Business Strategy Analysis of L'oreal
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Added on 2020-10-05
Business Strategy Analysis of L'oreal
Added on 2020-10-05
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BUSINESS STRATEGY
TABLE OF CONTENTSINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3Situational analysis ....................................................................................................................3Analysis of internal and weaknesses of company.......................................................................6Analysis of company's capabilities.............................................................................................7Competitiveness of market..........................................................................................................8TASK 2 .........................................................................................................................................10Different strategic directions.....................................................................................................10Justifications and Recommendations related to growth strategies............................................12A business strategy plan............................................................................................................12CONCLUSION..............................................................................................................................13REFERENCES..............................................................................................................................15
INTRODUCTIONA business strategy can be described as set of actions or decisions which helps anorganisation in attaining its specific objectives and goals. In simpler words, strategy is actionplan which entails how company is going to conduct its operations for achieving itspredetermined goals, meet the requirements and expectations of its customers and sustain acompetitive edge in the market place (Thürer and et.al., 2018.). The present report is going todiscuss about L'oreal, a French global company dealing in personal care products. It was foundedin 1909 and is headquartered in Clinchy, France. It's a world's largest cosmetic company. Thereport will cover impact of macro environmental factors on organisation, an analysis of internalstrengths, capabilities and weaknesses. Further, analysis of competitiveness of market will bedone that could influence the strategies of company and lastly a business strategic plan will beprepared.LO 1 Situational analysis Being a global organization, L'oreal operates in a very complex and dynamic businessenvironment. It has to very thoroughly analyse its internal and external environment beforeformulating any business strategy (Chang, 2016). This is because a strategy based on currentmarket trends and situations would be more effective for coping with the challenges which inturn would it help in achieving its goals very efficiently. Below is the external analysis of L'orealby the way of PESTLE analysis:
Illustration 1: PESTLE analysis(Source : What is PESTLE Analysis? - Definition & Examples, 2019)Political factors : Since the company operates in different number of countries, politicalconditions and relations of host country's government with other countries is an important factorthat largely impacts the strategic decisions of L'oreal. For example, BREXIT, a political eventwill impact the trading with UK. The French company might face different trade laws followingthe Brexit as UK will be free to form its own trade laws and regulations other EU guidelines. Itwill have direct impact on organisation's business in England and Wales which is one of itsmajor international market. Entity will have to now formulate its international business strategiesaccordingly. Economic factors : There are numerous economic factors that have the capability ofaffecting company's business positively or adversely. For a multinational company, exchangerates in different nations have significant impact on its revenues. Other factors are GDP ofvarious nations, recession period, inflation in host country, per capita of income of individuals inits operating nations affects the sales and sustainability in the global market. For example, in thedeveloping economies people might not have enough money to spend on luxurious skin care
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