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L'Oreal case study: Strategic Management

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  1. Environmental scanning
    1. Internal environment analysis
    2. External environmental analysis
    3. SWOT analysis
    4. IFAS and EFAS
  2. Strategy formulation
    1. Mission and objectives
    2. Strategy: SFAS
  3. Strategy implementation
    1. Develop the current market
    2. Develop the emerging market

L'Oreal is a French-based company specialized in the development, manufacture and marketing of cosmetics and dermatological products.

Created in 1907 by Eugene Schueller, the brand has considerably developed itself in a highly competitive market with constant change. L'Oreal has succeeded in establishing itself as a leader on its market.

But the question that we need to ask ourselves is whether L'Oreal can continue as the market leader forever. And what are the different decisions and actions that can be undertaken by the company to maintain its top spot?

In this case, strategic management has an important place as it is ? that set of managerial decisions and actions that determines the long-run performance of a corporation ? .

To understand how L'Oreal could manage to stay as the leader in its market, we will develop different levels of analysis that will enable us to propose several recommendations to maintain the positioning of the company.

[...] Moreover, they could also give some options about the other competitive brands and ask candidates which sense could be triggered by other brands. Those results could help marketers to know their brand position as well as competitors'. In addition, they could know the overall sensory impression of a brand and follow the result to offer a suitable strategy. On the other hand, the sensory impression of a brand can influence brand loyalty. After measuring those senses through different techniques, market researchers can gather the degree of each sensory perception and know the degree of loyalty customers have (Lindstrom, 2005). [...]

[...] Indeed, the company has chosen a wide compromise between a luxury and a middle range strategy which it actually names ?Casual Luxury?. Price, segmentation and positioning are closely related to the ?Casual Luxury? image they want to give Concept stores Abercrombie & Fitch At the beginning of the century, Abercrombie & Fitch only sold outdoors clothes which include camping gear, guns and outdoors clothing. But when the brand was relocated to a more easily and accessible midtown address, near Fifth Avenue, the store became a museum divided into 8 floors which provide different amenities: the basement and the mezzanine roomed shooting range, the second floor through fifth floors was reserved to suitable clothing and sports items; on the next level was dedicated to the picture gallery, bookstore and training centers. [...]

[...] The company has main long-term goal concerning its entry on the market is to successfully execute its strategy of flagships openings all over the world and especially in Europe and Asia A well-settled up company From a financial point of view, the sales of Abercrombie & Fitch have never declined since nearly ten years,; on the contrary, it has been steadily increasing, except for the two past quarters 2009, due to the economic crisis. In 1998, Abercrombie & Fitch global sales were about $805 millions, last year, the brand made more than 3 billions. [...]

[...] As a result, in order to develop clients' acceptance of a brand, brands can use special and distinct odor in their showrooms Touch ?Touch alters us to our general well-being.? (Lindstrom p.27) Human beings use touch sense to develop their perception of the products. The product's texture can give people different impression. For instance, when customers go to buy clothes, they usually touch the product and feel the texture in order to make share it is fit to them. Through touch, people can image whether the texture is good or bad. [...]

[...] There are two process of retrieving information from long term memory and they are recall and recognition. Recall helps to retrieve messaged from the long term memory while recognition helps to recognize things which we have seen before. Hence through the long term memory process messages or information are retained for a longer period of time. Brand as a Memory By creating brand as a memory, company and products have a greater chance of delivering messages to their target market. [...]

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