Mary Kay Inc

Mary Kay Inc.: Direct Selling and the Challenge of Online Channels

In 1999, Mary Kay Inc., a direct seller of cosmetics and beauty products, faced a number of business challenges. They included a changing demographic of their target market and a business landscape that was just learning how to leverage the Internet. Mary Kay needed to figure out their next move to remain competitive.

Strengths

Mary Kay had a large and engaged sales force, a name brand known for quality and a target market they knew well. The company also had a strong vision and mission that guided their decision-making. They also have a diverse portfolio of products that appeals to a wide range of users.

Weaknesses

Mary Kay recognized they had a weak IT infrastructure unable to produce timely sales, inventory and financial data to corporate employees and the sales force. Mary Kay does not have a handle on the entire supply chain. They faced stock outs and were unable to develop usable sales forecasts. Reports were not timely and data was not disseminated across the organization. In addition the sales force was thought to be low technically literate.

Opportunities

The advent of Internet sales offers Mary Kay additional distribution channels. Sales force members have the opportunity to sell to and reach a wider market through the Internet versus in home consultations. Mary Kay can also expand international sales where they already had a foothold. A stronger more usable IT infrastructure will allow for better data mining and sales forecasting. Continuing to change the product mix and targeting to specific markets (i.e., people of color, aging users, natural, herbal or organic products) could grow the business significantly. Mary Kay could grow their products in related areas such as hair care or health and herbal supplements.

Threats

Mary Kay faces intense competition from not only other direct sales companies such as Avon, but also from a growing crop of online beauty products...