Business Strategy Assignment -L’Oréal

Added on - 22 Nov 2020

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Business Strategy
Table of ContentsINTRODUCTION...........................................................................................................................3P1 Applying appropriate frameworks analyse the impact and influence of macroenvironmental factors on L’Oréal and its strategies..................................................................3TASK 2............................................................................................................................................5P2 Analyse the internal environment and capabilities of a given organisation using appropriateframeworks.................................................................................................................................5TASK 3............................................................................................................................................7P3 Porter's Five Forces Model for examining competitive environment....................................7TASK 4...........................................................................................................................................8P4 Strategic management plan for L'oreal by including strategies, objectives and tactics........8CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONBusiness strategies are defined as the directions or frames which can be used by themanagers of a firm for achieving preset goals or objectives. Every business organisation has tofollow a proper code of conduct which will assist them in enhancing their strategic capabilitiesso that strategies will be sustained for a long time period. It also supports the business entities inenhancing their productivity at competitive market. This report is based on L’Oréal which is amultinational company and deals in cosmetic sector along with this, it is based in Paris, France.This assignment will include PESTLE, SWOT, VRIO framework of an organisation so thatcapabilities can be identified in proper manner. Furthermore, it also discusses about the porter'sgeneric strategies which can be used by the managers for making a proper strategic managementplan so that growth and sustainability can be achieved in the marketplace.TASK 1P1 Applying appropriate frameworks analyse the impact and influence of macro environmentalfactors on L’Oréal and its strategiesExternal analysis of any organisation means broad business environment factors thatimpact on any business where as internal analysis includes strengths and weaknesses of anyorganisation that affect the business. External analysis of organisation includes PESTLE that ispolitical, economical, social, technological, legal, and environmental that helps to defines theorganisation growth. It helps to identify potential risk that influence the business operation andorganisation (Wheelen and et. al., 2017).Political:Political environment factor can affect a business organisation in any wayssuch as bureaucracy, tariffs, trade control, anti trust law, discrimination law, regulation andderegulation, competition regulation, environmental law, tax policies, data protection law,government stability and related changes, import restriction on quality and quality of product andlaws related to environment pollution. For instance, L’Oréal is a beauty care and personal carecompany has facing political issues such as changes in tax policies. If tax rates will be change orincrease then L’Oréal company would have to purchase raw material at higher cost and it willimpact on its business strategy because company has to spend more money to purchase rawmaterial and thus profits of the company would be decrease. (Wheelen, 2017).
Economical:Economical factors are the set of fundamental information that impact oninvestment value and a business. It includes interest rates, exchange rate, GDP rates, foreigndirect investment, taxes, inflation rates, demand and supply, recession, etc. These factors arerelated with goods and services and value of money. For example, if government increaseinterest rate on borrowing funds then it will influence the L’Oréal business strategy becausecompany has to pay more interest amount at loan and profits of the company will be reduce.Manager of the company has to face this issue because strategy of the company relies on takingout big amount of loan (Spender, 2014).Social: Social factor means experience and facts that influence on individual behaviour'slifestyle, attitudes, personality and religion. It includes education level, safety and security,health consciousness, sex distribution, religion and beliefs, education level, buying habits anddisposable income level. It impact on business strategy such as, if there are any changes occursin the lifestyle and fashion of customer then manager of L’Oréal company need to understand thedemand and expectations of customer that helps to provide that kind of product and services andcompany has to pay more attention or more money to get changes in people's fashions. It willdirectly impact on business strategy and profits of the company as a result profits would bedecrease (Pretorius and Maritz, 2011).Technological:Technological factors are the changeable or variable factor that is usedfor evaluating available alternatives or resources. It includes 3D technology, availability ofcomputers, engine efficiency, internet connectivity, automation, wireless charging and security incryptography that affect the business decision and its strategy. Such as if any new technologycomes in market it directly affects the business in order to adopt new technology. For instance,mangers of L’Oréal company wants to improve their product and services due to which theyneed to adopt new technology and experienced employees who helps to increase production andimproving product and services by using new technology. For adopting new technology L’Oréalcompany need to more finance and other resources that would be expensive for company and itmay be difficult for employees to adopt the new technology.Legal:Legal factors are the external factor that states how laws affect the businessoperations and customer behaviour. It includes consumer protection law, copyright law,employment law, import and export law, discrimination act and minimum wages act. Thesefactor affect the L’Oréal business strategy such as manager of the company need to follow the
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