Assignment on Business Strategy : L'Oréal

Business Strategy

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1............................................................................................................................................4
P1 Applying appropriate frameworks analyse impact and influence of macro environment on
a given organisation and its strategies.........................................................................................4
TASK 2 ...........................................................................................................................................7
P2 Analyse internal environment and capabilities of a given organisation using appropriate
framework...................................................................................................................................7
TASK 3............................................................................................................................................9
P3 Applying porter's five force model evaluate competitive forces to given market sector for
an organisation............................................................................................................................9
TASK 4..........................................................................................................................................10
P4 Applying a range of theories, concepts and models, interpret and devise strategic planning
for given organisation...............................................................................................................10
CONCLUSION..............................................................................................................................11
REFERENCES..............................................................................................................................12

INTRODUCTION
Business strategy is an strategic management tool used for formulation and
implementation to achieve major goals and objectives. In strategic plan can be succeed when it
leads towards growth, positioned for competitors and by strong financial performance in respect
of specified organisation. Business strategy is chain of activities for taking set of decisions that
enables to an organisation in achieving specific objectives. It is kind of master plan that used by
management to competitive advantage and secure actions with satisfying consumer demand. This
report is based on L'Oréal which is an French personal care company. It is world’s largest
cosmetic based company. This report is based on impact and influence of micro environment on
organisation. It also elaborates internal environment and capabilities with competitors’ analysis
with help of porter five force model. Further it explains various strategies and methods that helps
in taking strategic decisions in context of firm.
TASK 1
P1 Applying appropriate frameworks analyse impact and influence of macro environment on a
given organisation and its strategies.
Macro environment is a condition that exist as a whole economy rather than for particular
region. It affects business slowly but impacts in deep so to resist from these factors with help of
PESTEL analysis an organisation can reduce its effect at maximum level (Bharadwaj, and et.al.,
2013). External and internal analysis plays crucial role in making appropriate strategy by giving
important insights. This report is based on L’Oréal which is an international brand of cosmetics
and to make strong strategy need of evaluation of various factors that are as follows:
PESTEL analysis of L'Oréal:
Pestle is a micro environment tool which helps in accessing environment and its different
factors that influence its proceedings. organisation deals in cosmetics in which it specialised in
hair and skin care products.
Political factors:
In political factors consist of different rules and regulations according to countries where
L'Oréal operates at that time. As it presents in 130 countries on five continents. Its manufacturing
is in Paris so policies of France affects it so much (Blackburn, Hart and Wainwright, 2013). It
deals in different regions which play crucial role in its success so according to them they have to

modified in their policies. In political challenge that faced by it is different government
leadership styles while operate in different nations. In past if faces decline due to dermatology
branch due to new legislation in drugs. European union majorly focus on use of some specific
drugs for cosmetic industry such as Phthalates. These regulations oblige to them to produce safe
products for consumers that not impacts harm effects. It has to follow advertising standards in
which ads should not be misleading and ex aggregated.
Positive:
Political factor work as a strength when L'Oréal according to different nations adopt
various strategies and policies. Such as in firm manufacturing unit established in Paris so for
smooth functioning it follows rules and regulations in return government also corporate to
L'Oréal by giving reductions. Opportunities for an organisation impacts in positive manner on
organisational strategies when government helps in functioning.
Negative:
L'Oréal operates in many nations so to accord with different rules and regulations adopt
changes according to situation sometimes create dissatisfaction in employees and incurs huge
cost (Chang, 2016). Threats impacts negative on organisational strategies for that they have to
cut cost in other important matters.
All these factors have both positive and negative impacts that majorly impacts on works and
proceedings of an organisation in better manner.
Social factors:
In social factors consist of technical trends of society, in today world modern society
majorly focus on trends and changing preference. In social trends organisation have to use such
ingredients that are not hurt emotions of particular society (Goffee and Scase, 2015.). L'Oréal in
past days’ faces problem that hurts emotions of people by using some ingredients. For example,
it has to modify in their products according to changing education level of consumers so they
have to smart products to satisfy consumer base.
Positive:
Social factor helps in giving best products according to consumer choice and preferences
and it enhances loyalty of consumers towards organisation. For example, while it launches a
shampoo in India it found that in that region people prefers sachet size shampoos so it modify
their products and in both form it available in market.