Business Strategy: PESTLE, SWOT Analysis, and Growth Strategies of L'Oreal

Business Strategy

INTRODUCTION
Business strategy is regarded as high level plan in order to reach
particular objectives of organisation. It is very important for firm to make
proper plans and strategies in order to run operation and activities successfully.
The strategy should cover each and every aspect for success of organisation.
The given assignment is based on L’Oreal which was founded in 1909 at
France. It is personal care cosmetic which provides variants of products such as
hair colour, make up, perfume, sun protection, hair care, men’s skincare. In this
report, there is discussion about PESTLE, SWOT analysis of L’Oreal along
with its capabilities. Porter’s five forces have been discussed and strategies
adopted by firm are clearly mentioned in report. According to chosen strategy,
objectives and tactics should be made.
TASK 1
a) PESTLE and SWOT analysis along with capabilities
In order to run business in competitive market, it is very important to
analyse their external and internal factors. These factors help in growth and
sustainability of organisation. The PESTLE and SWOT analysis of L’Oreal are
discussed below:
PESTLE Analysis
It is called PESTLE or PESTEL tool designed for analysis and monitor of
macro environmental factors which has impact on performance of organisation.
Such framework is mainly used when firm is entering international market or
starting new business. PESTLE analyses of L’Oreal are as given below:
Political Factors- It includes policies and rules of government where
L’Oreal has been working. The factors include trade policy, government rules
and regulation and others. It is France company so all government policies
affect its manufacturing.
 Opportunities- France have import policies which plays vital role in
success of firm.
 Threats- If L’Oreal does not follow all legal regulation for manufacturing
then it has to pay fine and penalty.
Economic Factors- It means performance of economy that impact company.
It includes foreign exchange rate, growth, interest rates, inflation. GDP and

purchasing power of France people is more as they prefer branded products like
L’Oreal.
 Opportunities- It has an opportunity to expand its market in different
parts of world which helps in maximizing its share and profits.
 Threats- When value of dollars decline, profits of L’Oreal also decrease
as purchasing power of consumer is low.
Social Factors- The social environment factors of market such as cultural
trends, population, gender, age. Nowadays, people prefer high branded and
quality cosmetic products for their skin. As L’Oreal produces high quality
products for their consumer.
 Opportunities- L’Oreal has an opportunity to use latest technology for
manufacturing products for their consumers. This leads to increase in
profit as consumer want latest and innovative products.
 Threats- If L’Oreal is stick to same product and technology then it cannot
survive in market as consumer taste and preferences changes frequently
which is threat for organisation.
Technology Factors- The factors which affect operations of firm with
innovations in technology that includes automation, research and development
and others. This play great role in innovation and creating trust among
consumers. L’Oreal is the first company which has manufactured ageing cream
and it follows contemporary trends.
 Opportunities- The technology provide opportunity to spread innovation
in their products for fulfilment of needs and demand of consumers.
 Threats- If competitors of L’Oreal are using more new and innovative
technology, then it should update their own technology otherwise they
cannot survive in market.
Legal Factors- These factors includes safety standards, labour laws,
consumer laws and others. L’Oreal needs to follow all legalities of their region
to get success. It needs to follow all legal standards for manufacturing goods
and services.
 Opportunities- By following all legal standard and laws, L’Oreal can
earn maximum profits and sustain in market. It has also an opportunity to
produce organic products for their consumers.