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Business Strategy of an organisation

   

Added on  2020-10-04

15 Pages5206 Words156 Views
Business Strategy

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................11.impact of external and internal factors on organisation and organisational capabilities.........12. Porter's five forces model........................................................................................................5TASK 2:...........................................................................................................................................53.Evaluation of different types of strategic directions available to the organisation..................54.Justification and recommendation for the most appropriate growth strategy for theorganisation.................................................................................................................................75.Strategic management plan with strategies, objectives and tactics..........................................8Conclusion.....................................................................................................................................10REFERENCES..............................................................................................................................11

INTRODUCTIONBusiness strategy is the organisations plan to achieve their objective. The strategyformulated by the organisation so that they can direct their activities towards the objectives andgoals of the organisation. Through a particular strategy organisation is able to achieve strongcompetitive position, improves coordination in the organisation and leads to integration of all theactivities towards one path.L'Oréal is the personal care company headquartered in Paris. It is the world's largestcompany of cosmetics and has developed the products in the field of hair colour, skin care, sunprotection, perfumes, make-up, hair care etc.In this report, the study is base on the internal and external factors which affect the organisationand their capabilities. The other factors are also explained through porter's 5 model whichinfluence the organisation. Also in addition to this different types of strategic directions are alsoexplained through which company can develop the greater share in the market and can growtheir business. Strategic management plan is specified for the organisation which help them tonachieve their objectives and goals in and efficient manner.TASK 11.impact of external and internal factors on organisation and organisational capabilities L'Oréal is the leading organisation in range of cosmetics products across the world. It producesa wide range of beauty products to meet the needs of global trends (Akter, and et.al., 2016). Thereare several macro factors that affects and influence the strategies of the business so it is veryessential to analyse these factors carefully.External factors(PESTLE analysis)Political factors- these factors states the government rules and regulations under whichthe company is working. As it is operating worldwide so it need to take care of all the country'sgovernment policies that leads to complex procedure and the production company of L'oreal isestablished in Paris so the policies of the government of France influence the functioning ofcompany. On the other hand different import policies of different regions plays an important rolein the growing success of the industry (Olson, and et.al., 2018). With the inclusion ofglobalisation, these factors have showed a positive impact on the organisation.Economic factors- Exchange rates and the different prices of the product in differentcountries reflects an economic factors that the industry faces across the globe. Exchange rates1

makes the trading more difficult as convertibility of the currency is involved and influence theprofit of the company, low exchange rates reduces the profit and the strong currency rateincreases the profit.The price of the L'oreal product varies with country to country like at few places, the marketprice of skincare range is very high and can make a good business from those regions thatenables the economic development of the country as the gross domestic product of that state willget contributed indirectly (Higgins, and et.al., 2015). Favourable economy and the high income ofthe people will let to increase the demand of the branded beauty products which will be apositive sign to the sales, profitability and growth of the company.Social factors- under these factors the values, technical trends and the beliefs of thesociety are considered and address. The evolving lifestyle and the high standard of living of thepeople leads to a high interest in the beauty and fashionable products that will positivelyinfluence the market share and the marketing strategies of the L'oreal industry. On the other sideit faces some ethical issues relating to the ingredients used in the products as people arebecoming more sensitive to luxury and quality products so some people may consider it as achemical use while some may not so it negatively affects the business of the industry.Technological factors- It reflects the technological advancements and innovations thatplays a great role in enhancing and development of the business (Ansoff, and et.al.,2019). It bringssome innovation in its product range by addressing the coming problems of the people in thesociety like it has innovated the professional range shampoos and cosmetics that helps in thenourishment and smoothing which resulted positive outcomes for the L'oreal in creating a brandimage. Setting different equipments for operations builds complexities for the workers and thecompany has to bear the training and development cost of the employees at the workplace thatincurs the high cost and reduce the profits of the company.Legal factors- legal factors includes the laws and legislations that L'oreal industry needsto follow to maintain the success graph. Some legislations like the federal food, drug andcosmetic act and the fair packaging labelling act so that not any controversial issues and criticismare to be faced and due to that it can work in a favourable work environment (Petrovic, and Kalata,2019). Different countries has different laws and legalities so it reflects a negative sign for theindustry as becomes complex and difficult for the company to follow all the laws. 2

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