Unit 5 Chapter 4 Closing Case
1. In most countries around the world, the beauty products industry is
dominated by a small set of multinational giants named in the case.
Why in Brazil none of them has emerged as a market leader?
Part of the reason for the continued success of Natura against multinational giants has been the
focus towards black women. As most of the Brazilian women are black, this is an obvious
advantage. Also, localized and motivated women are ultimately the driving force behind sales of
Natura. They are able to promote, sell, and receive feedback for the Natura brand leading to a
decrease in costs, an increase in brand recognition, and a better ability of the company to adapt
to the needs and desires of their loyal consumers. Furthermore, Brazilians have remained loyal
to the Natura brand in part due to the product makeup (no pun intended) with elements coming
from the Amazon forest and due to Natura being Brazil’s original cosmetics company. They set
out to capture their local market at a time when these large multinational companies were only
beginning to enter Latin America. Being the first company to corner a market is a huge initial
advantage. Add in Natura’s focus on their local demographic and their support of local sourcing
and protective practices, and it makes it very difficult for another company to come into the
market and convince a consumer who uses and enjoys Natura’s products to convert.
2. From a VRIO standpoint, what is behind Natura's enviable
If we look at the VRIO framework introduced in the second half of this chapter, we can start to
structurally determine why Brazil has emerged as a market leader.
V- value adding resource- Similar to IBM in the the mid 20th century, Natura has continued to
meet the wants and needs of Brazilian women, adapting and improving their products to stay on
top. Because of this adaptation, they have stopped their value adding resources and capabilities
from becoming non-value adding assets.
R – rarity- A green Amazon plant based product and being a company that specifically targets
the demographic within their borders (one that many other cosmetic companies fail to do), they
have secured a reputation of being for the Brazilian people. They also prove that they are for the
overall well-being of these people and the Brazilian environment through their green and fair-