Impact of Macro Environment on LOreal: A Study

Context of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
TASK...............................................................................................................................................1
Impact of macro environment on the situation which is current for LOreal...............................1
Organisation culture including Body shop as well as LOreal and compatibility of the culture,
likely benefits and challenges.....................................................................................................3
Factors that LOreal would have considered before acquisition of Body shop...........................4
Factors affected LOreal for the purpose of acquisition of Body shop........................................5
Reflection report..........................................................................................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
LOreal is a large and famous company which deals in Cosmetic. The company was
founded in the year 1909, the founder of the company is Eugene Schueller and the headquarter of
the company is in Clichy, France (Antczak, 2018.). The revenue of the company is 26.93 billion
euros. In the study impact of macro environment factors will be discussed in detail including
Organisation culutre of LOreal and body shop. The study will cover the factors that would have
been considered by LOreal before acquisition of Body shop. What are the factors that motivated
LOreal to acquire Body shop is covered in detail with personal reflection.
TASK
Impact of macro environment on the situation which is current for LOreal.
Macro environment means environment which considers whole economy, it does not consider
particular sector of the company or industry. For LOreal PESTLE model is used to do analysis of
what are the factors which are affecting the company. It is a perfect model because this will
address what are external factors affecting the business (Johansen. and Nielsen, 2018). PESTLE
analysis includes factors such as Political factors, Economic factors, Sociological, technological,
legal and environmental. Specifically ethical factor which is important to discuss is followed.
Political factor
It is a external factor which includes governmental influence. For LOreal the political factor
affecting the company is its unethical practices in which the government can take strict action
against the company. The positive factor for the LOreal is government can allow subsidies to
LOreal for its interest in the Body which is more follower of ethics.
Economical factor
Economical factor affecting LOreal is the change in inflation of the natural products this will
increase the cost of the product and due to which the price of the product will increase. This will
directly impact the market and the customer will shift due to higher price (Dang, 2018). This
issue can be resolved by making advance purchase of the natural product this will save a lot of
cost and time and due to which the company can take competitive advantage related to cost of the
product.
Social factors
The social factors are the factors which include geographical boundaries, change in taste and
preferences etc. LOreal is doing bad to the society by using harmful ingredient in the product
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