Ulta Beauty. Business and Marketing. Term Paper Assignment.

Ulta Beauty Inc.: Strategic Analysis
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Abstract
The strategic analysis of Ulta Beauty Inc. is conducted in this paper. The company’s vision, mission, and values are analyzed. This paper also describes the targeted customers, the products and services offered, and the competitors. A SWOT analysis is also conducted as part of the internal and external factor evaluation. The industry analysis is done using Porter’s five forces model. In conclusion, the company’s viability and potential is assessed and the results are provided.
Ulta Beauty Inc.: Strategic Analysis
Introduction
Ulta Beauty Inc. is an American company headquartered in Bolingbrook, Illinois. It was established in 1990 and its main focus is retailing of beauty products and services (Ulta Beauty, n.d.). Over the years, it has grown to provide over 25,000 beauty products, which are from over 500 beauty brands. Ulta Beauty has over 800 locations in the United States, which has allowed it to provide clients with products from brands such as Tarte, Benefit, and Smashbox, among others. The company offers personalized brands and has been able to acquire more than 33 million customers through its loyalty program, known as the Ultamate Rewards. The company has about 45,000 employees, who it commonly refers to as associates, and has been able to create more than 20,000 new jobs since 2015 in the United States. Also, the company has partnered with the Breast Cancer Research Foundation (BCRF) and has raised funds from its guests and associates to support breast cancer research. It has also partnered with Dress for Success, a non-profit, international organization that focuses on empowering women by providing them with the necessary resources to boost their careers. 
Overview of the Company
Vision, Mission, and Values
           Ulta Beauty’s vision, mission, and values are highlighted on the company’s website. The vision is “to be the most loved beauty destination of our guests and the most admired retailer by our Ulta Beauty associates, communities, partners and investors (Ulta Beauty, n.d.)” Ulta beauty refers to its customers as guests and its employees as associates. This vision shows that the company not only wants to be the first beauty stop for clients but also to be a place that is “home” to employees and the community as a whole. The company’s mission is to “use the power of beauty to bring life the possibilities that lie within each of us-inspiring every guest and enabling each associate to build a fulfilling career” every single day. The mission, similarly, indicates that Ulta Beauty wants to create empowering experiences for both its clients and employees. To accomplish the vision and mission, Ulta Beauty has adopted some very powerful values that guide its work. These values include diversity- championing for diversity in and around the workplace, improvement- improving everything they do every day, experiences- giving positive experiences to their clients. Also, Ulta Beauty is centered on the values of winning together, loving and owning “what you do”, and doing what is right (Ulta Beauty, n.d.). These values are customer and employee-oriented.
Targeted Customers
           To understand Ulta Beauty’s target customers, it is important to understand what motivates the company’s customers (Tybout & Calkins 2019, p.258). Ulta Beauty’s value proposition is on providing “all things beauty, all in one place.” Thus, the targeted customers are both men and women who want to access beauty products and services in one stop. Ulta Beauty targets male customers who need skincare, shaving, body care, and hair products (2Ulta Beauty, n.d.). Also, it targets male customers who need cologne and beard grooming products. The company also targets female customers in need of makeup, skincare, nails, and hair products. Further, they target women in need of beauty accessories such as makeup brushes, hair extension, and hair dryers, among others. 
Offered Services and Products
           Ulta Beauty offers a range of products and services to its clients. The products range from nails, makeup, skincare, shaving, body care, and hair products. They also offer fragrance and self-care products such as blister prevention sprays and vitamin C. In the beauty services category, Ulta Beauty offers hair styling services. These include color styling, haircutting, and changing or maintaining clients’ hair texture in Ulta Beauty’s salon (3Ulta Beauty). Ulta Beauty provides its clients with a loyalty program, referred to as the Ultamate Rewards, which allows customers to gain points every time they shop at Ulta Beauty.
Competitors
Ulta Beauty faces competition from some of the largest retailers in the United States. Walmart is one of Ulta Beauty’s strongest competitors because it is also a retailer that sells beauty products. Others include Sephora, which is a French multinational beauty products retailer, Amazon, and Target (Tybout & Calkins 2019, p.260). 
Performance and Current Issues
           Ulta Beauty has enjoyed considerable success over the years in terms of its financial performance. Its 2019 financial performance increased considerably in comparison to its 2018 performance. The net sales went up by 7.9% and their total sales increased by 3.2% (Ulta Beauty, 2019). This success has been attributed to a strong brand that has been built over the years (Tybout & Calkins 2019, p.260). However, currently, Ulta Beauty has closed down its stores due to the Coronavirus pandemic. This will affect the company’s revenue (Ulta Beauty, 2020) because access to products and services is limited, for now.
Internal Factor Evaluation
Strengths
The strengths of a company are assessed by checking the internal capabilities and resources that give a firm a competitive advantage over its rivals (Hitt, Ireland, & Hoskisson 2017, p.473). The following are the major Ulta Beauty’s strengths. 
* Diverse Products Portfolio- Ulta Beauty has a very diverse product portfolio that enables it to serve the needs of its equally diverse customer base. The company offers a range of products for nail care, skincare, body care, and hair care (Ulta Beauty, n.d.). Besides, its broad product portfolio has allowed it to serve both male and female clientele, more so because customers have access to over 25,000 beauty products from over 500 beauty brands. 
* Strong Domestic Presence-Ulta Beauty has been able to establish a very strong presence in the United States. The company is one of the largest retailers of beauty products in the country. It has over 800 stores located in the United States (Ulta Beauty, n.d.). As a result, the firm has been able to offer employment opportunities to residents. Besides, its strong presence in the country can be confirmed by the creation of over 22,000 new jobs since 2015 (Ulta Beauty, n.d.). This has allowed it to acquire a substantial share of the market. 
* Strong Brand- Ulta Beauty has a very strong brand that has been built over the years. A strong brand gives a company a competitive edge over its rivals (Calder & Frigo 2019, p.25). It also enhances customer recognition and loyalty. Due to its brand and loyalty program, Ulta Beauty has been able to attract more than 33million loyal customers (Ulta Beauty, n.d.) who relish shopping at various locations around the country.
* A motivated workforce- Ulta Beauty has a very motivated workforce that serves customers with passion and dedication. Over the years, Ulta Beauty has developed policies and benefits that keep its employees motived (Ulta Beauty, n.d.). They include a tuition reimbursement program that allows employees to attain higher levels of education with the assurance that upon completion, they will receive back their tuition money. Also, the company has developed some policies that facilitate flexible working hours. This allows employees to balance their work and family life, thus giving them the motivation to keep providing the best services to customers. The company also established an illness bank that supports the employees in case of a long illness. Due to such policies, employees can offer better services to clients and give them a positive customer experience. 
Weaknesses
A firm’s weaknesses are assessed by checking the internal characteristics that can give it a competitive disadvantage (Hitt, Ireland, & Hoskisson 2017, p.473). The following are the weaknesses of Ulta Beauty.
* Low Workplace Diversity-At Ulta Beauty, 92% of all employees are female (Ulta Beauty, n.d.). This means that many qualified male applicants have limited chances of working at Ulta Beauty, yet they could bring something new to the company. Also, this can ...