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Business Strategy Assignment - L’Oréal

   

Added on  2020-10-04

14 Pages4623 Words493 Views
Business Strategy

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11. Analysis of PESTEL and SWOT of L’Oréal and analysis of its capabilities.........................12. Analysis of competitive environment of L'Oréal using Porter's Five Forces model..............4TASK 2............................................................................................................................................61. Evaluating different type of strategic direction available to L'Oréal......................................62. Justification and recommendation of the most appropriate growth platform and strategy....83. A strategic management plan with strategies, objectives and tactics......................................9CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11

INTRODUCTION Business strategy can be termed as the course of action or set of decisions that help theentrepreneurs in achieving business objectives and goals. It can be said that it a master planwhich the management of an organisation uses in order to gain competitive advantage in market,to carry out its business operation more efficiently, assist in attracting customer and gain theirloyalty so that they can achieve their desire goals of the business. It is foremost essential for abusiness to set its strategy which assist in defining the goals and direction of organisation. Thepresent report will assist in making analysis of business environment and strategy growthmanagement plan of L’Oréal. It is the French based cosmetic and beauty company, which is thesecond largest cosmetic producer in industry and is operating in around 150 countries. Presentreport will assist in understanding the analysis of internal and external business environment ofL’Oréal with effective strategic tool. It will also be included the various strategic directionavailable for L’Oréal. Further, a strategic management plan will be presented.TASK 11. Analysis of PESTEL and SWOT of L’Oréal and analysis of its capabilities.Business strategy can be defined as the course of action or set of decisions that assist theentrepreneurs in achieving business objectives. It can be said that it is a master plan which themanagement of an organisation uses in order to remain competitive in market, to carry out itsbusiness operation more efficiently, assist in attracting customer and gain their loyalty so thatthey can achieve their desired goals of the business (Scholes, 2015). L’Oréal is a French personalcare and cosmetic company founded in 1990, headquarter in Clichy, Haunts-de-Seine andregistered in Paris. It is world's largest cosmetic company which is operating around the world.In order to remain competitive in cosmetic and skin care industry, L’Oréal needs toregularly formulate its strategy. It will assist to have guidelines and structure in order to developthe business plan and helps it to achieve its business goals. Internal and external analysis ofL'Oréal will assist the management to prepare the base for the strategic planning. PESTELanalysis is an effective tool which assist in analysing the external factors of businessenvironment which affect the growth and success of L'Oréal. The PESTTLE analysis of L'Oréalare as follow:1

Political: This factor includes the rules and regulations that is framed by the governmentof the country where, it operates. The government policies and instability of politicalcondition in France will directly affect the manufacturing plant in Paris (Verbeke, 2013).The political interference in company's operation are some other factors. There areseveral laws and policies regarding imports of goods which assist in smooth operations inFrance. The political stability after globalization has assist the company in operating inseveral countries. This political factors will leads to impact the operational and marketingstrategies in that particular country.Economical: Such factors are related to the countries economical condition likeeconomic growth, interest rates, exchange rates and the inflation rate in the countrywhere it operates. L'Oréal has been affected from the weaken dollars rate and othercurrencies of country where it operates. This will leads the management to change itsstrategies like pricing, operational cost and increase the maximum optimization ofresources to maintain the profitability of company. Inflation rate in country affects thecost of goods which leads to make change in business operations and its decision makingprocess.Social: it can be said that, it is one of the main factors that can affect the growth andsuccess of L'Oréal, as the company's product are centred towards people (Campbell,Edgar and Stonehouse, 2011). The modern society is more conscious of their appearancesand fashion trend will help in increase in sales of L'Oréal products. Where, today'sgeneration is most leaned towards the ingredient, which can affect the sell of company.It would affect the strategies as the management has to change its product manufacturingas per the requirement of customers There are various countries where the cultural andethical beliefs will hinder the use of such products because its ingredients.Technological: The attributes of the technology such as innovation, research anddevelopment plays a huge role in the success of the company in cosmetic market. Theadaptation of technological attributes by the competitors can affect the businessoperations. Technology assist the L'Oréal in order to determine the factors like barriers inentry, to minimize the efficient production level which will contributes to makeoutsourcing decisions of the company.2

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