Mary Kay Case Analysis

1291 words 6 pages
In 1999, Mary Kay’s senior executives were contemplating a new strategy. This new strategy was necessary to face stagnant sales, changing consumer trends and increased competition.

I. Background
A. Industry and Distribution Channel
Mary Kay was a direct seller of cosmetics and toiletries. This direct sales force consisted mainly of women who sell full-time or part-time through home demonstrations. The company’s product line included items such as skin creams, cosmetics, fragrances and other personal care products. From 1963 through the 1990s, this direct sales force primarily made up the distribution channel. In the case of Mary Kay, the direct sales force was the distributors and consumers. Thus, the direct sales force
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II. Decision Problem
As the senior executives discuss the future of Mary Kay, a central theme weaves throughout the company’s background and current management staff. The “Guiding Principles” of the founder still influences the decision makers. When Bill Brown, the vice president of e-business and technology engineering contemplates “that Mary Kay would never build a new channel to compete with its loyal independent sales force”, a secondary problem exists for the senior executives. Other management reinforce this secondary problem when conversation states “Mary Kay just doesn’t need all this technology”. Dr. Barker who is in charge of the research and development makes this statement. Realistically, these founding principles are interfering with the company’s growth. This secondary issue will need reviewed under the alternatives to the primary problem. The primary problem in this case though would be, How to maintain growth in the future for a fair return to the shareholder?

III. Alternative Courses of Action
As the senior executives from Mary Kay reflect upon the problem, the staff must consider the existing internal problems of the company. These problems include:
1) An inadequate order system to handle the number of orders placed at the end of the month.
2) The shortage of


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