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Halal Cosmetic Products: Innovation Management Report

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Updated: Jul 21st, 2021

Introduction

All businesses in the UAE have to adhere to specific cultural and national standards in order to be successful. The industry of beauty and hygiene products is not an exception. The country has strong traditions that affect all parts of people’s lives as well as a religious foundation. International businesses establishing their place in the UAE market have to consider their opportunities for appealing to customers. Otherwise, their efforts will fail to gather significant local support.

The current report will explore the opportunities of an international company Olay the products of which are represented on the United Arab Emirates’ cosmetics market. The investigation will be conducted in four steps, including diagnosis, design, delivery, and evaluation. First, Olay’s existing structure and performance will be analyzed in relation to the standards of the UAE cosmetics market to demonstrate areas where change is needed. Second, the design of the possible intervention will be discussed. The implementation approach, acknowledging its impact on stakeholders and leaders, will be next. Finally, the report will consider ways of measuring the outcomes of change.

Diagnosis

Olay is a cosmetics brand that started in South Africa in 1952 (Chesters). It was relocated to the United States after being purchased by Procter & Gamble. Currently, Olay is a company that seeks international recognition along with other brands. Thus, it is expected of it to enter and strengthen its position in the growing markets. At the moment, the UAE cosmetics industry is expanding with both international and local companies introducing new products, solutions, and opportunities to Emirati residents. Nonetheless, Olay may fail to adequately incorporate itself into the UAE market due to its unclear position on halal ingredients – the information found about some Olay products poses the organization as not halal (Darul). This detail about the brand is vital when discussing it in the context of the UAE since the country’s traditions are firmly bound to religion, Islam (Hajipour et al. 339). Thus, a substantial change in both the company’s policies and its transparency is needed.

The UAE market for organic, green, vegan, and halal cosmetic products is on the rise. Women prefer to purchase cruelty-free and halal cosmetics if they are aware of their existence (Chęś 114). This drift can be explained by the fact that the country is economically evolving, and its citizens have access to money for non-essential purchases (Izberk-Bilgin and Nakata 290). Furthermore, the information about the halal status of products is dispersing quickly via the internet. Magazines and other publications research cosmetic brands in order to find those that align with the religious beliefs of Emirati people. As a result, many local businesses now consider the ingredients of their goods as a top priority and center their marketing efforts and brand recognition on these characteristics. Darul outlines a number of ingredients that are not halal, thus discouraging a large portion of the UAE’s residents to purchase certain products. In order to stay relevant and grow in the UAE, Olay has to follow this trend and innovate.

This problem is an opportunity gap for Olay since the company has to anticipate the growing interest in halal cosmetics. In this case, customer preferences are vital to the success of the brand since competition in the industry of beauty products is exceptionally high (Chęś 125). If Olay wants to continue to appeal to UAE residents and increase its sales, it has to reconsider its current lack of new ideas’ recognition. The main need for Olay is to change its products to adhere to the country’s standards and make sure that these alterations are well-informed, sustainable, and profitable. Finally, the company has to transparently state its commitment to halal cosmetics in order to attract the attention of customers and enter the competition.

Design

In order to understand what exactly has to be changed, one has to explain the concept of halal ingredients. In traditional Islamic law, permissible actions and items are considered “halal.” According to Darul, people who practice Islam can refer to several guides such as the Muslim Food Guide to choose these products. For example, all alcohol is forbidden by the religion which means that ingredients such as ethyl alcohol are considered prohibited by some scholars (Darul). Moreover, a number of pigments are derived from animals, including carmine red which is created from insects. Under Islamic law, people cannot consume such products, thus making color cosmetics with this ingredient not halal. To adhere to these specifications, Olay needs to examine the existing guides for halal rules and consult religious scholars.

The suggested change is substantial since it requires Olay to review all products that it offers to the UAE customers. According to the SORT framework (Scope, Origin, Rollout, Timing), one has to start designing a plan for innovation by determining its scope. Although the move towards introducing halal cosmetics seems significant, the scope of the activities needed for this change is incremental. First of all, Olay’s’ internal processes will stay the same – it will produce cosmetics of the same type using the majority of the already existing ingredients. Its employees will not need to relearn any major rules or procedures, and the structure of the company will not need any expansions or reductions. The decisions that have to be made will include some changes in suppliers, manufacturing processes, and marketing campaigns. Therefore, the nature of all changes is incremental since it does not alter any core norms.

It should be remarked that not all products will have new ingredients. The available information about halal standards refers to the ban on byproducts of pork, alcohol, and some other minor modifications (Darul). Thus, only a small number of goods such as creams, oil-based substances, toners, and red color cosmetics will undergo a revision. Here, the incremental change would be to replace animal-based ingredients with plant-based ones. Since many brands are already making steps towards cruelty-free branding, it is reasonable for Olay to consider the same policies.

Next, it is crucial to understand the origin of change. As the identified problem is linked not to the internal procedures but the external influence (customers’ preferences), the activities will be primarily initiated by the top management. The change towards halal ingredients cannot start from the bottom because the manufacturers and sellers do not have the power to choose which products go into Olay’s cosmetics. The leaders of the organization, in contrast, can choose a new direction which the company will pursue. Thus, the higher management of Olay needs to develop a plan with a new vision in mind and provide its supply chain members and employees with clear directives and aims.

The company has to address possible issues that may arise during the enactment of plans. It has to listen to the feedback of suppliers, manufacturers, and distributors to maintain a high level of support and adherence to the outlined objectives. The top-down change model should not make the brand inflexible or stifle the voices of its contributors. As the proposed plans require collaboration between different members of the supply chain, communication plans and open conversations are essential to the organization’s success.

Delivery

After discussing the origin and the scope of the initiative, one needs to consider the rollout and timing of the required activities. The efforts can be localized or system-wide, referring to the extent of change that is performed at once. In this case, Olay will employ a combination of the two approaches. On a localized level, Olay will revise its products and document all ingredients that need to be replaced. On a system-wide level, the company will change its marketing for all products whether their production was or was not altered. This global change is important because customers are likely to prefer brands that are fully committed to one ideology, especially if it is political or religious (Hajipour et al. 345). As an outcome, the brand will raise awareness for all its products and make a general statement while implementing small changes at a localized level.

Furthermore, localized change is completed in steps which also can be attributed to the activities in the suggested plan. Prior to announcing its halal status, Olay needs to revise its practices, connect with new suppliers, develop new manufacturing processes, and obtain regional certification. These procedures cannot be completed simultaneously, thus requiring the company to pay increased attention to specific departments. The marketing, however, will be changed for all products offered in the region, incorporating elements of a system-wide process.

Next, the timing for this plan’s implementation has to be investigated. Here, one may utilize the change model of Kurt Lewin that separates every initiative into three main steps: unfreezing, enacting, refreezing (Hussain et al. 123). The first stage is to evaluate the existing routine and see where alterations are needed. The second process is to enact the developed plan and introduce changes in the organization. Finally, the new processes will be institutionalized as the company’s current standard. The speed of completing these steps will determine the brand’s success in the UAE market and its ability to prepare for future trends. If Olay implements the plan too quickly, it may overlook some key details and receive negative feedback from major stakeholders (customers, suppliers, manufacturers, or employees). However, if Olay takes a long time assessing its policies, it will lose all advantage in the market and decrease brand recognition.

The high concentration of competitors of the cosmetics market in the UAE calls for a quick change. Olay needs to react to the growing trends and accommodate consumers’ needs for halal products. Thus, the business requires its management to display leadership and communicative skills. Kotter’s change implementation model may help Olay to lay out a plan that is transparent and effective (Hornstein 291). First of all, the company needs to create a sense of urgency – show that halal cosmetics in the UAE are becoming more and more popular which puts their share of the local market at risk. Then, the management should pick efficient and inspiring leaders to form a team for initiating change. The group may include financial officers, top and middle managers, manufacturing specialists, marketers, chemists, and suppliers’ representatives. The third step is to generate a vision that would unify the company’s employees and explain the objectives to all stakeholders. This ideology will formulate the need to innovate towards a brand that is accepted not only by halal standards but also by vegan and cruelty-free definitions.

After developing a vision, Olay has to communicate it to stakeholders. The team of leaders will interact with employees and supply chain members to announce the changes that the company aims to enact. All structures that undermine the efforts of the business should be removed. During this step, the organization will change the existing structure by supporting cruelty-free and organic suppliers and investing in research to manufacture halal cosmetics. Olay has to create a plan with short-term wins and encourage employees to achieve small goals. Each product change and successful ingredient substitute must be recognized as steps towards reaching the final goal. Moreover, these steps should not be viewed separately but as a system of continuous improvement. This approach will lead to the change being viewed as positive and stable, and the new system will be institutionalized with the help of elected leaders.

The described activities should happen in the form of bold strokes and long marches (Eachempati 78). The initial introduction to the new ideology as well as its final reveal to customers are events that attract attention, thus being framed as a prominent strategic decision (bold stroke). At the same time, all incremental changes, such as ingredient review, testing, and communication with suppliers, will take time and collaboration (long march).

Many stakeholders will be affected by the proposed change, and their agreement to the plan is vital for the company’s success. The first group is the suppliers of ingredients for cosmetics that will undergo revision. Their collaboration will mean that Olay will not need to search for new businesses with which it could work. However, Olay will likely have to establish relations with other firms that support the same cruelty-free and halal vision (Izberk-Bilgin and Nakata 285). Second, it is crucial for Olay to gather support from the company’s development department. These employees’ activities will determine the quality of the final products. The business’ investors are another group of people whose financial stability will be impacted. Their cooperation is the central part of Olay having enough resources to implement change.

Evaluation

The introduction of change cannot be completed without the company evaluating all processes and their results. The impact of this plan may be challenging to measure as it depends on a multitude of internal and external factors. Nonetheless, some aspects of change are measurable, and they can demonstrate the effectiveness of the organization’s activities. All metrics should be based on the company’s goals – receiving the UAE’s halal certification, increasing the firm’s share on the UAE market, and attracting new customers. Therefore, the first assessment will measure how close is Olay to achieving each of these goals. For instance, each step towards the certificate can be measured according to its time frame, expenses, employee participation, and other factors. Similarly, customers’ response to the new ideology can be evaluated with surveys and focus groups. The second type of assessment should focus on the employees and stakeholders of the business. Their cooperation will ensure sustainable and continuous change. Thus, their honest feedback about each step is important as well. Olay can distribute surveys or conduct interviews with select representatives.

All in all, Olay needs to consider this change as an inherent part of being a business in the ever-evolving world. The market for cosmetic products highly depends on consumers’ opinions and preferences. Each new trend has to be acknowledged and addressed to retain clients’ interest. The current trend for green, vegan, natural, and halal cosmetics is not limited to the UAE, but the country’s strong traditional foundation is decisive in the market’s evolution.

Works Cited

Chęś, Agnieszka. “The Middle Eastern Market of Cosmetics and Toiletries: Characteristics Underlying Demand and Potential for Growth.” Studia Ekonomiczne, vol. 303, 2016, pp. 114-133.

Chesters, Anna. The Guardian. 2012, Web.

Darul, Kai. Hijabi Mag. 2015, Web.

Eachempati, Prajwal. “Change Management in Information Asset.” Journal of Global Information Management (JGIM), vol. 25, no. 2, 2017, pp. 68-87.

Hajipour, Bahman, et al. “Raising Halal Cosmetic Awareness Among the Respective Consumers.” International Journal of Academic Research in Business and Social Sciences, vol. 5, no. 7, 2015, pp. 338-349.

Hornstein, Henry A. “The Integration of Project Management and Organizational Change Management Is Now a Necessity.” International Journal of Project Management, vol. 33, no. 2, 2015, pp. 291-298.

Hussain, Syed Talib, et al. “Kurt Lewin’s Change Model: A Critical Review of the Role of Leadership and Employee Involvement in Organizational Change.” Journal of Innovation & Knowledge, vol. 3, no. 3, 2018, pp. 123-127.

Izberk-Bilgin, Elif, and Cheryl C. Nakata. “A New Look at Faith-Based Marketing: The Global Halal Market.” Business Horizons, vol. 59, no. 3, 2016, pp. 285-292.

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