Case | HBS Case Collection | February 2001 (Revised February 2002)

Estee Lauder and the Market for Prestige Cosmetics

by Nancy F. Koehn

Abstract

Opens with a brief history of the U.S. cosmetics market and its rapid development in the 1920s. Also recounts Lauder's initial involvement in the sector, making skin care products and selling them in Manhattan beauty parlors during the Great Depression. Pays particular attention to the period after World War II, when widespread socioeconomic shifts were altering women's possibilities--perceptual and material. For Lauder, such shifts presented important business opportunities. Invites students to analyze how the entrepreneur exploited these opportunities by building quality products, a powerful brand, and a best-of-brand organization. Closes with a discussion of the other brands that Lauder and her colleagues created, those that it acquired in the 1990s, and the importance of specific organizational capabilities in sustaining market leadership in the global, intensely competitive market for prestige beauty products.

Keywords: Fluctuation; Organizational Change and Adaptation; Market Entry and Exit; Entrepreneurship; Luxury; Business Strategy; Society; Beauty and Cosmetics Industry; United States;

Citation:

Koehn, Nancy F. "Estee Lauder and the Market for Prestige Cosmetics." Harvard Business School Case 801-362, February 2001. (Revised February 2002.)