Article | Harvard Business Review | July–August 2012

The Growth Opportunity That Lies Next Door

Abstract

This article uses the case of Natura, the largest Brazilian beauty company and one of the world's top twenty beauty companies, to explore how the logic of globalization is changing for corporations from emerging countries as growth opportunities in those countries outpace those in developed markets. For 30 years Natura attempted to move, with mixed results, into developed markets even as the opportunities of its region have grown stronger and stronger. Ultimately Natura has moved beyond stereotypes of globalization, recognizing that winning in Argentina, Chile, and Mexico can be an entry onto the world stage every bit as effective as conquering Paris or New York.

Keywords: Brazil; marketing; globalization; green marketing; environment; Globalization; Developing Countries and Economies; Geographic Location; Growth and Development Strategy; Beauty and Cosmetics Industry; Latin America; Europe;

Format: Print

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Citation:

Jones, G. "The Growth Opportunity That Lies Next Door." Harvard Business Review 90, nos. 7-8 (July–August 2012): 141–145.

Considers the creation of the world's largest fragrance company by Bernd Beetz, appointed chief executive of Coty Inc. in 2001. In 1990 the German consumer goods company Benkiser began acquiring fragrance and cosmetics brands with the intent of developing a beauty business. These included the long-established, but relatively small, U.S. fragrance company Coty. In 1996 the beauty business was spun off under the name Coty. When Beetz was hired as chief executive, it was still a fragmented collection of recently acquired brands. The case describes how Beetz re-ignited the dormant celebrity fragrance business with the successful launch of a new Jennifer Lopez fragrance line. Fashioning a new entrepreneurial culture based on the principles of "faster, further, freer," Coty hired longstanding executives from other firms and liberated their entrepreneurial capabilities, refreshing brands which had been tarnished into a global mass color cosmetics brand. In 2005 the acquisition of Calvin Klein from Unilever, and its renewal, catapulted Coty into the position of the world's largest fragrance company. The case provides an opportunity to examine the entrepreneurial, cultural, and organizational factors which enable acquired brands and employees to be re-invigorated and molded into a dynamic new global business. It asks if the cultural and other factors behind its rapid growth can sustain the company as it seeks growth much further as a top-five beauty company.

The case describes the foundation of Christian Dior, the leading Parisian fashion house, in 1946 and its subsequent globalization strategy. After explaining the historical origins of France's preeminence in upscale fashion, the case explores the challenges to this position from New York after World War 2, and the importance of Christian Dior's New Look in restoring French fashion to world leadership. The case examines, in particular, Dior's innovative strategy to combine a high-fashion business in Paris with a ready-to-wear business in New York, and his subsequent pursuit of licensing opportunities in jewelry and other luxury products. The case provides an opportunity to explore the role of creativity in the luxury fashion industry, and the challenges and opportunities of globalizing such an industry.

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