impresses products
extracted from nature - especially from green tea, easy to cause sympathy with consumers.t
this snail mask.

Use 3 years for research and development

The ingredients of our mask are in high quality. Ingredients list: Water, glycerin, butylene
glycol, alcohol, betaine, citrus paradisi (grapefruit) fruit extract, honey extract, PEG-60

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hydrogenated castor oil, xanthan gum, carbomer, ethylhexylglycerin, potassium hydroxide,

aloe barbadensis leaf juice, sodium hyaluronate, citrus unshiu peel extract, orchid extract,
camellia sinensis leaf extract, camellia japonica leaf extract, opuntia coccinellifera fruit
extract, disodium EDTA, phenoxyethanol, fragrance

Innisfree’s real Squeeze Mask in Manuka Honey is a sheet mask that claims to deliver rich
moisture to “dry, stiffened skin”

Innisfree’s factory has many large-scale machines – we can have mass production.

Weaknesses

The selling price is high as the production cost is high.

The package is not attractive enough.

Innisfree cannot throw a lot of money and resources at one product because their company
has many skincare products.

=>Without any doubt, Innisfree products are more popular than Cocoon products. But
recently, young Vietnamese are starting to use Cocoon products more because the price is
cheaper but the product quality is also good.

2, The Body Shop

Strengths

Positioning: The products sold by the Body Shop are all made out of natural ingredients
which are dermatologically safe for all skin types. Even their packaging is done using
biodegradable material making it a very green and sustainable brand.

Franchising: Huge franchisee network of 2,600+ franchised stores in 60+ countries

Sustainability: a champion of a lot of social causes and an environmental and human rights
activist. Right from using renewable and biodegradable packing material to sourcing from

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non-fossil fuel derived materials, The Body Shop has been true to its new CSR approach
Enrich not Exploit.

Distribution: Very good supplier network. Sources raw materials through Community trade
fairs

Weaknesses

Pricing: customers would be willing to pay a higher price for products with natural
ingredients. However, as competition picked up The Body Shop struggled with high prices
and lost a lot of business to competitors.

Number of retail outlets limited which impacts sales volumes

Slow service for the customers due to crowded shopping center location, in combination
with the fact of inadequate personnel

Unstable supply of ingredients and materials

=> The common characteristics of Cocoon and The Body shop are both made from natural
ingredients, safe for the skin. However, The Body shop is many years ahead of Cocoon
and has also grown with a huge franchise network of more than 2,600 stores in more than
60 countries. Although established later, Cocoon is still favored by customers because of
its stable price and high quality products. Cocoon's raw material supply is stable, cheap,
and fresh.

3, Giot Lanh

Strengths

Ingredients: 100% from plants, not from animals and derived entirely from natural

The product is suitable for all skin types, does not cause skin irritation

No preservatives and no flavors

Weaknesses

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Product range: Giot Lanh has a narrow product portfolio so it have difficulty in attracting
customers

Distribution network: No distribution channels, no affiliation with retailers.

Marketing strategy: Strategy is not effective, it does not attract customers.

Packaging: Product packaging is not eye-catching, it does not create love in customers.

=> In general, Giot Lanh is far behind Cocoon in the cosmetic market. The products and
information of Giot Lanh is not much. Cocoon has full information on the packaging as
well as on social platforms, so customers will be trust and support Cocoon much more.

III, Internal Environment Analysis

A, Value Chain

We will apply Porter’s value chain for our model.

1, Primary activities

Inbound logistics

The raw material (saffron from Hung Yen, waxy pumpkin and coffee from Dak Lak,,... for
example) is collected directly from the local farmers, active ingredients, vitamins, and

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platforms imported through official channels from countries such as France, Germany, and
Japan.

Rent land to build a warehouse and use cold storage for perishable items (in Ho Chi Minh
City, Vietnam).

Operations

Rent land to build a production plant.

Buy modern production lines and techniques.

Have a strict quality management system to control costs in all stages of production.

Outbound logistics

At present, Cocoon has contributed the products at more than 300 points of sale of popular
cosmetic store chains (Watsons, Guardian, SammiShop,…)

Cocoon has e-commerce channels such as Shopee, Tiki, Lazada.

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Marketing and Sales

Regularly have an environmental protection campaign, for example change an old bottle
to get a new product…

Discount price in holidays to attract customer buy with larger volume.

Using the influence of KOLs, Vloger, Beauty Vloger to spread the line of product closer
to the customers.

Collaborate with retailers to promote products.

In an online environment, sell products through company websites and partnered retailers’
platforms.

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In an offline environment, products are distributed and sold by retailers.

Service

Quick delivery system: customers could have the product on their hand from 1-3 days.

Return policy: if the product is guilty can be paid within 7 working days.

Service after purchasing: any problems or questions will be answered within 24h.

Resolve problems about service or product through fan page' message, phone numbers.

Collab with a gift-wrapping company to offer gift giving service to consumers.

2, Support activities

Firm infrastructure

Have a factory with modern production lines

Have CEO responsible for strategic planning.

Invest costs to modernize machinery and technology for production.

Human resource management

Focus on training the production team to ensure the product’s quality and especially the
marketing team to optimize the number of brand aware customers.

Employees have special treatment, buy products with large discounts, for example.

Technology development

Modern and clean techniques that prevent bacteria and ensure product hygiene

R&D department specializes in researching new product lines and improving product
quality.

Have evaluation teams responsible for improving the production process.

Procurement:

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Establishing good relationships with suppliers to lower the price of input material.

B, VRIO Framework

We evaluate the potential factors in this model based on the segment of the domestic
cosmetics market in Vietnam.

Resource/ Capacity V R I O

R&D X

Ability to raise capital X

Comprehensive Product portfolio X X

Skilled human resource X X

Distribution channels X X

Managerial skills X X

Relationship with local farmers X X

Marketing Skills X X X

Modern production lines and techniques X X X

Special formula X X X X

Brand image X X X X

Product quality X X X X

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Competitive advantage

Comprehensive Product portfolio helps the company to serve more types of customers,
leads to attracting more customers and increases sales revenue.

Marketing Skills: using environment protection campaigns, KOLs, mini games, gifts for
customers but it requires a large amount of capital to invest in marketing, but other
companies could also run this marketing campaign.

Relationship with local farmers: helps Cocoon have lower price, quality raw material than
competitors so that it can reduce the final price of the product, but Cocoon is quite depend
on the suppliers.

Modern production lines and techniques- unused competitive advantage: import and invent
more techniques in order to meet the strict standard for products, that costs a lot so
competitors find it quite hard to imitate.

Core competency

Special formula: have Vietnamese traditional recipe that is appropriate for Vietnamese’
skin - the target customers of the company in the near future.

Brand image: the prior vegan product of Vietnam, have good review from customers who
already have used the products, so it can helps to raise customers’ trust easily

Product quality: the quality of the products come from quality and wholesome input
materials and modern techniques, environment protection packaging.

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IV, SWOT Analysis

Strengths

Comprehensive Product portfolio: cocoon has a wide product portfolio and it covers
almost all genres of beauty, skin care, hair care and body care. The products which are
primarily catering to the skin problems of Vietnamese's skin types.

Ingredients: The company makes cosmetics with natural and organic ingredients which are
safe to be used on all types of skin. The brand uses only vegan recipes in them.

Strong Positioning: Cocoon is known as a pioneering brand for vegan cosmetics in

Vietnam, it uses either need versus benefit positioning for all their product lines. In order
to determine the correlation between the need and the benefits, detailed customer surveys
are undertaken in a long time.

Sustainability value: Cocoon is a highly sustainable brand making sure that everything that
they sell is completely organic. Their packaging also ensures that the environment is not
harmed. They source responsibly and sustainably and the company has the minimal waste
policy and no testing on animals.

Supply chain: Fresh and cheap supply from agricultural factories in Vietnam, Cocoon’s
products are made from pure Vietnamese raw materials that Cocoon has been searching
for and refining in such areas as: Thanh Hoa, Hoa Binh, Dak Lak, Tien Giang …

Distribution channels: Sales partners such as watson, skinhouse, guardian, sammishop,...

Modern production lines and techniques.

Weaknesses

Marketing strategy: Campaigns are not really effective.

Short shelf life: The product does not use chemicals as well as preservatives to bring safety
to customers so its shelf life is not as long as other skin care products.

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Low efficiency: Manual production process to create a complete cosmetic product overall,
this process is researched and tested for stability and safety for 12-24 months before being
released to the market.

Place: There is no official store, it depends heavily on retail channels.

Opportunities

The growing numbers of urbanized citizens: rise future demands of these citizens in coming
years.

Steady economic growth: Higher income level and lower inflation rate could be inferred
as contributing to the rise in consumer spending.

Change in customer behavior: Customers willing to pay for clean, safe organic skin care
products.

Social network: people spend much time using social media such as Facebook, TikTok,
Instagram, Youtube,..

Technology: find information and easy, convenient to buy on internet and smartphone

Threats

Trade Openness: domestic firms in this industry might face stiffer competition because of
potential entries of strong multinational corporations.

There are many competitors in the world: Le Labo, Tata Harper, Aesop,…

There are more individual retailer selling cosmetic product

Technology: customer can easily compare products in an online environment

Customer Loyalty: it is difficult to persuade customers to buy their products.

From SWOT analysis, the company see the strengths and weaknesses so that they can
improve and enhance the company’s performance. Besides, opportunities and threats will

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help the company navigate their future development path. Therefore, they can assess the
current situation and make the next strategies.

V, Generic current business strategy

Chosen strategy: Focused differentiation strategy

Reasons:

+ Value: Cocoon - pioneering the trend of vegan cosmetics in Vietnam. The product is
suitable for all skin types because it is extracted from natural and benign ingredients.
That is the reason that pregnant women and people with sensitive skin are very
concerned.

+ Unique product features: 100% vegan products take advantage of available natural
ingredients from Vietnam such as: squash, Dak Lak coffee, Ben Tre coconut oil, Cao Bang
rose... It is this that has created a Cocoon bold Vietnamese, not to be confused with any
other brand in the market)

+ Cost structure: Cocoon focuses on value-driven of cost structures to create the value in
the product itself, producing the product at the middle (even low) cost, bringing high value.

+ Price: Skincare products developed in Vietnam, especially natural products often have
high prices, but Cocoon can be guaranteed. They use friendly ingredients (squash, beard...)
at low cost to create quality products with stable prices.

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VI, Business strategy in coming 3 years

1, Target customer

People who care about product safety (pregnant woman, sensitive skin).

Gender: 80% female and 20% male.

Age: 16-44

Income level: Middle class to above

Living in urban areas of Ha Noi and Ho Chi Minh city

2, Generic business strategy

Chosen strategy: Focused differentiation strategy

3, Competitive advantage

From Competitor Analysis (section C part II), we will build our competitive advantage
based on unique values that are used to attract customers:

To create their impression and trust in us, we will build ourselves as a manufacturing brand.
The first prestigious domestic Cocoon cosmetic in Vietnam.

With the goal of bringing safety and beauty simultaneously to consumers, we will bring
our vegan products at an affordable price and make it easier for consumers to access.

In the organic cosmetics market, Cocoon faces big cosmetic brands such as: The Body
Shop, Innisfee,.. So we will need to make our Cocoon special than others by using the
secret formula of beauty in the ancient royal court to create beauty products suitable for
Vietnamese skin.

4, Overview strategy for the business in 3 years

To develop our mentioned competitive advantages, we will focus on implementing the

following steps:

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Well-established brand: We will invest strongly in development of product quality and

marketing.

First, in order to deserve to be a brand that comes up from quality, we focus on improving
product quality, we will produce Cocoon cosmetics with a commitment to say no to
parabens and "addictive" substances for the skin. skin such as: corticosteroids, alcohol,
mineral oil, hydrogen peroxide (H2O2 - hydrogen peroxide), luminescent substances,
100% natural ingredients, no preservatives, modern production lines, meeting hygiene
factors self-contained, self-contained and not cross-contaminated at the production stages,
meeting the strict conditions of the Vietnamese Ministry of Health on quality. Second, we
will use marketing and social media advertising strategies to promote the quality of our
products, committing to our brand "Cocoon-vegan solution for pure Vietnamese beauty"
to target consumers.

Affordable and accessible:

First, we will reduce the cost of our products by making the most of our machinery capacity
using mass production lines. Secondly, the cost of input materials is also an important
factor to help lower the cost of products by establishing our close relationship with a
number of domestic suppliers to receive preferential prices for our products materials.

In addition, in order for our products to reach more consumers, we will implement a
distribution strategy with 3 main distribution customers: offline retailers (Waston,
Sammishop, Vinmart, Stores). drugs,...) and online (Tiki, Lazada, Shopee, Sendo) and sell
online on our website.

Traditional Cocoon formula: In order to achieve 100% vegan, safe for users, we have
painstakingly searched for selected natural ingredients from Vietnam such as: squash, Dak
Lak coffee, Ben Tre coconut oil, Cao Bang rose...and apply esoteric recipes from royal
physicians to provide products suitable for Vietnamese skin characteristics.

In summary, in order to develop competitive advantages built in 3 years, we will focus on

specializing in marketing, production machinery, and distribution channels. Therefore, we
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offer the option of outsourcing for stages such as: Outsource auditors to check company’s
financial situation periodically and give advice for improving it, outsource a transportation
company and outsource foreign technicians to fix assembly problems if it might occur.

5, One-year marketing plan (from January 2022 to January 2023)

We have to highly concentrate on some particular parts: Marketing. This part details
activities to be used to differentiate us from competitors in the industry.

a, Objectives

- Business Objective:

Reach a sales revenue of 20 billion VND.

Achieve more than 50% of current number of customers who could know about the brand
name.

- Marketing Objectives:

Grow Market Share: Acquire 20% of market share in cosmetic industry.

Grow Digital Presence: Reach 4 million traffic to our website, social media sites, our
products in partners' online sites.

- Communication Goal:

To create awareness and stimulate desire to use vegan cosmetic among targeted market
segments.

To create the perception "Cocoon vegan solution for pure Vietnamese beauty" in the
consumer mind.

b, Action plan:

[1/2022-3/2022] Strategy "Pretty skin celebrate Tet with Cocoon"

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This event is to introduce Cocoon's new Tet-themed look to the public. It focuses on raising
awareness and stimulating the desire to use Cocoon's new look products among our target
consumers. - During this time, Viet Nam has a lot of special holidays ( Tet holiday,
traditional holidays,...), we could send samples of product as a gift for customer and
organize a challenge to use Cocoon for 1 month, the challenge participants will use the
product and monitor the improvement of the skin.

Phase 1:

We will collaborate with hot Youtubers who are interested in vegan cosmetics (Trinh
Pham-target for pregnant segment, Quach anh-target for sensitive skin segment) to share
secrets. decision, skin care experience and noted their skin improvement after 1 month of
using Cocoon.

During the challenge, they will post on social networking sites (Facebook, Instagram,
Youtube) their current status and feelings about using cosmetics.

At the end of the challenge, we will do a short series of youtube videos and articles in
online beauty magazines (Harper's Bazaar, Elle, Her World) about their experiences with
vegan cosmetics.

Phase 2:

Release cosmetics to the public, provide on online channels (Lazada, Tiki, Shopee)

Become the sponsor of some award event to introduce the company to more new
customers, besides donate money for that event, we could also send products as a gift for
the mini games/ reward for this event.

Making a public version of the challenge, the general audience can record their experience
using Cocoon cosmetics for a month and post on social media their conditions sites with
hashtags with #CocoonVeganCosmeticChallenge to be eligible for prizes from us.

[4/2022-6/2022] Focus on social media development

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During this period, we will focus on building our presence on social media (Facebook,
Instagram, Youtube). We will regularly post content related to women's skin problems,
how to choose cosmetics suitable for pregnant women, how to care for sensitive skin, etc.
Along with suitable product lines for women skin issues to increase the impact of these
pages and awareness of our brands and products on our future campaigns.

Running sale campaign on website, e-commerce:

+ Freeship if customers order on the company' websites

+ Discount 30-40% on e-commerce platform

+ Voucher discount if they buy a bill that meets the minimum order value

[7/2022-9/2022] Running the project "face flower with chalk skin"

During this period, we will focus on building the awareness of "Cocoon-vegan solution for
pure Vietnamese beauty" in consumer mind.

We will make 4 youtube videos about skin problems of pregnant women, people with
sensitive skin and their transformation after using Cocoon. After each video is released, we
will use our social media sites to spread the word and convince pregnant women to speak
up and show how they deal with skin problems during pregnancy and the like. for people
with weak skin. Then the 20 people with the most inspirational stories will receive our
voucher "10% off every bill for 6 months".

Collaborating with some well-known spas in HN and HCM to display our products on their
spa to expand the distribution channel:

+ Gift voucher for customers who using service of these spas

+ Giving samples as a treatment for those who treat their skin in the spa

+ Check the efficiency to decide if we should continue distributing our products to these
places or not. If it works well (get 80% targeted customers), we could continue using this
way to other spas.

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[10/2022-1/2023] Run a gift campaign "Give Cocoon to those you care about"

Run advertising for combo/set of products which are carefully wrapped as gift for ones you
care.

Run a new marketing campaign "Love Green Trade": 30% discount for customers who
purchase a bill costs 1,000,000 VND or purchasing combo products.

We will take advantage of our social networking sites to spread this information, especially
during Mother's Day (March 8, Women's Day (October 20), Teachers' Day (November 20),
Christmas (December 24),…

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VII, References

https://www.marketing91.com/marketing-strategy-of-the-body-shop/

https://www.academia.edu/12882454/Direct_Marketing_strategy_The_Body_Shop?auto
=download

https://www.academia.edu/27589067/Innisfree_Marketing_Plan

https://thuonghieumypham.net/my-pham-cocoon/amp/

http://cocoonvietnam.com/hien-tuong-my-pham-thuan-chay-cocoon-tai-viet-nam

https://www.brandsvietnam.com/21162-Cocoon-my-pham-Viet-dau-tien-gop-mat-trong-
danh-sach-khong-thu-nghiem-tren-dong-vat-cua-Leaping-Bunny

https://www.slideshare.net/snehalundia/sample-maketing-plan

https://myphamthuanchay.com/n2202/cong-ty-co-so-san-xuat-cua-cocoon.html

https://www.brandsvietnam.com/20676-Hien-tuong-my-pham-thuan-chay-Cocoon-tai-
Viet-Nam

https://cocoonvietnam.com/ve-chung-toi

https://www.marketing91.com/swot-analysis-of-lush/

https://cocoonvietnam.com/cham-soc-da

https://kenh14.vn/cocoon-my-pham-thuan-chay-made-in-vietnam-va-su-lot-xac-ngoan-
muc-cua-mot-thuong-hieu-viet-20200107192715504.chn

https://www.worldometers.info/world-population/vietnam-population/

https://www.statista.com/statistics/603397/vietnam-urban-population/

https://naturalcosmeticslovers.wordpress.com/brand-inventory/the-body-shop/the-body-
shop-strengths-and-weaknesses/

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