Estée Lauder: The Family-owned Cosmetic Manufacturer's Growth Strategies


Code :FMB0004

Year :

Industry :Home Appliances and Personal Care Products

Region : USA

Teaching Note:Available

Structured Assignment :Available

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The Initial Years of the Iconic Cosmetic Manufacturer
Josephine Esther Mentzer (called as Esty) was born on July 1st 1908 to an eastern European Jewish immigrant family in Corona, Queens in NewYork City.Her father owned a hardware shop that was at the ground floor of their house. During that time, Corona was known for its garbage as the neighbouring regions dumpedmanure-filled barges onCorona’s deck. Even the Brooklyn Ash Co. dumped its burnt wastes in Corona, thereby destroying its beautiful landscape. F. Scott Fitzgerald in his famous novel, TheGreatGatsby, even called Corona as the ‘Valley ofAshes’. “In that environment, who wouldn’t dreamof looking and smelling beautiful?”...

Family Values: The Company’s Growth under Two Generations of Lauders
After joining the company, Leonard began helping hismother in sales and distribution activities.He regularly visited the upscale departmental stores, surveyed for newoutlets and interactedwith customers to get their opinions and suggestions aboutEstée Lauder’s products, promotions and other sales techniques. The customer feedbackwas then discussedwith the familymembers...

The Future of the Family Business Saga
With the third generation running the business, Estée Lauder has been one of the very few companies having large, public and generation-spanning business.Aresearch carried out by John L.Ward, a professor atNorthWesternUniversity’s Kellogg School of Business, found out that out of Fortune 1000 companies, only 79 companies are true family-owned companies that are controlled by the descended familymembers of the company founder.He also cited that out of them, only 20%of the family businesses survives beyond 60 years of their inception...

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