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The Honest Company SWOT & PESTLE Analysis

ID : 521231853| Jun 2022| 21 pages

COMPANY PROFILE -The Honest Company

Business Sector :Natural Baby Products and others

Operating Geography :United States, North America, Global

About The Honest Company :

The Honest Company is a consumer goods company that specializes in infants, personal care, and cosmetics. The company has its headquarters in Playa Vista, California. Jessica Alba founded the company in 2011 alongside Brian Lee, Sean Kane, and Christopher Gavigan as co-founders. Its products include environmentally friendly diapers as well as a natural line of bath, skincare, house cleaning, and organic nutritional supplement products, all packaged in convenient bundles that can be modified, personalized, and supplied whenever needed. Every product that the company develops meet the corporation's rigorous safety, efficacy, and integrity criteria. It uses tried-and-true components, then tests each product to guarantee that it fulfils its promise. The Honest Company announced in its first quarter earnings call of 2022 that its branded baby diapers and wipes would be available on www.walmart.com in the third quarter and in Walmart retail outlets across the United States in the fourth quarter.

The Honest Company's USP lies in its being a mission-driven organization devoted to leading the clean and conscious lifestyle movement. The mission statement of The Honest Company reads, "Meaningful transparency and thoughtful design. We’re on a mission to change the world, one product at a time".

The Honest Company Revenue :


US$ 318.6 million - FY ending 31st Dec 2021
US$ 300.5 million - FY ending 31st Dec 2020
US$ 235.6 million - FY ending 31st Dec 2019

Competitive Analysis of The Honest Company

SWOT
PESTLE
The SWOT analysis for The Honest Company is presented below in a matrix followed by the detailed analysis report:
StrengthsWeaknesses
1. In-House Product Development Capabilities that Power Innovation
2. Strong brand reputation and awareness focusing on connectivity with customers through strong marketing strategies
3. Focus on differentiated, subscription-based natural baby products
4. Integrated Omnichannel Approach to Drive Discovery and Accessibility
1. Customer complaints on inferior product quality
2. History of losses in last 2-3 years
3. Lawsuits against the company tarnished image and increased litigation costs
OpportunitiesThreats
1. Introduce new product categories to expand offerings to customers and improve existing products
2. Expand geographical footprint by increasing international sales
3. Increase Breadth and Depth of Distribution at Domestic Retail Partners
1. Stiff competition from existing large label brands in baby section
2. Subservient quality of materials sourced from third-party vendors directly harms the business
3. Heavy government regulation on e-commerce
SWOT & PESTLE (combined)
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Detailed SWOT Analysis of The Honest Company

Strength

1. In-House Product Development Capabilities that Power Innovation: Product innovation lies at the heart of the company’s business, having built a high-performance product development team that sets new standards with a proven track record of bringing innovative, award-winning products to the market. To maximize the impact of its product development capabilities, The Honest Company’s direct connection with their community enables them to understand consumer specific needs and alter their product innovation in tandem with those needs to create a sustainable competitive advantage over traditional CPG competitors. The company receives customer feedback to design their products through multiple avenues such as their internal customer service team, website and social media channels. For example, the company created and brought to market a new ‘Stay Safe’ cleaning collection, a complete set of cleaning, sanitizing and disinfecting solutions, in less than six months after the onset of COVID-19. In 2020, 22% of the company’s revenue was generated from stock keeping units introduced in 2020. In addition to using these capabilities to innovate new products to bring to market, the company also regularly redesigns or updates existing products, improving performance and expanding gross margin and has been the recipient for over 100 awards such as the 2020 “Parents” Best for Baby Award and seven Allure Best of Beauty awards.

The remaining section under "Strength" is available only in the 'Complete Report' on purchase.

Weakness

This section is available only in the 'Complete Report' on purchase.

Opportunity

1. Introduce new product categories to expand offerings to customers and improve existing products: The Honest company can accelerate its growth by bringing improvements and reformulating existing products to improve customer experience. Introducing innovative products in existing categories through research and development will allow THC to further improve its products. The company is currently reviewing its beauty offering ingredients to further advance in sustainable packaging and clean formulas. It can leverage its team of R&D experts, internal labs, flexible supply chain, direct relations with customers and rapid product development capabilities to introduce new product categories as well to suit customer needs. THC is currently attempting to leverage in-house innovation capabilities to launch new products that disrupt adjacent product categories. With new and expanded offerings, the company can tap into a larger audience in the market. Moreover, the company’s consumer research indicates that the brand resonates in a broad set of adjacent product categories, including new product categories within Household and Wellness and Skin and Personal Care.

The remaining section under "Opportunity" is available only in the 'Complete Report' on purchase.

Threat

This section is available only in the 'Complete Report' on purchase.

Major Brands :

  • The Honest Company
SWOT & PESTLE (combined)
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TABLE OF CONTENTS
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References used in The Honest Company SWOT & PESTLE Analysis Report

1. Registration Statement Form S-1 - https://investors.honest.com/static-files/424e3aeb-bdbe-4561-a54a-14abd0e1f6cd
2. Connectivity with the consumer: The Honest Company’s formula for growth - https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/connectivity-with-the-consumer-the-honest-companys-formula-for-growth
3. Jessica Alba's The Honest Company can't catch a break - https://money.cnn.com/2017/06/12/news/companies/honest-company-problems/index.html
4. TOXIC SUBSTANCES CONTROL ACT: AN HONEST UPDATE! - https://www.honest.com/blog/wellness/ingredients/toxic-substances-control-act-an-honest-update/20259.html
5. 55% Would Spend More on Eco-Friendly Products While Willing to Boycott Less-Green Companies - https://www.prnewswire.com/news-releases/55-would-spend-more-on-eco-friendly-products-while-willing-to-boycott-less-green-companies-301273018.html
The detailed complete set of references are available on request in the 'Complete report' on purchase.

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The Honest Company SWOT and PESTLE analysis has been conducted by Muskan Arya and reviewed by senior analysts from Barakaat Consulting.

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