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Business Strategy of L'oreal

   

Added on  2020-10-05

16 Pages4532 Words162 Views
BUSINESSSTRATEGY

Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3P1 Impact and influence of macro environment.........................................................................3M1 Critically analyse macro environment to determine and inform strategic managementdecisions......................................................................................................................................5TASK 2............................................................................................................................................5P2 Internal environment and capabilities using appropriate framework....................................5M2 Critically evaluate internal environment to assess strengths and weaknesses oforganisation's internal capabilities, structure and skill set..........................................................7TASK 3............................................................................................................................................7P3 Porter's five force model........................................................................................................7M3 Appropriate strategies to improve competitive edge and market position based onoutcomes.....................................................................................................................................8TASK 4............................................................................................................................................9P4 Apply theories, concepts, model, interpret and devise strategic planning.............................9M4 Strategic Management plan that has tangible and tactical strategic priorities and objectives...................................................................................................................................................10D1 Critique and interpret information and data applying environmental and competitiveanalysis to produce a set of valid strategic directions, objectives and tactical decisions..........11CONCLUSION..............................................................................................................................12REFERENCES..............................................................................................................................13

INTRODUCTIONBusiness strategy is regarded as high level plan in order to reach particular objectives oforganisation. It is very important for firm to make proper plans and strategies in order to runoperation and activities successfully (Acquaah, M., 2013). The strategy should cover each andevery aspect for success of organisation. The given assignment is based on L’Oreal which wasfounded in 1909 at France. It is personal care cosmetic which provides variants of products suchas hair colour, make up, perfume, sun protection, hair care, men’s skincare. In this report, there isdiscussion about PESTLE, SWOT analysis of L’Oreal along with its capabilities. Porter’s fiveforces have been discussed and strategies adopted by firm are clearly mentioned in report.According to chosen strategy, objectives and tactics should be made.TASK 1P1 Impact and influence of macro environmentIn order to run business in competitive market, it is very important to analyse theirexternal and internal factors. These factors help in growth and sustainability of organisation. ThePESTLE analysis of L’Oreal are discussed below:PESTLE AnalysisIt is called PESTLE or PESTEL tool designed for analysis and monitor of macroenvironmental factors which has impact on performance of organisation (Alsudiri, Al-Karaghouli and Eldabi, 2013). Such framework is mainly used when firm is enteringinternational market or starting new business.PESTLE analyses of L’Oreal are as given below:Political Factors- It includes policies and rules of government where L’Oreal has beenworking. The factors include trade policy, government rules and regulation and others. It isFrance company so all government policies affect its manufacturing. Opportunities- France have import policies which plays vital role in success of firm.Threats- If L’Oreal does not follow all legal regulation for manufacturing then it has topay fine and penalty.Economic Factors- It means performance of economy that impact company. It includesforeign exchange rate, growth, interest rates, inflation. GDP and purchasing power of Francepeople is more as they prefer branded products like L’Oreal.

Opportunities- It has an opportunity to expand its market in different parts of worldwhich helps in maximizing its share and profits.Threats- When value of dollars decline, profits of L’Oreal also decrease as purchasingpower of consumer is low.Social Factors- The social environment factors of market such as cultural trends,population, gender, age. Nowadays, people prefer high branded and quality cosmetic productsfor their skin. As L’Oreal produces high quality products for their consumer.Opportunities- L’Oreal has an opportunity to use latest technology for manufacturingproducts for their consumers. This leads to increase in profit as consumer want latest andinnovative products (Amran and et. al., 2016).Threats- If L’Oreal is stick to same product and technology then it cannot survive inmarket as consumer taste and preferences changes frequently which is threat fororganisation.Technology Factors- The factors which affect operations of firm with innovations intechnology that includes automation, research and development and others. This play great rolein innovation and creating trust among consumers. L’Oreal is the first company which hasmanufactured ageing cream and it follows contemporary trends. Opportunities- The technology provide opportunity to spread innovation in their productsfor fulfilment of needs and demand of consumers.Threats- If competitors of L’Oreal are using more new and innovative technology, then itshould update their own technology otherwise they cannot survive in market.Legal Factors- These factors includes safety standards, labour laws, consumer laws andothers. L’Oreal needs to follow all legalities of their region to get success. It needs to follow alllegal standards for manufacturing goods and services.Opportunities- By following all legal standard and laws, L’Oreal can earn maximumprofits and sustain in market. It has also an opportunity to produce organic products fortheir consumers (Burlton, 2015).Threats- If legal laws are not followed while manufacturing products then it cannotsustain in market. The consumer views all legal standards while purchasing products.Environmental Factors- When there is influence of surrounding environment on firmthen it is environmental factors. It includes weather, climatic, geographical locations and others.

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