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Business Strategy Assignment - L’Oréal organisation

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Added on  2020-10-22

Business Strategy Assignment - L’Oréal organisation

   Added on 2020-10-22

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Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3a) PESTLE and SWOT analysis of organisation and capabilities..........................................3b) Competitive environment of organisation using Porter's Five Force Models....................8TASK 2..........................................................................................................................................10a) Different types of strategic directions available to organisation......................................10b) Justification and recommendation of appropriate growth platform and strategies..........11c) Produce strategic management plan with strategies, objectives and tactics.....................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................15
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INTRODUCTIONBusiness strategy is defined as course of action or set decisions that helps entrepreneursin achieving goals and objectives of enterprise and also known as long term planning whichconsists of 3-5 years time period (Acquaah, 2013). It is regarded as master plan whichmanagement use for securing competitive position in market, pleasing customers, carrying outoperations and achieving desired entity ends. In business context, strategy is regarded as longterm plan, destination and direction of organisation. This strategies are carefully planned anddesigned flexibly with purpose of mobilising resources, meeting challenges, securingadvantageous position, achieving effectiveness and others. The given report is based on L’Oréalwhich was founded in 1909 at Paris. It is world largest cosmetics organisation and concentratingon skin care, make-up, hair colour, sun protection, perfume, men's skincare. This assignmentcovers PESTLE, SWOT and capabilities of organisation along with competitive environmentusing Porter's five force model. It also highlights evaluation of different types of strategicdirections for enterprise and giving justification and recommendation for growth. The strategicmanagement plan is prepared which represent objectives, strategies and tactics. TASK 1a) PESTLE and SWOT analysis of organisation and capabilitiesMacro environment are those which have uncontrollable and external factors thatinfluence decision making of organisation and affecting performance and strategies (Alsudiri,Al-Karaghouli and Eldabi, 2013). It includes inflation, employment, gross domestic product,competitors. Micro environment is controllable and internal factors which does not affectcompany in decision making. It includes customers, suppliers, government, public and others.The deputy manager need to analyse both internal and external market for better decisionmaking. Here, PESTLE and SWOT analysis has been covered under macro and microenvironment which are described below:PESTLE AnalysisA PESTLE or PESTEL analysis is tool which is used by organisation for analysing andmonitoring macro environmental factors that impact performance of business. Such tool is usedwhen new enterprise is starting or entering into foreign market. The PESTLE analysis of L’Oréalis described below:
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Political- It includes factors such as regulations, rules and policies of government whereL’Oréal is working its business and activities. This includes government policy, politicalstability, trade restrictions, labour law, trade (Bharadwaj and et. al., 2013). L’Oréal should followall different government rules and regulation while manufacturing products. It need to takeapproval regarding manufacturing any products of Procedures for working with otherprofessionalsbeauty care.Opportunities- L’Oréal can increase their goodwill and value in market by following allset standard while manufacturing goods and services. This leads to increase in profits andsustainability. Threats- In case of violation of producing safe cosmetic products for consumer,government charge fine and penalty. When there is amendment in policies and regulationwhich should be adopted by organisation that leads to increase in cost. Economic- Economic factors determined economys performance of country and theirbusiness. This factors includes inflation rates, disposable incomes, exchange rates, economicgrowth (Blackburn, Hart and Wainwright, 2013). This have directly or indirectly long termimpact on enterprise and effect purchasing power of consumers.Due to increase in value ofmoney, L’Oréal has earned maximum profits and sustainability. With the growth of economic,and increment in salary of consumer their purchasing power also rise which leads to growth ofbusiness.Opportunities- With rise in income, purchasing power of consumer increases that leadsto rise in profits of L’Oréal which is big opportunity (British Overseas PurchasingPower Index: Outlook for Summer 2018 and Winter 2018, 2019). It is first companywhich manufacture ageing cream for people so consumer purchase it more which helps inprofit increment. Threats- L’Oréal has to face threat when value of dollars and currencies decline inmarket as purchasing power declines.Social- It is defined as characteristic dimensions such as customs, norms, value, of peoplewithin operation of organisation. It includes age, population growth rate, safety, income ofpeople and their attitudes towards products. L’Oréal need to do innovation in their products aspeople want new and latest goods. Lifestyle of people affect on need and demand and they preferhybrid technology for products for buying which can save time and cost.
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