Introduction of Business Strategy
Added on 2020-10-22
11 Pages3931 Words253 Views
BUSINESSSTRATEGY
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1 ...........................................................................................................................................3PESTLE and SWOT analysis for organization's capabilities.....................................................3Porter's Five Forces Model for competitive analysis..................................................................7TASK 2............................................................................................................................................8Different types of strategic directions available to organisation with justification andrecommendation of growth strategies and platforms..................................................................8Strategic management plan for L`oreal.......................................................................................9CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONBusiness strategy refers to the set of actions as well as decisions taken by a company withan aim to achieve organisational goals and objectives. Such course of action is largely focussedat gaining the attention of a large base of customers. Also, it assists in getting a competitive edgeover rivals and strengthening the existing performance of business in order to ensure its longterm sustainability in marketplace (Brewster, 2017). The mission, objectives, vision and goals ofan entity serve as the foundation on the basis of which a strategy is devised by top managementof an organisation. The present report is based upon L`oreal which is a multinational brandengaged in manufacturing as well as distribution of cosmetics and personal care products toserve the needs of people globally. It comprises of PESTLE and SWOT analysis to gain aninsight into organisational capabilities. Also, Porter Five Force analysis is done to getinformation about firm's competitive environment. Evaluation of different types of strategicdirections available to company along with recommendations for growth strategies are provided.TASK 1 PESTLE and SWOT analysis for organization's capabilitiesStrategic planning is defined as the process of ascertaining as well as declaring the futureplanning of an organisation which is a prerequisite for achievement of long terms goals andobjectives of enterprise. This procedure consists of a set of actions which are imperative for abusiness to make sure that the overall functioning as well as operations of company is alignedwith their vision and goals and objectives (Jeston, 2014). It can be said to be a 3-5 years longplan made with the sole aim of increasing the goodwill as well as stake of company withinmarket. Also, it assists in ensuring the sustainability of company in market for a long period oftime. Strategic planning tends to provide a direction to leaders so as to make them capable oftaking such decisions which affect the operations and functioning of entity at large scale. Suchdecisions can be associated with employees, utilisation of resources, operations, processes, tools,techniques and stakeholders. In all, strategic planning assists the entity in making sure thatactivities are conducted across the organisational premises as per the formulated strategy.L`oreal is one of the top multinational brands which is engaged in product categoriessuch as skin care, make-up, hair care, sun protection, perfume, hair colour etc. Being a globalbrand having various outlets situated across the world, it is immensely necessary for this
enterprise to carry out strategic planning so as to become a leader in cosmetics and personal careindustry by continuing to provide high quality products to people spread throughout the globe. Intoday's modern world where brand rivalry is on rise, it is essential for L`oreal to gain an insightinto the internal as well as external environment of business. A number of companies areincreasingly gaining entry into the cosmetic and personal care range industry situated within UKwhich enhances the element of risk for L`oreal. Thus, this organisation keeps in consideration theinternal and external environmental factors which impact upon the operations of this businessentity in long run.PESTLE AnalysisIt is a strategic analytical tool used by an entity to gain in-depth knowledge of externalbusiness environment. The top management of L`oreal is conducting PESTLE analysis todetermine the external capabilities of business, as described beneath:-Political Factors: This examines the magnitude of government intervention in thefunctioning as well as operations of business taking into account the acts passed by law. In thiscontext, UK government is highly stable which indicates that the rules and laws passed by themfor cosmetics and personal care industry remain consistent from year to year. L`oreal is a topbrand which recognises the importance of adhering to political legislations in order to avoid anyfines or punishments being levied upon them. The products provided by L`oreal across the globedoes not comprise of any harmful or dangerous constituents which can affect health or skin ofpeople. Further, animal testing of products is banned within UK which may create hurdles forcompany (Chang, 2016). L`oreal is capable of complying with all the laws and legislationspassed by UK government and not getting indulged in illegal activities so as to avoid prosecutionor penalty.Economic Factors: An entity functioning as a part of a country's economy is posed tovarious economic factors such as inflation, interest rate, currency rates etc. In the present context,the UK economy is affected by the large scale outcomes of Brexit in terms of currencyfluctuations. In addition to this, inflation has also substantially risen within the countryconsequently implying an increase in manufacturing and distribution costs. Within UK, the GDPof cosmetic sector has witnessed significant growth over a period of last some years which isfruitful for L`oreal. This company is capable of coming up with more products within cosmeticsand personal care range so as to get an edge over competitors.
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