Impact of Macro Environment on L’Oréal

Context
of
Business

INTRODUCTION
Business is considered as activities through which a company can generate money by
selling and buying diverse type of products as well as services. In this an individual who is
running or operating business unit is known as businessman and failure or succession is depend
on his decision (Bargiela, Nickerson and Planken, 2013). Organization taken for this assignment
is L’Oréal which is one of the largest companies in cosmetics industry. It is founded by Eugène
Schueller in the year 1909, its headquarter is situated at Clichy, France. Respective company is
operating its business at worldwide level. Topics which are included in this report are macro
environment factor which impact on company business, organisation culture and benefits of
compatibility of culture. Along with this it will also include factors which are essential before
taking decision as well as it will also explain about factors which may affect respective company
decision of acquisition.
MAIN BODY
1) Discuss impact macro environment had on the current situation faced by L’Oréal
Macro environment is considered as situation that are exists at the business and that will
affect on external factors of environment. For a company management it is essential to conduct
analysis of macro environmental factors so that they can develop proper strategies effectively
that lead them to attainment predetermine goal (Palgrave, London and Chi, 2012). Moreover it
will also help them in designing products and services according to need of consumers at
particular market. There are number of method or tools which a firm can adopt by a company in
order to analyse macro environment. In respect of L’Oréal they are using PESTEL analysis,
which is given below:-
 Political Factor: This factor will include elements like government policies, corruption,
foreign trade policy, tax policy, labour law, trade restriction, political stability and many
more. In respect of L’Oréal, they conduct unethical practices due to which they may
faced political issues political like trade restriction, unstable situation and so on. So it will
be beneficial for companies to conduct their business operations by considering political
factors of different countries at which they are operating.
 Economical Factor: Respective factor include aspects related to exchange rate,
economic growth rate, interest rate, inflation rate, deflation rate, disposal income,