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Company strategy L'Oreal

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  1. Presentation of the group.
  2. Presentation of the strengths/weaknesses of the company.
  3. Presentation of environmental opportunities and threats.
  4. Increasingly constraining regulations.
    1. Threat of competition.
    2. The performance of L'Oreal.
    3. Various activities of L'Oreal.
    4. Professional products.
    5. Mass consumption products.
    6. Luxury items.
    7. Active cosmetic products.
    8. Performance analysis.
  5. Diagram of the five competitive strengths in the cosmetics industry.
    1. New entrants.
    2. Competing intensity.
    3. Substitution and innovation.
    4. Bargaining power of suppliers.
    5. Bargaining power of customers.
  6. Key success factors for cosmetics industry.
  7. Strategy of the L'Oreal company.
  8. Orientation.
  9. The structure of L'Oreal.
  10. The structure and the function of L'Oreal's Human Resources on a global level.
  11. Recommendations.

L'OREAL, world leader in the cosmetics market, was founded as family enterprise in 1909 by the chemist Eugene Schueller who marketed products that he himself conceived and produced, at the Parisian hairdressing salons. This spirit and the values attached to it are what cements the group and allows it to dominate the market of cosmetics today. The L'Oreal group was born with the launching of hair color on the market, a real innovation, which was the first great success of what was going to become the leading company in the cosmetics market. In 1912, the group started to go international by exporting its products in France, Holland, Austria and Italy. During the century the L'Oreal group did not cease to maintain its course of action that is to say "innovation and communication". The Research department was developed to meet the needs of innovation and has continuously grown. The group which started with 3 researchers in 1920 has more than 2823 to date. Today, it is quoted on the stock exchange and has more than 400 commercial subsidiary companies and about fifty factories throughout the world.

[...] Acquisitions targeted abroad with Jade in Germany and Maybelline in the USA (make-up), the American companies Soft Sheen and Carson in ethnic cosmetics, and the Japanese company Shu Uemura. Threats Direct sales (mail order and door-to-door selling) fell by after increasing for 10 years. Increasingly constraining regulations. Threat of competition: Procter & Gamble: - Acquisition of the German company Wella (8th in the sector of the shampoos and colorings occupying 2nd place in this segment), Clairol and Jean Patou perfumes. [...]


[...] Last year, for example, L'Oreal acquired the American company SkinCeuticals and Unilever's prestigious fragrances were acquired by Coty in order to improve the position of its company Lancaster Worldwide. In the cosmetics industry, competition is more a function of innovation than price and promotion. Innovation is thus an asset which relates to the competitive intensity. The competitive intensity in this sector is thus very strong. Substitution and innovation: A true substitute does not exist, thus we do not see any threat. [...]


[...] Strategy of the L'Oréal company The business portfolio of L'Oréal is divided rather unequally into 2 branches of activities: - The cosmetics branch. - The dermatological branch. The cosmetics branch represents the major part of the sales turnover, the dermatological branch being especially used within the framework of the research and development of products. The 4 branches of the cosmetics division: - public products - professional products - luxury products - active cosmetics (para-pharmacy) According to the chairman of the French firm, the brands would be located between the ?cows and calves? on the BCG matrix. [...]

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