Impact of Macro Environment on L’Oréal and Body Shop

Context of Business

Contents
INTRODUCTION...............................................................................................................................3
TASK....................................................................................................................................................3
Impact macro environment had on the current situation faced by L’Oréal particularly the Social,
and Ethical factors.............................................................................................................................3
Organizational culture at Body Shop and L’Oreal along with benefits or challenges arising out of
the compatibility of culture................................................................................................................5
Factors that L’Oreal would have considered before deciding to acquire Body Shop.........................7
Factors that had affect the L’Oreal acquisition of Body Shop resulting it the failure........................8
Reflection..........................................................................................................................................9
CONCLUSION....................................................................................................................................9
REFERENCES..................................................................................................................................11

INTRODUCTION
In a globalised world every business organization wants to expand their operational activities
with the aim of generating larger profits. While operating at global level, organization is
responsible for analysing all the macro and micro factors that directly affect entire functional
activities. With the assistance of this, company can easily reduce negative effects and at the
same time also maximising the positive impact that may assist in developing positive and
famous brand image (Wang and et. Al., 2016). One of the main advantages of analysing
business environment is to capture opportunities and path to sustain for longer period of time
in market place. In addition of this, the main focus of company at global level is to
established its competitive image by serving best quality of services. By this large number of
consumers get easily attracted and consume its services. This will directly contribute in
enhancing positive brand image by capturing larger market share. Current report is based on
the L’Oréal, is one of the famous cosmetic company that operate their business in over the
with the aim of attain competitive success. This company is also operating their business in
around 130 countries along with over 25 brand and different number of sub brands. Apart
from this, Body shop had also emerged as a famous brand that also includes or support
human rights and environmental care. Company has their own presence in approx. 33
countries along with 2600 brands. L’Oréal made a bid to acquire Body Shop for £652
million. By this company make their strong image in market place and also expand their
business activities. This report is going to discussed about impact of macro environment on
company in terms of Social and ethical factors. Along with this, organizational culture of
business organization along with its benefits and challenges is also mentioned in this project.
Furthermore, factors that L’Oréal would be considered before deciding to acquire Body also
discussed here.
TASK
Impact macro environment had on the current situation faced by L’Oréal particularly the
Social, and Ethical factors
Macro business environment play a significant role in company as it consist various factors
that direct affect company in both positive and negative manner. Thus, it is important for
business organization to analysis the same that support in reducing the negative impact and at
the time also improve its positive performance at market place. In context of this, L’Oreal is
one of the famous organizations that operate their business in over the world with the hope of
generating larger profitability and success. Mainly, overall performance of company is highly

depend on the changes in external environment as it put huge impact over the company and
its brand image as well (Mutanga, A., 2015). As there are various factors of macro
environment like political, economic, social, technological, legal and environmental. But in
this, social and ethical factors put their huge impact over the company and its overall
performance as well. This can be understood by following points:
Social factor: it is considered as an important aspect of macro environment that direct affect
the company and its functional activities as well. Mainly it is related wit this customers taste,
their lifestyle, change in taste and demand and many more. All these directly change the
L’Oreal performance and its offerings as well. In market place, new trends and change in
market is affect the customers and their mind set towards the company and its offerings
(Cheng, Yang and Sheu, 2014). In addition of this social factor impact the development of the
guiding principle in the public arena; characterize connections in ideas, for example, chance,
individual flexibility, achievement, independence, and so forth well as social elements decide
huge contrasts in the conduct of purchasers living in various nations. Customer conduct is
constantly affected by social variables, the majority of which are societal position, reference
gatherings, family, social jobs and status. Right now, enormous pretended by publicizing
L'Oreal, which creates constructive feelings including well known individuals: entertainer,
artists, models, TV moderators - world stars. L'Oreal items intended for individuals inspired
and made sure about, and the approaching cost for an item guarantees tolerable quality. Apart
from this, now a day’s number of consumers love to decorate themselves and also share their
lifestyle with others. This has open up a chance for L'Oréal. Individuals today wouldn't like to
go to salon for hair spa however need items with the goal that they can spa at home just and
L'Oréal is giving such items to its customers. Today’s age has gotten extremely cognizant
about the earth, so it doesn't buy that item which has impeding effect on nature. Additionally,
because of the weight of individuals government has restricted the testing of items on the
creature. Thus, it is crucial for company to analysis customers taste before serving products
and services in market place. This can be beneficial in improving the overall profitability
level.
Ethical factor: L’Oreal is world’s famous and leading beauty company that operate their
operations in different country with the hope of establishing its ethical and positive brand
image. In context of this, a few moral issues with L'Oreal that have granted them negative
stamps in various classes on our scoring framework, including for creature testing,
environmental change, poor natural announcing, living spaces and assets, contaminations and