Like it was mentioned in previous posts, 3D makeup printing technology has the potential to revoluationalize the makeup industry as a whole. However, before managers make the decision to utilize such technology in their businesses, they have to consider if the benefits will out weigh its costs.
Benefits of 3D printing:
- If mink is successfully implemented into the makeup industry, then the company will open a new niche of customers. Behind Choi’s idea of freedom is to have variety in makeup colors. At the moment, what Mink is doing is to get ahead in cosmetics business to have “color” as a special appeal to her identified market niche. Mink will gain a certain percentage share of the $55 billion beauty industry by making it more accessible to consumers.
- Managers are primarily concerned about profitability. The key question is: How will this technology going to profit my company in the long run? From here, managers would be required to consider Porters 5 Forces which include:
- 1) Bargaining power of consumers – There is no alternative machine like Mink available for consumer to switch to. In addition, the existing mass retail vendors may attract potential customers away from Mink if they think $300 price is not worthwhile. I mean, consumers also have the power to influence price.
- 2) Threat of substitutions – There is no other similar products available.
- 3) Bargaining power of suppliers – Mink might need to contract with reliable vendors (including printer manufactures and printing material suppliers) to successfully market Mink without significantly affecting the targeted retail price Mink ($300) and the quality of substrates used. I think suppliers have market power as there are many of them. However, Mink can consider outsourcing.
- 4) Threat of new entrants – Overtime, when consumers may ask for more options to fulfill their interests in terms of adding glitter lip gloss or adding eyeshadow with shimmer. Entrepreneurs seek new profit source may enter the market by offering alternative product options in terms of pigmentation and materials.
- 5) Rivalry among existing firms – “The beauty industry is highly competitive and at times change rapidly due to consumer preferences and industry trends”. Mink will create more competition. Existing companies may respond by spending more on “advertising, promotion, merchandising and packaging, and the timing of new product introductions and line extensions”.
Costs of 3D printing:
- Since mink is still in its earl y start upstages and has no officially been released into the market, business managers need to consider whether or not they have the resources to fund the R&D of a product whose future seems vague.
- Managers need to think about how to implement this new technology into the already accepted mainstream of products.Should the company celebrity endorse the product, or just let the market accept it as is?
- Managers should consider Porter’s 5 Forces as well as assess the feasibility of the new technology. Feasability has four dimensions to it. It includes cost feasibility, schedule feasibility, technical feasibility and organization feasibility. For cost and schedule feasability, managers need to consider whether or not the company has enough funding and the hours needed to finish the R&D part of the printer and release it into the market. With technical feasibility, managers need to consider if the software such as photoshop has the ability to meet the needs of the printer, or will the company be required to create a new software specifically for the purpose of using the printer. Finally, managers need to consider organizational feasilbity and whether the printer fits with what the organization is already acustommed to producing. For example, creating makeup palettes. Will the printer eliminate the company’s primary source of income?