PESTLE and SWOT Analysis - L'oreal
Added on 2020-12-10
14 Pages4318 Words164 Views
Business Strategy
Table of ContentsINTRODUCTION...........................................................................................................................3TASK 1............................................................................................................................................31) PESTLE and SWOT analysis along capabilities...............................................................32) Competitive environment using five Porter's Model.........................................................7TASK 2............................................................................................................................................81) Evaluation of different types of strategic directions for organisation................................82) Justification and recommendation for growth platform and strategies............................103) Strategic management plan with strategies, objectives and tactics..................................10CONCLUSION..............................................................................................................................12REFERENCES .............................................................................................................................13
INTRODUCTIONBusiness strategy is defined as set objectives or plans in order to achieve desired goals. Itis considered as long term enterprise planning which focus on resource issues such as raisingfunds for building new factory (Alsudiri Al-Karaghouli and Eldabi, 2013). In order to survive incompetitive market, it is necessary to formulate effective strategy. The given project is based onL'oreal which was founded in 1909 at French. It deals in cosmetics and personal care servingproducts worldwide. The report covers various impacts and influence of macro environmentalong with analysing capabilities of organisation and its environment. PESTLE, SWOT andPorter five force models has been discussed. There are different types of strategic directions forenterprise, recommendation for growth platform and strategic management plan has prepared.TASK 11) PESTLE and SWOT analysis along capabilitiesIn order to make strategic planning, proper analysis of market need to be done bymanager of company. The deputy manager of L'oreal need to analyses both internal and externalmarket which helps in better decision making. The analysis of PESTLE and SWOT are as followPESTLE AnalysisIt is tool that is used by marketers for analysing and monitoring macroenvironment(external marketing environment) factors which has impact on organisation. Thisidentifies driving forces of change in strategic environment (Bharadwaj and et. al., 2013). ThePESTEL analysis of L'oreal are as follows:
Political- It means extent to which government influencing economy and followingregulations, policies and rules of that countries where L'oreal is operating business. It includespolitical stability, foreign trade, labour law, trade restrictions, environmental law etc. Theopportunities and threats of political factors are:Positive- The manufacturing company of L'oreal is in Paris which has free trade policiesthat helps in better importing to other countries that leads to success of organisation alongwith rise in globalisation.Negative- If there is sudden change in policies of government regarding cosmetic andpersonal care products then L’Oréal has to bear threat for their products as they havealready manufactured goods for their customers.Economic- It is defined as performance of economy that impacts L'oreal having longterm effects. This includes interest rate, foreign exchange, inflation, economic growth, others(Chang, 2016). Positive- Due to increase in GDP of customer, purchasing power rises for buying luxuryproducts like L’Oréal which creates opportunity to maximize profits.Negative- Whenever there is decrease in dollar and other currencies value thenpurchasing power of customers also decline that leads threats to L'oreal.Social- It is defined as belief, values, characteristics, attitudes and opinion of consumers.It includes age distribution, career attitudes, population growth and health consciousness. Positive- The modern society prefers more fashion trends products for daily use. In thiscase, it has opportunity to capture market by producing products as per need and demandof customer by using latest technology. Negative- The ingredient used in L'oreal products consists of more chemical which isharmful for skin. As today's customer want less chemical goods to use which is threat fororganisation. Technological- These factors refer to innovation in technology which affect operationsof L'oreal and its markets. It includes research, development, automation and others. This factorsimpact management and marketing in three ways such as: new ways for distributing andproducing goods and services. Also, new methods for communicating with specified market(Eaton and Kilby, 2015).
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