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Published: June 6, 2011

 
 

Focus vs. Hocus-Pocus at Alberto-Culver

The CEO of this nimble cosmetics company explains the advantages of a small size and a coherent strategy.

Some people look at Alberto-Culver and say it must be a competitive disadvantage to be a fraction of the size of our behemoth competitors in the cosmetics category. But we look at our size and know that it is actually an advantage. We are passing US$1.5 billion in sales, recently completed the acquisition of the second-largest skin care brand in the United Kingdom (Simple Health & Beauty Group Ltd.), and have a valuation multiple in the top range of our peer group.

How do we do it? Our small size and business strategy enable us to do five things really well.

1. We are focused and operate in two categories and in a limited number of geographies. As a result, we are able to efficiently transfer our knowledge across our brands and countries. People at our company have a deep understanding of what it takes to win. We don’t run down a lot of blind alleys.

2. We know that in order to be successful, we need to do things differently from our competitors. We are able to try new things, be innovative, and apply our insights in new ways. An example is our success in taking the Nexxus hair care brand from salon channels into mass channels.

3. We don’t waste money on activities and capabilities that don’t matter. R&D is a good example. Innovation is important in hair care, but it is possible to spend a lot on little nuances that, quite frankly, are invisible to the customer. We avoid that hocus-pocus, if you will, and put our investments into what is truly differentiated in the consumer’s mind.

4. We can be nimble, flexible, and quick. We do not have layers of people, and that lack of bureaucracy makes it possible for us to identify opportunities or issues and take action. It is easier to get people together around the globe or to put a decision into action.

5. Our size allows us to get to know our employees and see what they do. Everyone plays an important role in building our success. Our people are proud to be working at a company where they know they can make a difference.

Author Profile:

  • James Marino has been the president and chief executive officer of the Alberto-Culver Company since November 2006. Alberto-Culver has agreed to be acquired by Unilever in 2011.
 
 
 
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