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L’Oreal crisis scenario (2006)

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  1. Company presentation.
    1. The type of organization, industry, and activities.
    2. The companies mission statement.
    3. The financial situation.
  2. Identification of company stakeholders.
  3. Issus analysis.
    1. Issues for the beauty industry.
    2. Risks Assessment for L'Oreal (micro environment).
    3. Celebrity endorsement.
    4. Cultural barrier.
    5. Competitive intensity.
  4. Identification of potential crisis L'Oreal could face.
    1. Normal accidents.
    2. Abnormal accident.
  5. Post crisis analysis and recommendations.
  6. Bibliography.
  7. Appendices.

This summary has been provided to allow top managers and executives at L'Oreal a rapid appreciation of the content of this report. Those with a particular interest in the crisis scenario management and communication may read the report to take advantage of the more comprehensive description of potential crisis both at macro and micro level and the ways the defect product crisis scenario was dealt with to get the full benefits of the material present. L'Oreal is a worldwide leader in the cosmetics industry. It is a publicly traded company that operates through four divisions: professional products, consumer products, luxury products, and active cosmetics. Its main mission statement is ?the effectiveness of our products is built on in-depth research that reflects our dedication to innovation, safety and the highest standards of reliability. By assessing potential threats at the macro level, marketers at L'Oreal have become increasingly alert of the possible danger of a crisis. The major ones are stated here, for a full review; please refer to the details in the report. There is still to this date increasingly links from top managers being supporters of very right-wing supporters and evolving L'Oreal in discriminatory practices. Also, the presence of harmful ingredients or product failure in cosmetics can lead to serious health consequences.

[...] Part II The Scenario October 2006: crisis detection L'Oreal has discovered that we are receiving an abnormal number of customer complaints when using Reflexions products. Indeed, the after sales service department kept recording tracks of warning signs. As referred by Barton (1993) the podromes in this case were: false lining colour when applying the product and severe scalp irritation. Organising a planning team: Esteban de la Pena, general manager of Haircare After Sales services department sent an email of high importance to Nicholas Dawson, President of Consumer Products in regards with an increasing number of complaints. [...]

[...] Details: Immediately upon discovering there was a crisis L'Oreal began to take action. The initial communication to the public was a radio interview. The purpose of this radio interview was to make the public aware that there was a problem with the Reflection colour line of hair products as well as to inform the public of the actions L'Oreal was taking to ensure consumer safety. These actions included removal of all the reflection line from the distributor's shelves and to communicate the customer service line where customers could receive more information. [...]

[...] We now want to act as a smart corporation as the learning curve in crisis communication from this experience and to apply it if it may happen again for a similar crisis or another meaningless or meaningful crisis. Several policies were created and implemented: ( Developing a policy statement on testing as well as Total Product Quality Management ( Conducting advance investigation with science and medical experts ( Compiling a safety booklet ( Collecting footage of manufacturing and testing results to fill in our quality norms. [...]

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