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L'Oreal Business Strategy

   

Added on  2020-10-22

17 Pages5201 Words67 Views
BUSINESS STRATEGY
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Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1PESTEL analysis of L'Oreal.......................................................................................................1SWOT analysis of L'Oreal..........................................................................................................3Capabilities of organisation: VIRO model..................................................................................4Porter's five force model.............................................................................................................5TASK 2............................................................................................................................................7Strategic direction of the L'Oreal................................................................................................7Justification and recommendation of the appropriate growth platform for L'oreal....................8Production of a strategic management plan:...............................................................................8CONCLUSION................................................................................................................................9REFERENCES..............................................................................................................................11
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INTRODUCTIONBusiness strategy is a comprehensive plan to achieve organizational goals and objective. It is astrategic plan which helps company maintain a competitive edge in the market with strongfinancial strategy and evaluating threats to increase profitability and productivity of thecompany.L'Oréal is one of the largest cosmetic industry in the world which was founded in theyear 1909 by Eugene Scheuller. L'Oréal mainly deals in skin care, hair colour, make-up, sunprotection, hair care, cleansers, hair style and perfume.This study highlights internal and external environmental factors which influencestrategic planning of L'Oréal. Complete analysis of L'Oréal is done through PESTEL whichevaluates macro environmental factors like politics, environment, social, technological,economic and legal which affect the business in strategic decision making. Internalenvironmental factors of the company are evaluated through SWOT analysis which helpsdetermine strength, weakness, opportunity and threat of L'Oréal. It further includes porter's five force model to analyze competitive rivalry in the marketand and take strategic decision to increase productivity of the company. Further it also analyse the L'Oréal will evaluate different strategic directions which willhelp evaluate growth plans for the business.TASK 1L'oreal: The name of this cosmetic and body care product line is not unknowns as this isone the leading brand in the world having a large share of the market place in skin care industry.The products line of the brands extents from hair colour, skin care, hair care, sun protection,make up, perfumes, men's care and so on (Huizingh and McCarthy, 2015). Bering of the leadingbrands and dealing with the products whose demands and requirements have a high tendency tochange. The organisation need to revises or change its overall strategies time to time for keepingis position intact with achieving the goals and objectives of the organisation. The company haveits operation in more than 130 countries covering different regions and cultures directly effectingthe operation of the organisation.PESTEL analysis of L'OrealPolitical factors: The political factors man the rules and polices by the governments ofdifferent nation where the L'Oreal operates and is working. Most of the manufacturing are1
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carried out if Paris so most likely the government polices of France affects the company most.Along with this the policies related with imports of goods of various regions plays a vital role inthe success of business. With globalisation the business polices are made somehow liberalthrough various treaties and convention among nation making it a positive factors for growth ofL'oreal.Economical factor: It includes the rate of exchange of different states where thecompanyworks. The recession, changing the rate of inflation are some of the factors whichplays a significant role in the success of L'Oreal (Schawel and Billing, 2018). The prices ofproduct it varies with changing region and country due to change in the requirements as perchanging weather conditions and skin type. The economies with good GDP and per capitaincomes are more likely to spend large amount on the products of L'oreal which increases theprofitability of the business.Social factor: Social factor includes the trends in the society, their purchasing habits andbehavioural traits. People nowadays are more interested in latests fashion trends and buy theproducts according;y. This directly effect the strategies and product developments plan of theL'Oreal. Moreover, the ethical and environmental concerns over some of the ingredients of theproducts also affects the decision making strategies of the organisation.Technological factor: Technologies are omnipresence irrespective of size, type,orientation of the business. The brand L'oreal is very much indulge in innovation as it have atendency to follow the contemporary tenders (Vargas-Hernández and Garcia, 2019). Thetechnologies with latest updates makes it possible for the organisation to spread the innovation ina short span of time to fashionistas and make them aware about the product. The technologicaladvancements also assist the L'Oreal in getting a competitive advantage with bring up theinnovation at first place.Environmental factor:This can be defined as a combination of various globalenvironmental safety laws and regulation that the L'Oreal must abide with as per he globalstandards. With increasing awareness about he adverse effect of globalisation over theenvironment the nations as well people have also become aware about the police framework forthe protection of the environment. It is always a good strategy to consider these factors whiledetermining the policies for the company.2
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