As part of my studies, I had to analyse both the external and internal environment of the organization « Ingot Cosmetics » in order to make an environmental audit and critically analyse the factors that affect the organisations’ current strategy with a view to justify the need for further development through international market development strategy. This presentations includes the use of theoretical frameworks such as the SWOT analysis, the PESTEL analysis, the Value Chain and the 5 Porter Forces.

1. INGLOT
Environmental Audit

2. TABLE OF CONTENT
 Inglot Environment
 Internal Analysis
 About the company Value Chain
 External Analysis
 Poland overview and Analysis Cosmetic Analysis
 Inglot Strategy Analysis
 SWOT Inglot Strategy
 Russia’s Analysis
 Russia overview and Analysis Cosmetic Analysis
 SWOT Analysis TOWS Analysis Inglot Strategy

3. ABOUT INGLOT
80s
Inglot Creation
1989
Development
2006
International

4. ABOUT INGLOT

5. ABOUT INGLOT
Business Philosophy:
Offering highest quality at
affordable price

6. ABOUT INGLOT
Business Philosophy:
Offering highest quality at
affordable price
Objectives next years:
Diversification
Upgrade R&D
400-500 new stores
Targeting new market
Deepening existing market

7. MICROENVIRONMENT –VALUE CHAIN

8. POLAND OVERVIEW
Total Population: 38,518,241 people
GDP: €548 Bln
Main cities: Warsaw (Capital), Krakow, Lodz
Official Language: Polish
Business Language(s): English
Type of State: Republic of Poland leaded by Andrzej Duda
Type of Economy:
European northern country global good situation
National Currency: PLN Polish Zloty
Exchange Rate on November 15, 2015:
1 USD = 3,9565 PLN and 1 EUR = 4,2410 PLN

9. MACROENVIRONMENT POLAND COUNTRY
ANALYSIS
Criteria Opportunities Threats
Political
- EU member since 2004 -> Non barriers
- Encourage foreign investment
- Destabilized since the Airplane crash of Lech Kaczynski
- Geo-politic tension with Ukraine and Russia
- End 2015: political difficulties due to the Polish elections
Economical
- 3,8% growth in the first quarter 2015
- GNI/capita: $13 730
- Fiscal policy adapted and helped by the EU
- Government seek a balance between public finance and economic growth
- Tertiary sector represent around 65% of the GDP
- Large and growing domestic market
- Access to capital are difficult
- Delays regarding the EU entrance
- Public deficit is a worried thing
- External debt increase
Social/Cultural
- Business cultural: Useful to have a face to face before business
- Have an in-country agent. Local presence
- English speaker is rising
- Welcomed population and open minded
- Business climate pleasant and strong work spirit
- Disparities East-West, Social class destabilization
- Corruption
- Accommodation in cities
- Geographic inequality
- Grow of the unemployment, urban have greater purchasing power than the rural
consumers
- Prices of product are criticized
Technological
- Relaunch plan for investment New technologies and R&D - Low investment of the R&D sector but New technology investment
Environmental
- Kyoto protocol
- The united nations framework convention on climate change
- Obligation of transparency regarding the dangerous product like chemical substances
- Prohibition or restriction on the use of water
- Dependance to Russia which provide 73% of the gaz
Legal - Tax exemption and low income tax
- Member ACELE, OMC, ONU, OCDE, OSCE, OTAN, EU.
- Poland adopt all the EU law regarding copyright and intellectual properties
- EU new customs import system and HS code.
- Lack of transparency in the administrative system
- Administrative procedures are long and complex

10. POLAND OFFER ANALYSIS : 5 PORTER
FORCES
Concurrenceintensity
•Bigest
competitors:
Make-upArt
Cosmetics (MAC),
Make Up For Ever
•Strong
competitivness
Bell, Bielenda,
DAX cosmetics,
Inglot, Dr Irena
Eris, Oceanic,
Ziaja Rossmann,
Sephora,Yves
Rocher, Gabriel ou
Ina Center. Nano-
Koloid, Lanwar
cosmetics.
Agencja kontact,
Cosmetica rosa,
Clarena, scan
anida spolka,
cosmetics4U
Newentrants
• Few barriers: EU
• Easy
accessibility to
the market
• Strong
competition
with local and
international
brand
SubstituteProduct
• The Organic
market
• Make-up stamp
“Ready to
applicate”
Suppliersnegotiationpower
• Numerous
suppliers in the
market locally
and
internationally
• Strong
concurrence of
providers
• Low negotiation
power of
supplier due to
the saturated
market
Customersnegotiationpower
• Customer
strong
negotiation
power due to
the market
saturation
• Polish
consumers have
a large choice
for their
cosmetics: they
can be exigent

11. MACROENVIRONEMENT POLAND
COSMETIC SECTOR ANALYSIS
Criteria Opportunities Threats
Offer
Demand Qualitative - Polish women represent the majority of buyers of cosmetics
- Polish preferences: mascara, eye shadow, lipstick , pastel colors are the most used
- Polish women attached great importance to the product price
- Teen became a new category of customers
- No loyalty feeling, the choice of the brand is only due to the
prices
- Against premium product
- Popularity of dermocosmetics wills
Quantitative - The Poles are accustomed to do their shopping 7 days on 7 and at any time.
- Monthly spending on cosmetics at up to PLN 100 (ca. EUR 25)
- Health and beauty, cosmetics (5th European market in terms of the number of
consumers)
- Polish cosmetics market is experiencing an uptrend, as its value increased in 2013 by 2% y/y
reaching PLN 20 bln, and should grow by another 15% to PLN 23 bln by the end of 2016
- The cosmetics consumption frequency is regulated by specific
events such as outings, family parties, meeting love or new friends
Distribution In General - Local distributors, Drogeria Natura has over four hundred franchised stores and distributes
cosmetics General public.
- Direct customers: wholesalers, beauty salons, hair salons, SPA centers
- Direct sales via home sellers (chosen by 15% of Polish consumers)
- Pharmacies, stores online
- Discount supermarkets and chain drugstores are among the fastest growing distribution
channels for cosmetics
- Inglot non use of these distribution ways
For Inglot - Its own stores , Franchise, Website - No presence the usual distribution ways

12. INGLOT SWOT
S W
O T
- Large range of products
- Low prices of their products
- Good brand image and awareness
- Global presence
- Word-of-mouth marketing
- Innovative and flexibility
- Internal financing
- About 40% of Inglot’s revenues come from export
- International franchising : speedy entry to foreign
market + moderate cost-strategy to expand sales in
order to achieve economies of scale
- Risk of franchising : High potential for opportunism +
Could damage the firm’s reputation and image + Does
not provide experiential knowledge in foreign markets
- Medium risk and control of the development of the
company
- No influence on human ressources
- Only one R&D centre in Poland
- Every decision comes from Poland, few decision
adapted locally
- Growth of the unemployment
- Corruption
- Lack of transparency in the administrative system
- Poland saturated market
- Competitors are multinational
- Many different distribution means non used by
Inglot
- Tendency purchasing difficult to forecast
- No loyalty feeling, only price is important in the
choice
- Domestic producers are supported by the Polish
Government thanks to the program “Promotion of
Polish Economy at Foreign Markets”
- EU member since 2004
- Tax exemption
- Inglot one of the market leader
- Cosmetic sector increasing
- New customer target as teenagers

13. CONCLUSION POLAND
- Strategic position in Europe
- Face Polish trends challenges
- Quality at low price
- Polish government help for foreign countries
- Invest in a saturated market
- Franchises
- Emerging countries opportunities

14. RUSSIA OVERVIEW
Largest country in the world
Total Population: 143,819,569 people
GDP: $1 236 Bln
Main cities: Moscow (capital); St Petersburg; Novosibirsk
Official Language: Russian
Business Language(s): English (be prepared to conduct negotiation
in Russian)
Type of State: Federal republic based on parliamentary democracy.
Presidential government directed byVladimir Putin.
Type of Economy:
Emerging Financial Market, G8 member.
World leading producer and exporter of natural gas, 2nd for petroleum
National Currency: Russian Rouble (RUB)
Exchange Rate on November 15, 2015:
1 USD = 66.8600 RUB and 1 EUR = 71.9760 RUB

15. MACROENVIRONMENT RUSSIA COUNTRY
ANALYSIS
Criteria Opportunities Threats
Political - Official relationship with 191 countries and 144 embassies
- Perfect location between Europe andAsia
- Risk of conflicts connected with political situation
- Severe control of business
- Freedom of speech issues
Economical - GNI/capita: $13,210
-The level of investments is 19,7% of GDP;
- Dependance to natural resource and price of crude oil
- 12,7% of population below poverty line
- High level of inflation
Social/Cultural - Even though the country went through a severe economic crisis during 2009,
the government was able to carryout large-scale anti-crisis measures without
any cuts in social spending
- HID: 0,778
-Affected by HIV and alcohol poisoning
- Low productivity
Technological - Rich in science tradition
- Modernization and advanced technology
- Big improvement in living standard
- 43% of Russians use Internet every day, 53% – every week and 55% a month;
-Very low level of competing technology development
Environmental - Almost no significant climate changes - High level of pollution
- Corporate Social Responsibility awareness is very little
- No signatory of the Kyoto Protocol
Legal - No legal difference between foreign and national investor
- No prohibition and restriction in cosmetic sector
- Corruption rate of 2.1
- High governmental barriers to open a new company
- Recent accession toWTO affected a lot of trade tariffs

16. RUSSIA OFFER ANALYSIS : 5 PORTER
FORCES
Concurrenceintensity
• Strong
competition
•TOP 10
manufacturers:
L’Oreal, Avon,
Kalina, Nevskaya
Kosmetika,
Arnest, Faberlic,
Mezoplast,
Svoboda,
Unikosmetik,
Vesna
•25% Imported
and 75% Local
Newentrants
• Market easy
to access
• Percentage of
importing
countries:
SubstituteProduct
• The Organic
Market
• Cosmetics for
Home-Care
Suppliersnegotiationpower
• Numerous
providers in
Russia
• Low suppliers
negotiation
power due to
concurrence
Customersnegotiationpower
• High number
of consumers
• Many choices
regarding the
cosmetics
companies
• Preferences
for local
product
• Strong
negotiation
power

17. RUSSIA OFFER ANALYSIS : 5 PORTER
FORCES
Concurrenceintensity
• Strong
competition
•TOP 10
manufacturers:
L’Oreal, Avon,
Kalina, Nevskaya
Kosmetika,
Arnest, Faberlic,
Mezoplast,
Svoboda,
Unikosmetik,
Vesna
•25% Imported
and 75% Local
Newentrants
• Market easy
to access
• Percentage of
importing
countries:
SubstituteProduct
• The Organic
Market
• Cosmetics for
Home-Care
Suppliersnegotiationpower
• Numerous
providers in
Russia
• Low suppliers
negotiation
power due to
concurrence
Customersnegotiationpower
• High number
of consumers
• Many choices
regarding the
cosmetics
companies
• Preferences
for local
product
• Strong
negotiation
power

18. RUSSIA COSMETIC SECTOR ANALYSIS
Criteria Opportunities Threats
Offer
Demand Qualitative -Women are the prescriber and often the buyer.
- Importance of « clinically tested »
- Trust in international brands = quality
- High demand in luxury and upscale products
- « Russian doll » style = pure skin complexion, pink blush, mascara…
- New behaviour : more and more loyalty of local products
-They like French products = high quality and elegance
-They like the Organic cosmetics with plants and oils
Quantitative - 143,5 Bn active consumers
- 65% of Russians live in 20% of the territorry
- 80% of women use make up every day
- 10 to 15% of their monthly revenue are used for cosmetics
- 40% uses special creams for eye area (-10% since 1990)
Distribution Generally - High increase of sales in beauty shops
- Selective distribution shops : « l’Etoile » « l’Ile de Beauté » and « Rive
Gauche » (mid-range positioning)
- Principal beauty shops «Magnit » « Kosmetik » « Podruzhka » « Ol !
Good » «Yuzhny »
- Repartition of retail outlets : Moscou 1 200, Saint-Pétersbourg 647 and
Krasnoïarsk 443
- Cosmetics in supermarkets and mini-market
- Domestic direct sales through representatives: retirees, housewives…
- Decrease of direct sales, open-air markets and other supermarket and
internet
- 40% uses beauty salons services (-4% since 2004)

19. RUSSIA COSMETIC SECTOR ANALYSIS
Criteria Opportunities Threats
Offer
Demand Qualitative -Women are the prescriber and often the buyer.
- Importance of « clinically tested »
- Trust in international brands = quality
- High demand in luxury and upscale products
- « Russian doll » style = pure skin complexion, pink blush, mascara…
- New behaviour : more and more loyalty of local products
-They like French products = high quality and elegance
-They like the Organic cosmetics with plants and oils
Quantitative - 143,5 Bn active consumers
- 65% of Russians live in 20% of the territorry
- 80% of women use make up every day
- 10 to 15% of their monthly revenue are used for cosmetics
- 40% uses special creams for eye area (-10% since 1990)
Distribution Generally - High increase of sales in beauty shops
- Selective distribution shops : « l’Etoile » « l’Ile de Beauté » and « Rive
Gauche » (mid-range positioning)
- Principal beauty shops «Magnit » « Kosmetik » « Podruzhka » « Ol !
Good » «Yuzhny »
- Repartition of retail outlets : Moscou 1 200, Saint-Pétersbourg 647 and
Krasnoïarsk 443
- Cosmetics in supermarkets and mini-market
- Domestic direct sales through representatives: retirees, housewives…
- Decrease of direct sales, open-air markets and other supermarket and
internet
- 40% uses beauty salons services (-4% since 2004)

20. External Opportunities (O)
1. International franchising : speedy entry to foreign
market and moderate cost-strategy
2. Russia : 4th largest beauty market in Europe
3.Trust in international brand
4. 10 to 15% of woman revenue used for cosmetics
in Russia
5. Modernization and advance technology
ExternalThreats (T)
1. Risk of franchising (could damage the reputation
and image)
2. Problem of counterfeiting
3. Saturated market
4. Increase of the local competitors
5. Risk of conflicts due to the political situation
6. Organic cosmetics with plants and oils demand
Internal Strengths (S)
1. Finance its growth from internal cash flow
2. Fast reaction to fashion trend (reactivity and
flexibility)
3. Attend many events
4.Training of the staff (know-how)
5. Low prices of their product
6. About 40% of Inglot’s revenues come from
export
SO Strategies
- Trade shows
- Encourage franchising investment
- Create local parterships
ST Strategies
- Inglot Know-how
- Copy-right
InternalWeaknesses (W)
1. No infrastructure abroad (for R&D and
production)
2. Low control of the development of the
company and of the franchisee
3. No advertisment in mass media
4. No influence in human resources management
5. No natural products
WO Strategies
- Communication and advertising
- Training staff
WT Strategies
- Franchises issues
- Organic range
TOWS

21. GLOBAL CONCLUSION ON RUSSIA
INTERNATIONALISATION
Datas to judge Inglot corporate investment challenges policy
Internal and external strategies Financial independence
Resources

22. THANKYOU FOR LISTENING

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