Impacts of Macro Environment on L'Oreal's Acquisition of Body Shop

Context of Business

Table of Contents
INTRODUCTION...........................................................................................................................1
PART 1............................................................................................................................................1
1. Discussion of all the impacts of macro environment on the current situation of L'Oreal
particularly the social and ethical factors.....................................................................................1
2. Body Shop and L'Oreal's organisational culture and their compatibility along with benefits
and opportunities arising from them............................................................................................3
3. Analysis of those factors which would have considered by L'Oreal before deciding to
acquire Body Shop.......................................................................................................................4
4. All the factors that had effect on the L'Oreal's acquisition of Body Shop resulting it in the
failure...........................................................................................................................................5
PART 2............................................................................................................................................6
5. Reflection report on the experience in writing the report........................................................6
CONCLUSION................................................................................................................................6
REFERENCES................................................................................................................................8

INTRODUCTION
Context of business is the combination of different types of factors which are required to
be analysed by organisations for the purpose of reducing their negative impacts upon operational
activities. Main purpose of it is to guide all the business entities to analyse all the external as well
as internal forces which may possible lead towards failure of projects (al-Najdi, K. A., 2017).
This assignment is based upon an acquisition of Body Shop made by L'Oreal. For this purpose,
different topics are covered in this project which are analysis of impact of macro environment,
organisational culture of both the companies, factor considered to make acquisition decision and
forces resulted in failure. At the end of the report a reflection is also provided for the purpose of
sharing experience of working on the project.
PART 1
1. Discussion of all the impacts of macro environment on the current situation of L'Oreal
particularly the social and ethical factors
Macro environment is a framework which consist all the external factors which may
affect operational efficiency of an organisation. While operating business or planning for
expansion it is very important for all the companies to analyse the macro environment in order to
determine all the forces which may lead towards failure. When L'Oreal acquired Body Shop then
it is also analysed by the enterprise. For this purpose, PESTLE analysis was used by the entity.
All the effects of it on the current situation of the company are discussed below in six different
points:
 Political: The elements such as stability of government, possible changes in the
legislation and global influences are the part of political forces. While acquiring Body
Shop L'Oreal have faced different challenges because of different domestic countries.
The organisation was required to comply with all the legislation of UK while acquisition
and due to differences in governmental policies the entity have faced issues to make sure
that political interferences in the business could be ignored (Caitlin McBride, J. D. T. and
JDTT, S. A., 2019).
 Economic: Growth of economy, exchange and inflation rates, monitory policy, consumer
confidence, employment rates etc. are economic factors which has left negative impact
upon L'Oreal acquisition of Body Shop. Due to changes in these factors value of currency
1