Business Strategy Assignment : L’Oréal

Added on - 04 Oct 2020

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INTRODUCTIONBusiness strategy refers to the working plan of company for attaining the vision,prioritizing the objectives and also competing in a success manner with business model. It isexplained as high level plan of company for reaching at the specific goals. It is a means throughwhich it set out to attain set objectives (Burgess and Radnor, 2013). This present report is basedon the L’Oréal and it is a lading firm that provides accessories and skin care products. Under thisreport will be discuss about the frameworks for analyse impact as well as influence of macroenvironment on business firm and its strategies.Porter’s Five Forces model will be discuss hereto evaluate competitive forces of market.TASK 1P1 Frameworks analyse the impact and influence of the macro environment on a givenorganisation and its strategiesMacro environment refers to situation that exist in an economy as whole as comparison tospecific industry. It is external environmental factors that more influence on success of business,decision making and strategies. Company can not control the external factors and they developnegative impact on business. L’Oréal is a largest cosmetic firm and it has developed the activitiesin field on skin care, make up, hair colour etc. To analyse the external factors, L’Oréal will usethe PESTLE analysis. It is framework that used to analyse as well as monitor macro environmentfactors which may have affect on performance of an organisation (Cepiku and Bonomi Savignon,2012).The PESTLE analysis mention below:Political factor-United Kingdom is one of most power country in world. Under thisthere is more political stability but Brexit has develop the political debates and uncertainties. Inorder to attain the sustainability at market place, L’Oréal firm follow all rules as well asregulations. This factor can be explained as degree of government intervenes in an economy ofUK. The government of UK, develop a regulations named European Cosmetics Regulations1223/2009, Cosmetic products (safety) regulation 1996.L’Oréal deal in a cosmetic industry so itfollow these regulations in context to stay active in market of UK.Economical factor-These factors consists taxation rate, inflation, deflation, interest rateetc. These factors mainly impact on the buying power of the customers. If the demand of1
consumers will be high then it will help in enhance profit level of firm. In this, major consumerproducts of L’Oréal are categories highly sensitive to the global scale of economies. It isnecessary thatL’Oréal should adopt the various economic environments in a country it operateits business (Cserháti and Szabó, 2014).Social factor-These factors are encompasses technical trends in society. In this presenttime period, people are becoming the conscious regarding product formulations. The people aremore conscious towards their skin care. So,. It is a main benefit for L’Oréal to provide thechemical free and herbal products products to people.Technological factor-UK country is one of more advanced country in world. Thebusiness firms in UK developing the latest technology in order to provide the better solutions forconsumers. The main focus of L’Oréal is on innovation and research to drive the competitivebenefit and also maintain the leadership position. The technological factor develop the positiveimpact on business of L’Oréal in United Kingdom because through this, it spread innovationwith in the seconds and also fashionist are available to buy trendy products.Legal factor- This factors include competitive regulations, health and safety regulations,employment regulations, product regulation, consumer laws and many others. These factors candevelop its impact on business in in several ways such as business operations, cost, demand etc.In addition to this, L’Oréal fulfil all legalities of region under which it working. It is brand ofelites and upper middle class people and this firm is more concerned about legit stuff.Environmental factor-It compasses the different global environment safety relatedlegislations which should be abide through global standards. The government of UnitedKingdom made better improvements in minimizing negative impacts. The L’Oréal plays anecessary role through supporting environmental campaigns and follow related norms (Eason,2014).Ansoff's growth vector matrixIt is strategic planning tool that gives framework to help the executives, marketers andthe senior managers to develop strategies for purpose of future development of business. It is abeneficial tool that L’Oréal company can be used to help business and analyse the risk relatedwith the each kind of strategy. The Ansoff matrix of L’Oréal mention below as above:Market penetration-Under this strategy, firm tries to develop its existing products in theexisting markets. It is helpful in enhance the market share in existing market segments. In2
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