Internal and External Influences on L'Oreal

Added on - 21 Feb 2021

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Illustration1: Loreal's Strore ViewL'Oreal Strategy Report
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................3Analyse the impact and influence of the macro environment on the L'Oreal organization.........3Evaluating the internal environment and capabilities of the L'Oreal...........................................5TASK 2............................................................................................................................................7Evaluating the competitive forces of the L'Oreal in the market via Porter's five forces.............7Diverse strategic planning if the L'Oreal through the application of range of theories, conceptsand models...................................................................................................................................9Recommendations to improve the strategic planning within the L'Oreal cosmetic basedcompany.....................................................................................................................................11CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12
INTRODUCTIONStrategic planning is the organization's process of defining its strategy, or direction andmaking the decisions on allocating the resources. An organization strategy is the sum of actionswhich company intended to take in order to achieve the long-term goals. This report will bebased on the strategies of the L'Orealand this enterprise deals with the variety skin care andbeauty products. The study will help in understanding the macro and micro environmentalfactors that influence the overall companies position as well as profitability. Along with this, thedocument will also helps in investigating various strategies that which reveals the capabilities ofthe L'Oreal.Moreover, this report will also helps in understanding about the competitive firms whichimpacts on the sales and popularity of the L'Oreal brand. Range of theories and models areapplied within the study in order to identify the effective and efficient strategies within the firmwhich helps company to enhance the customer satisfaction as well as increased profitability ofthe firm.TASK 1Analyse the impact and influence of the macro environment on the L'Oreal organization.Business strategiescan be termed as the long term plan of action which are mainlydesigned to achieve a particular goal or set of objectives(Ansoff And et.al., 2018). In the field ofmanagement, Strategic management consists of the formulation and implementation of the majorgoals and initiatives which is mainly taken by the top management staff of the L'Oreal. Thiscompany operates the business with amissionto help the people in realising the aspirations andenhancing the individual looks to the fullest which develops the personality and confidenceamong them.This company offers thewide range of cosmetics and beauty productsto womenas well as men which helps them to beautify their physical appearance and this allows thecustomers to gain self-confidence and open up to others. So business strategy is one of theimportant aspect which allows them to sustain and grow in this highly competitive market. Thesestrategies also allow the company to innovate and invent new products which will meet thedemands of the user. Thus making the strategies within the firm isvery importantas it helps inbringing something new which is may be responsible for the companies maximised sales andincreased profitability(Connelly And et.al., 2019). Also Strategic management generallyprovides a consistent framework for managing each phase of the strategic planning life cycle.
Macro environmental factorsare the major external and uncontrollable factors thatinfluence an organization's decision making and it also impacts on the overall performance andstrategies of the L'Oreal. As the business is mainly affected by the different factors whichcollectively form the business environment can be termed as the business environment (BE). Itgenerally consists of macro (External Factors) and micro (Internal Factors) business environmentwhich influence the overall company's strategy and performance. So there are someanalyticalframeworkwhich helps in analysing the factors which influence the business.The PESTELanalysis of L'Oreal will cover all the macro environment factors thatinfluence the company's main strategies which consists of production of variety of productsaccording to the customer demand. PESTEL analysis is a strategic management tool whichallows the leaders in a L'Oreal to make the better decisions. L'Oreal generally operates in adynamic environment which which can be easily influenced by the increasing environmentalactivities among the consumers, government, regulatory framework along with the social trendsand legal system within the region.PoliticalThese factors are often related to the local or national interventions of the governmentwhich impact on the economic environment of the L'Oreal(Epstein, 2018). As this companyoperates the business within the large number of countries which consists of differentgovernmental rules which lead to the huge impact on the main objectives of the business. In thecosmetic company, there are various products been used that are related to the personal care. Soan Act is introduces which is called as FDA that ensures the safety of the product which ismainly designed for Skin-to-Skin contact. So there is a huge political concern as the governmentof the UK has banned the 500 cosmetic ingredients out of total 1328. Therefore lack of resourceavailability because of the government intervention may leads to the political concern whichinfluence the quality of the beauty products. Thus, it impacts on the strategic decisions-makingof the managers within the L'Oreal.EconomicalIt is one of the important concern, unlike the beauty industries which are quite resistant tothe economic recession. In 2008, rapid changing technology has made the people more priceconscious and thus they decided to buy only the products which fulfils their survival needs(Grover, Chiang, Liang and Zhang, 2018). However, in 2015, The UK's beauty industry
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