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L'Oreal Business Strategy : Assignment

   

Added on  2021-01-02

13 Pages3795 Words470 Views
Business Strategy

Table of ContentsINTRODUCTION...........................................................................................................................1TASK1.............................................................................................................................................1P1. Analyses the impact and influence of macro environment on L'Oreal and its strategies.....1TASK 2............................................................................................................................................3P2 Analysis of internal environment and capabilities of a given organisation...........................3TASK 3............................................................................................................................................6P3 Application of porter's five forces model...............................................................................6TASK 4............................................................................................................................................7P4 Application of range of theories, concepts and models.........................................................7CONCLUSION..............................................................................................................................10REFERENCES..............................................................................................................................11

INTRODUCTIONBusiness strategy is the organisations working plan for accomplishing its vision,precedence to the objectives, competing successfully and optimising financial performance withits business model. These strategies are the means which are set to accomplish desired objectives(Afuah, 2014). Organisation undertaken in this report is L'Oreal which was founded in 1909 inFrance and provides cosmetic and beauty essentials. This report will explain the impact andinfluence on the macro environment in a organisation and its strategies. It will also analyse theinternal environment and capabilities of the company. By applying porter's five forces model itwill evaluate competitive forces of a given market sector. This report will also apply the range oftheories and concepts to evaluate the strategic planning. TASK1P1. Analyses the impact and influence of macro environment on L'Oreal and its strategies.When an organisation is involved in any business, than it is not doing business alonebecause the company is surrounded by various operations. The PESTLE analyses is theframework or model which is used to scan the organisations external or macro environment. Thisanalyses of political, economic, social, technology, legal and environment factors is costeffective, provides thorough understanding of business, forecasts about the upcoming threat andexplores various opportunities for the business. This helps in identifying significant changes thattakes place in the company due to the external forces (Baker, 2014). This is very useful toconduct this analyses before starting any business as this can affect the company. Following isthe analyses of PESTLE factors in L'Oreal and they are discussed below:Political: Every business has a certain limitation or restrictions through political factorsof the country. This involves laws, government agencies, political stability, taxation, etc. whichinfluences and impact the organisations and people working over there. Therefore, decision ofbusiness strategies are strongly affected by the development in the political factors. In L'Oreal, itincludes the rules and regulations of the government in which the company works.Economic: These are the factors that leaves impact on the growth and development ofthe economy. It includes inflation deflation and other elements.L'Oreal is a part of beauty andcosmetic industry which immune the economic downturn. Fluctuation in inflation or deflationrates direct leaves impact upon purchasing power of the customers. When it increases then price1

of the product get increased and buying capacity of the customers get decreased which affectsL'Oreal negatively.(Source: PESTLE Analysis, 2017)Social: Taste, age, preferences, education level etc. are the part of social factors and toachieve huge success organisations are required to offer such products to the customers thatmatches to these elements. Now a days customers in UK are becoming conscious regarding theformulation of product. For L'Oreal it is very important to follow the culture of UK and othercountries where it is operating its business so that their values, attitudes and beliefs can befocused while delivering beauty and cosmetic products. Currently modern standard of living isresulting in improvements in education level and it makes people to focus on image, appearanceand quality of products. If L'Oreal is not able to deliver good quality products then it will reduceits market share, profitability and sales (PESTLE Analysis, 2017).Technological: Emerging technology, innovation, research etc. are considered as the partof such factors that affect businesses in both the manners whether it is positive or negative.2Illustration 1: PESTLE Analysis, 2017

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