Market Environment of Loreal

This report discusses the PESTLE forces of Loreal in Canada, along with micro factors like suppliers, competitors, and customers. It also talks about the strength, opportunity, threat, and weakness of the company, R&D, and innovative marketing.

Running head: MARKET ENVIRONMENT OF LOREAL
Market Environment of Loreal
Name of the student
Name of the University
Author note

1MARKET ENVIRONMENT OF LOREAL
Executive Summary
The primary purpose of this report is to discuss about the PESTLE forces of the brand called
Loreal within Canada. It also throws light on the micro factors in relation to company like the
suppliers, competitors and the customers. The report also talks about strength, opportunity,
threat along with weakness in relation to the company. It also talks about R & D of Loreal
and the innovative marketing in relation to the company.

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Table of Contents
Introduction................................................................................................................................3
PESTLE Analysis.......................................................................................................................3
Micro factors..............................................................................................................................5
Conclusion..................................................................................................................................8
References..................................................................................................................................9

3MARKET ENVIRONMENT OF LOREAL
Introduction
Market Environment refers to forces that affects the ability of a firm in maintaining
customer relationships that are successful. The understanding of macro marketing
environment proves to be crucial in understanding environment and it can help a business in
adapting to that of social environment. Loreal is the name of a personal care company that
has headquarters in France. It is the largest cosmetics company in the world which
concentrates on hair colour, make up, hair care, men’s skin care and skin care (Loreal.ca
2018). Loreal Canada has headquarters in the region of Montreal that helps in looking after
the well-being of the people. This report focuses on the macro along with microenvironment
of Loreal. It also elaborates on the strength, weakness, threats along with opportunities in
relation to the company. The report also talks about the Research and Development and the
innovative marketing practice of Loreal.
PESTLE Analysis
Political- The goods that are imported in Canada are levied with federal GST that is
calculated at that of rate of 5 % of that of duty paid value of shipment. There are different
provinces within Canada that has combined GST with that of provincial sales tax (Wolcott
2017). It has helped in the creation of Harmonized Sales Tax that favours growth of the
business. The goods which are subject to GST are untaxed when they are exported from
Canada. This helps in favouring business in Canada.
Economic- The economic competitiveness of Canada is sustained with the help of strong rule
of the law. The institutional foundations of Canada pave the way for open-market system that
helps in growing the industries within Canada.
Social- The regulatory framework in Canada is transparent that helps in facilitating robust
business formation within Canada. The burgeoning of different kinds of business has helped

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in improving the condition of the people living in Canada. This helps in facilitating the
operation of business in Canada. The standard of people of the Canadians are quite high that
is instrumental in the increasing the sale of beauty products in Canada (Al-Shahmani 2018).
The consumers in Canada have aesthetic sense that proves to be an important cause for
growing the market of the cosmetic companies in Canada.
Technological- Canada has made advances in the arena of technology that has helped the
country in developing in various areas like transportation, communication along with public
works. The new technologies has helped in growing and developing various business in
Canada. This helps the companies in using social media for promoting the products. Artificial
Intelligence along with augmented reality is made use of by the cosmetic companies in
Canada that helps in providing the clients with great service.
Legal- The people in Canada are aware about legal aspects in relation to products that helps
them in manufacturing products that can cater to needs of the customer. Consumer Laws
along with Health and the safety Law helps in taking care of the fact that the products that are
made are of good quality that helps the various business in growing popular in Canada
(Tournois 2014). A company can prove to be influential in the society in the event of
maintaining the legal procedures. The different companies in Canada takes into consideration
legal aspects that augments growth of the business in Canada.
Environmental- The climate in Canada is quite diverse that helps the various industries in
Canada to flourish. Canadians can enjoy distinct seasons and this proves to be convenient for
growth of the industries. Canada has blistering cold winter and the beauty companies in
Canada makes products that can cater to the needs of the people within Canada.

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Micro factors
The suppliers- There are high-quality suppliers in Canada that helps in boosting the various
business in Canada. Transparent relation that is maintained by the various business in Canada
with the suppliers helps in growing different business in Canada (Kot and Brzezinski 2015).
There are many kinds of suppliers in Canada like Skincare Distributor Canada and Modern
Beauty Supplies that helps in facilitating the business of Loreal in Canada.
Competitors- There are various beauty brands in Canada like Bite Beauty, Nudestix, Ilia,
Mac Cosmetics and Lise Watier that lessens the market share for a particular company. It
paves the way for less demand in relation to a particular brand that makes the competition
very stiff for the Loreal in Canada.
Customers- The companies in Canada have been able to recognize about the different kinds
of customer types that helps the companies in Canada to make products that serves the needs
of the customers. The powerful advertising efforts made by Loreal helps in drawing and
retaining the customers that helps the different business to prosper in the country.
Intermediaries- There are many market delegates in Canada like retailers and the
wholesalers that helps in spreading the different products of Loreal in the Canadian market.
There are various retailers along with wholesalers that helps in showcasing the various
products of the company in Canada.
Company- Loreal in Canada understand the assets that the company have and they about
their capabilities that helps them in creating a distinct position in the market. The company in
Canada use well the resources of the company that helps them in increasing their position
within the market (Tjemkes, Vos and Burgers 2017).
General Public- Corporate Social Responsibility plays an important role and it proves to be
an important factor that helps a company in being sustainable within the market. Loreal has

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business practice that is environment-friendly and they take into account unsustainable
sourcing along with chemical pollution that helps in them in becoming popular among
customers (Kernstock, Brexendorf and Powell 2017). The media in the present age lays great
amount of emphasis on the aspect of sustainability and Loreal takes into account this aspect
that has helped in development of the brand.
b. Tows Matrix of Loreal
Threats Opportunities
 The intense competition that Loreal
has within the Canadian market from
the rival cosmetic companies acts as
threat for the company
 There exist lobbying pressure
against that of the cosmetic industry
that threatens the presence of Loreal
in that of Canadian market
 The consumers in the present age
tend to look out for value added
products and this helps in opening
opportunities for Loreal in the
Canadian market (Gazzola 2018).
 There are emerging new segments
pertaining to cosmetic companies
that helps in opening opportunities
for Loreal.
Weakness Strength
 Old portfolio
 The persisting of the management
methods of the 1980’s is a cause of
weakness for the company
 The revenue growth of the company
is slow that acts like weakness for
the company
 Loreal is the leader in the cosmetic
brand and the popularity of the
brand has helped it capturing a large
amount of market share within
Canada.
 The company lays great amount of
stress on R & D that helps the in

7MARKET ENVIRONMENT OF LOREAL
innovating the products.
 Loreal has international presence
and a great strategic position that
acts as strength for the company.
c. Critical Success Factors
Loreal Canada lays focus on the aspect of R & D that helps them in innovating the
different kinds of products on the basis of new trend along with demand. Strong research has
been able to make create innovative products of the brand that has been capable of generating
real results. Loreal makes use of Advanced Research along with Applied Research that has
helped in developing formulation system for the company (Phipps and Prieto 2018). The
innovative formulas of the company has helped it in spreading its presence in that of
Canadian market. The constant dialogue that takes place between science and that of
marketing has opened new fields of the exploration for the company called Loreal. The safety
and the sincerity displayed by the company has helped the company in gaining prominent
position within global market.
Innovative marketing
Loreal has been able to develop a tool called dubbed cockpit that helps in measuring
ROI in relation to the company. It helps in measuring productivity of the media investment
with that of real time that helps the companies in creating products that can serve needs of
customer. The tool has been developed with the help of cloud business Domo that helps the
managers of Loreal in getting clear view regarding what is working and what is not working
in the company (Ahmad, Yunus and Rose 2015).

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Conclusion
Market environment is indicative of the forces that helps a company in maintaining
good relationship with the customer. The understanding of environment can help a business
in adjusting to social environment. The various provinces in Canada has combined the GST
with the provincial sales tax. Strong rule in relation to law assures the aspect of economic
competitiveness that helps the different companies in Canada. There are various suppliers
within Canada that has helped in boosting growth of Loreal within Canada. The presence of
many beauty brands has lessened market share in relation to particular company. The
customers want to buy value added products and this has helped in opening plethora of
opportunities for the popular brand in Canada. Lobbying pressure proves to be a threat in the
path of success for Loreal. They lay emphasis on R & D that helps in bringing about
innovation based on emerging trends in market. The developing of tool by the name of
dubbed cockpit helps to measure ROI in relation to company.

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References
Ahmad, S.N.B., Yunus, S. and Rose, R., 2015. Influence of Attitude on Consumers’
Awareness toward Halal Cosmetics in Malaysia.
Al-Shahmani, H., 2018. The impact of the emerging trends on the makeup market in Europe.
Gazzola, P., 2018. Ethical Behaviour Integrated in CSR: How to create and maintain the
Corporate Reputation. Economia Aziendale Online, 9(2), pp.175-185.
Kernstock, J., Brexendorf, T.O. and Powell, S.M., 2017. Introduction: Luxury Brand
Management Insights and Opportunities. In Advances in Luxury Brand Management (pp. 1-
24). Palgrave Macmillan, Cham.
Kot, S. and Brzezinski, S., 2015. Market Orientation Factors in Sustainable Development and
Corporate Social Responsibility,“. Asian Journal of Applied Sciences, 8(2), pp.101-112.
Loreal.ca (2018). L’Oréal, world leader in beauty: makeup, cosmetics, haircare, perfume -
L’Oréal Group. [online] Loreal.ca. Available at: http://www.loreal.ca/en-ca/ [Accessed 10
Dec. 2018].
Phipps, S.T. and Prieto, L.C., 2018. The business of black beauty: social entrepreneurship or
social injustice?. Journal of Management History, 24(1), pp.37-56.
Tjemkes, B., Vos, P. and Burgers, K., 2017. Strategic alliance management. Routledge.
Tournois, L., 2014. Too many products? Reaching the next billion customers of the beauty
market. Journal of Business Strategy, 35(5), pp.3-13.
Wolcott, G., 2017. Restricting Choices: Decision Making, the Market Society, and the
Forgotten Entrepreneur. Journal of Business Ethics, pp.1-22.

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