(20 MARKS) SECTION A: CASE STUDY There are THREE (3) questions in this section. Answer ALL questions. BEAUTIYOU CORPORATION: SURVIVING IN GLOBAL PANDEMIC In early 2020, BeautiYou Corporation was affected, like many businesses, by the global coronavirus disease (COVID-19) pandemic. BeautiYou Corporation, Chief Executive Officer (CEO) and founder, Jenny Chia, sat in her Kiara ills office pondering the implications for her Malaysian-born beauty brand. Since its inception in 2014, BeautiYou Corporation had seen tremendous growth, and its products were now available in over 15 physical stores nationwide. Was this success going to unravel due to COVID-19? With so many factors beyond Jenny's control, could this company overcome the uncertainty and challenges that accompanied the pandemic? A FAMILY COMPANY Jenny, a 35-year veteran of the beauty industry, had graduated from the University of Toronto as a chemical engineer. Motivated by her interest in the beauty category, Jenny began her career as a product developer for Make-Up Art Cosmetics (MAC). There, she then revolutionized the lipgloss category by creating the original formulation for MAC's signature gloss, Lipgloss. In 2000, Jenny left MAC to create a complexion beauty brand called Cover JX Skin Care Inc. Then in 2011, Jenny decided to take a step away from work, entering early retirement in order to spend more time with her teenage daughters, Alice and Christine. Jenny's retirement was short-lived: As Jenny spent more time with Alice and Christine, she closely observed their beauty behaviours through her entrepreneurial lens, and she noticed that the girls struggled to find beauty products that met their daily needs. Inspired by her daughters' beauty lifestyles, Jenny identified a gap within the well-established cosmetics industry. She explained, "Women increasingly sought simple, easy-to-use products that would shorten their makeup routines. They admired a natural look with neutral tones." Armed with this insight, the three women, together with her husband and father, launched BeautiYou Corporation 's first product in May 2014. Rather than taking an impersonal big-business approach, Jenny adopted a family-owned business model that enabled consumers to form direct connections with the brand and the women behind it. Jenny explained, Unlike my parents' generation, which was not very social with their kids, my generation talks to their kids, shares ideas, gets inspired, and are more open to being friends and collaborating." Jenny assumed the role of CEO and used her deep industry connections to establish the brand and develop the requisite infrastructure. Alice and Christine participated in product development and acted as chief inspiration officers, while also managing the company's social media presence. In describing her daughters' roles, Jenny said, "I really try to ensure that BeautiYou Corporation is inspiring, fun, educational ... that I don't get overly involved in their voices." Jenny added, "From the mom's perspective, every day I watch them growing and I am creating these hashtag girl bosses that are independent and creative and excellent at what they do. They have presented to groups of 100 to 150 executives at Sephora and they have accomplished things that most adults might think are intimidating, and they do not think twice about it." AN IMMEDIATE SUCCESS Three years later, emphasizing on simplicity and naturalness, BeautiYou Corporation developed prototypes of its signature multi-purpose makeup pencils. Armed with these prototypes and her vision, Jenny persuaded the high-end boutique retailer Space NK to sell BeautiYou Corporation products in its stores. Jenny recalled, "In exchange for an exclusive three-month launch, they partnered with me to be my press arm acting much like a PR agency. They created so much buzz." BeautiYou Corporation leveraged this buzz to convince more premium retailer including Forever 21 Inc., Sephora, and Sasa to offer BeautiYou Corporation products. Within a year, BeautiYou Corporation was on the shelves of more than 100 stores nationwide. It had also signed an exclusive agreement with online retailer Beautylish Inc. (Beautylish). Concluding a remarkable first year. BeautiYou Corporation won the Cosmetic Executive Women's 2015 Brand of the Year award. In 2015, higher-than-expected sales per retailer led BeautiYou Corporation's revenue to surpass RM5 million. BeautiYou Corporation also had to expand its facilities, moving in May 2014 from its home base into a 74-square-metre facility in West and East Malaysia. Yet, within six months, BeautiYou Corporation was uprooting itself once again, this time for a 260-square-metre space, also in West and East Malaysia. By early 2020, BeautiYou Corporation had almost 100 products and adding more retailers. STRATEGY BeautiYou Corporation's beauty empire had been built using a disciplined and focused strategy. Central to its success and delivering upon its value proposition, BeautiYou Corporation has become a renowned brand in Malaysia, and when creating a product, BeautiYou think about all skin tones, all ages, all sexes, and all skin types. This company formulated products using clean, non-toxic ingredients. Its multi-purpose pencils were paraben free. The packaging embodied an eco-conscious design: each pencil was packaged in a reusable, matte black tin with a mirror on the underside, offering consumers convenience for an on-the-go routine. The pencils eliminated the hassle associated with makeup brushes and instead allowed consumers to blend and smudge the makeup with their fingers. Product innovation was central to the success of this company. The strategy demanded that this company expand its internal resources only on those activities for which it offered a unique capability; for everything else, it relied on carefully vetted and cultivated partners. As a result, the beauty brand was able to dedicate its own highly skilled workforce to developing and improving its formulas. According to Jenny, product innovation began with being apprised of the latest trends. With this in mind, Jenny and her experienced taskforce ensured that BeautiYou Corporation was always ahead of the curve by staying informed about changing consumer behaviours through Fashion Week shows and community feedback. The process of product development is really about working on many things at once. There was always a new product, shade, or texture being developed in the company headquarters. Jenny concluded that this strategy allowed the company to introduce new products to the market quicker. Although product innovation was an important part of the process, Jenny added that this involved more than simply developing and improving the formulas. BeautiYou Corporation also paid careful attention to the design of its packaging to ensure that it was delivering on its commitment to sustainability. BeautiYou Corporation also retained tight control over its marketing, which was led by Alice and Christine. The company's target consumers were young, majority of BeautiYou Corporation's marketing tactics were carried out through social media platforms. Jenny explained: "They are not reading magazines; they are not watching TV; they are watching YouTube videos; they are on Instagram; a brand could be a person, product or retailer. Who and what they like to follow are very lifestyle driven." Eschewing traditional advertising methods, BeautiYou Corporation focused on its digital presence and created its signature hashtag, go BeautiYou. BeautiYou Corporation's marketing also featured social influencers, including celebrities like Fazura and Marrion Counter. This company relied on a bevy of partners to support these core activities. It outsourced the vast majority of its manufacturing to a Korean company, which then transported the goods via airfreight to BeautiYou Corporation's various distribution centres around the country. Once the products were received at the distribution centres, BeautiYou Corporation's assembly, warehouse, and logistics teams were responsible for packaging and shipping all orders to retail partners and clients nationwide. As BeautiYou Corporation grew, it struggled to continue maintaining the degree of personal contact needed to ensure each retail store achieved its sales targets. Consequently, in 2020, BeautiYou Corporation partnered with Beauty Barrage, a sales and education management company. Jenny explained, "We love to educate, we love to service clients, we love to show them how to create a BeautiYou Corporation look. As BeautiYou Corporation entered the new decade, it was on the precipice of success. TROUBLE AHEAD On December 31, 2019, China's authorities alerted the World Health Organization (WHO) to a cluster of pneumonia-like cases in Wuhan, China, a city that was home to more than 11 million people. On January 23, 2020, Wuhan and surrounding cities were put under lockdown, and all non-essential businesses were closed. The situation quickly escalated, as countries across Asia continued to report an increasing number of confirmed cases. By February 1, 2020, half of BeautiYou Corporations stores in West and East Malaysia were closed. Jenny explained, this gave BeautiYou Corporation a six-week window foreshadowing what could potentially happen should COVID-19 expand beyond the country. What is noticeable was that the recovery was not going to be quick, and it was not going to be consistent. Put it this way: we knew that there was no such thing as a post-COVID" from what we learned in Southeast Asia. We learned that there is a new normal, and everybody has to be very agile and flexible. For instance, look at a market like Singapore. They closed early February. They reopened early March because the community spread was under control, but within two weeks, they closed down again because of a second wave. Brick-and-mortar stores accounted for approximately two-thirds of BeautiYou Corporation's revenue and 80 percent of its costs, yet when some retail stores closed, the associated fixed costs remained. Jenny explained, "We learned very quickly with the situation that we need to be very conservative and we have to plan for a worst-case scenario." That worst-case scenario quickly became BeautiYou Corporation's reality only a week later. By mid-March, the earning BeautiYou Corporation's business was badly affected by COVID- 19. Since COVID-19 has become a global pandemic issue, most businesses were affected. The Malaysian government began implementing stay-at-home orders and closing all non- essential businesses. The common effect among companies was a severe decline in revenue. Jenny's first step was to reforecast revenue, adapting to new normal phenomenon. Jenny knew she would have to quickly pivot BeautiYou Corporation's strategy in order to minimize losses. The question was, how? QUESTION 1 The Malaysian government responded to the pandemic by closing down all non-essential businesses. If you were Jenny, critically discuss how you would overcome this issue? Provide TWO (2) relevant justification. (10 Marks) QUESTION 2 Propose ONE (1) sales strategy to ensure the company is able to keep up with its performance. (5 Marks) QUESTION 3 Suggest ONE (1) approach how Beauti You Corporation should respond to the widespread demand for hand sanitizer