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Business Strategy Loreal

   

Added on  2020-10-05

18 Pages5647 Words151 Views
Business Strategy

Table of ContentsINTRODUCTION...........................................................................................................................3LO1..................................................................................................................................................3Analyze the impact and influence which the macro environment has on an organization..............3LO2..................................................................................................................................................7Assess an organization’s internal environment and capabilities............................................7LO3..................................................................................................................................................9Prepare analysis of the competitive environment of the organisation using Porter’s FiveForces Model..........................................................................................................................9LO4................................................................................................................................................13Apply models, theories and concepts to assist with the understanding and interpretation ofstrategic directions available to an organization..................................................................13REFERENCES .............................................................................................................................17.......................................................................................................................................................18

INTRODUCTIONBusiness Strategy is concerned with developing and making high level plans in order tomeet business objectives. It is very necessary for the organisations to develop proper strategy soas to attain business objectives. It develops an idea through which business activities can beperformed effectively. Chosen company under the report is Loreal (Acquaah, 2013). It is aFrench company specialises in cosmetics and personal care products and is categorised as one ofthe largest brand name in personal care. The project will focus on the influence of micro andmacro environmental factors on the company as well as focuses on analysis competitive marketwith the help of Porters five forces model and evaluates various strategies so that businessactivities are performed in correct directions and assist in achieving organisational goals.LO1Analyze the impact and influence which the macro environment has on an organization.Macro environment consist of all the business environment factors that are uncontrollableand greatly influence organisations performance, strategies and decision making. Here deputystrategy manager at Loreal analyses the external and internal business environment for takingappropriate business decisions.PESTLE Analysis It is a framework which carefully monitors the external environment factors which hasimpact upon the organisation. It includes the following details which are as follows- Political- It includes the various laws, policies and the taxation rate, foreign trade andtaxation rate imposed by the government which affects functioning of Loreal. As thecompany has its manufacturing in Paris rules and regulations of France will affect thefunctioning of the company. As the government over there focuses on proper productquality, in such case Loreal needs to provide information to the government regardingthe raw materials used in manufacturing products. This factor impacts strategic planningas the rules and regulations of the country differs from each other (AlsudiriAl-Karaghouli,and Eldabi, 2013). Company can majorly benefit during the recession period.Economic- This factor includes interest rate, inflation rate, foreign exchange rate whichimpacts functioning of business. During recession period it majorly benefits business bya a way of enhancement of profits. Therefore prices of the Loreal products vary from

state to state because of the changes in the tax rate. States which is having high humandevelopment index contributes in the development of Loreal products. All this factorsaffects strategic plan of the company. Fall in the value of currencies and dollars greatlyimpacts the sale of Loreal products which is a major threat to the company therefore withincrease in the economic growth of the company, purchasing power of the customerincreases which is opportunity for Loreal to increase its sales. Social- It includes values, attitudes, beliefs of the customer towards the Loreal products.Customers demand increases because of the wide variety of innovative productsavailable in market. Loreal should innovate its products according to needs and desiresof customers and therefore should grab this opportunity by attracting large number ofcustomers and increasing sales. But if the Loreal doesn't focuses on the quality of theproducts and therefore doesn't adopt to latest technology it would be a major threat forthe company to attract large number of customers (Bharadwaj and et. al., 2013). Technological- With the widespread of globalisation and use of internet it has led to theadvancements in technology regarding the production and distribution of goods. Lorealshould adopt to recent technology so as to provide innovative products and garbs theopportunity of attracting larger customer base. Because of the high cost if the Lorealdoesn't upgrades to recent technology it would be a threat for the company to maintainsustainability in market for long period of time.Environmental- This factor is concerned with proper utilisation of resources andcarrying business in such a way that doesn't harms the environment in any manner.Customers are also demanding eco friendly products so that environment can remainbeautiful and pollution free. In context to this there is wider opportunities for the Lorealto provide eco friendly products to the customer which can decrease production cost andtargets more customers towards the product. Threat which the Loreal can face is thecompetition from the various companies which have started producing eco friendlyproducts and are attracting customers. Legal- It consist of the various laws, rules and regulation which the respective companyhas to comply with to remain competitive and profitable in the market. In context tocosmetics company there are laws ensuring safety of the consumers and thereforedetermines proper advertising and labelling of product safety and usage. By carrying

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