Business Strategy Assignment Solved - L’Oreal

Business Strategy

Table of Contents
INTRODUCTION........................................................................................................... 3
TASK 1........................................................................................................................ 3
P1 Impact and influence of macro environment on L’Oreal........................................3
TASK 2........................................................................................................................ 6
P2 Analysis of internal environment and capabilities of L’Oreal.................................6
TASK 3........................................................................................................................ 9
P3 Evaluation of competitive forces of L’Oreal.......................................................9
TASK 4...................................................................................................................... 10
P4 Apply theories, concepts and models to devise strategic planning for L’Oreal.
............................................................................................................................. 10
CONCLUSION............................................................................................................ 13
REFERENCES............................................................................................................. 14

INTRODUCTION
Business strategy refers to set of action which formulates guidelines for entrepreneurs by
which business objectives can be attained. It is basically a master plan by which organization
attains a competitive position within market, to carry out their activities and attract their
customers by which they can acquire organizational goals (Agyapong and Boamah, 2013). In
this report L’Oreal is considered to understand concept of business strategy. L’Oreal is a group
of French company which is headquartered in Clichy Hauts-de-Seine. It is one of the largest
cosmetics organizations. They provide products for skin care, make-up, hair color and perfumes.
This report includes impact of macro environment and internal environment. Porter’s five forces
model is applied to identify competitive forces of market. At last, theories are applied by which
they can formulate strategic planning.
TASK 1
P1 Impact and influence of macro environment on L’Oreal.
L’Oreal is one of the world’s leading beauty and cosmetics organization. To meet
requirements of global fashion trends, they are providing different products. This organization is
based on production of skin, hair products, perfumes and pharmaceutical stuff. They provide
their services in around 130 countries. Some factors have significant impact on organization and
with passage of time these factors have direct impact on marketing strategies of organization. To
analyze impact of these factors, L’Oreal has opted to use PESTLE analysis. It will help them to
identify major factors which can aid them furnish their services more smoothly both in present
time and in future. PESTLE analysis of L’Oreal is presented below:

(Source: PESTLE Analysis, 2018)
Political factors: The major political challenge that L’Oreal must obey rules of various
governments’ leadership styles of countries in which they are rendering their services. They are
obliged to produce safe products which do not have any kind of harmful substances contained
within (Brewster, 2017). Furthermore, L’Oreal needs to adhere to advertising rules which are
formulated by Advertising Standards Authority. An example can be considered to understand
this; advertisements must not mislead that over-exaggerating function of any specific product.
Economic factors: Cosmetics industry comes at third place which comprises of around 14%
market share. When employment in this sector is taken into consideration then around one
million of people are employed which also includes massage therapists, skin care specialist,
manicurists, barbers and hairdressers. L’Oreal’s customer products are categorized to highly
sensitive economies of scope and scale. They needs to adapt various economic problems and
environment in which they are operating (Burlton, 2010). L’Oreal was affected continuously
when price of dollar and other currencies weaken. Countries with high Human Development
Illustration 1: Pestle Analysis