Skincare, Inc. Case
SKINCARE, INC. CASE ANALYSIS
I. Market Situation
Macroenvironment
The economy grew in 2001 as shown by Real Gross Domestic Product (GDP) increase of 3.4% and real Gross National Product (GNP) increase of 3.7%. This means that the total market value of the country increased as well as the welfare of its economy. An increase in GDP may indicate an increase in the standard of living, increase in labor productivity, and thus increase in worker salaries.
The government forecasted that the real GDP growth in 2002 was 4% to 4.5% because of continued macroeconomic stability. GNP is also expected to decline due to a target to reduce fiscal deficit from P147 B in 2001 to P130 B in 2002.
Many continued to be price conscious and value-oriented brought about by the slow recovery of the economy since the 1997 Asian Economic Crisis.
Microenvironment
Skincare, Inc. belongs to the dermatological business. The dermatological market accounted for approximately 1.3% of total business registered under “Private and Health Services” in the past 5 years. It was a P1 Billion annual business in the Philippines. The National Capital Region accounted for 75% of dermatological clinics in the country.
Despite the increase of new entrants, only a few players dominated the market. Among the key players in the market are: Facial Care Center, Skincare, Dermatrium, Bioessence and BeloMed.
In terms of annual sales, Skincare was the second largest player in the industry, contributing P258 Million. This is 23% of the market share. The market leader is Facial Care with a market share of 49%. Skincare was also the 2nd highest spender in advertising and promotion with 23% of the total industry or P12 Million. The biggest spender is Facial Care with 48%.
Internal environment
Skincare was a subsidiary of ABC Group of Companies, a...
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