Impact of Macro Environmental Factors on L'Oreal and Body Shop

L’Oreal/Body Shop

Table of Contents
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
Impact of macro environmental factors..................................................................................3
Organisational culture at Body Shop and L'Oreal..................................................................5
Factors considered by L’Oreal before acquiring Body Shop.................................................6
Factors that caused the failure of acquisition of Body Shop by L’Oreal...............................7
Reflection...............................................................................................................................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
A business while working in the competitive environment has to face various internal and
external factors that create an impact on their operations and functions and also affect their
sustainable survival in the market. The companies must follow ethics in performing their
roles and responsibilities towards the stakeholders so that it can continue with the brand
image in the market and can compete in an efficient manner. This assignment is based on
L’Oreal which is a famous company known for its brand in the cosmetic industry and has its
branches in various parts of the world (Voigt, K. I. and et.al., 2017). The company has
recently been accused of following unethical practices in running its business which has
created a downfall in its reputation. So the company has planned to boost its reputation by
acquiring Body Shop which has been known for its ethical code of conduct. This report
contains the effects of external environment on an organisation, its culture along with the
factors that are to be analysed before acquiring other company etc. Further, the reasons due
to which acquisition fail is also discussed along with a reflection.
MAIN BODY
Impact of macro environmental factors
These are the external factors which cannot be controlled or changed by the company but
the company has to form its policies and strategies so that the external environmental
factors do not have negative impact on the company. These factors should be analysed by
the business so that it does not suffer any losses and can remain competitive in the market.
PESTLE which is a strategic management tool can be used by L’Oreal to analyse the
external environmental factors affecting the company which are discussed below :
 Political : These are related to the political conditions of a country which depends
on the rules and regulations of government like tax policies, trade tariffs etc.
L’Oreal was involved in unethical issues like price fixing due to which it had a
downfall in its reputation as UK government does not support companies that are
involved in unethical issues which increase prices of products in the market. This
way the company suffered loss in market as political conditions of UK does not
support unethical activities.