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Pestle and Swot Analysis of Loreal

   

Added on  2020-10-22

15 Pages4288 Words220 Views
Business Strategy

Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1PESTLE and SWOT of the organisation and an analysis of the organisation’s capabilities......1Analysis of the competitive environment of the organisation using Porter’s Five ForcesModel..........................................................................................................................................5TASK 2............................................................................................................................................7Different types of strategic directions available to the organisation..........................................7Justification and recommendation of the most appropriate growth platform and strategies......8Strategic management plan with strategies, objectives and tactics.............................................9CONCLUSION..............................................................................................................................11REFERENCES..............................................................................................................................12

INTRODUCTIONBusiness strategy is simply a high level plan developed by an organisation for reachingspecific business objectives. In addition to this it can be defined as a means with the help ofwhich an organisation achieve its desired ends, basically it is refers to a long term businessplanning (Cavusgil and et. al., 2014). The company which is being considered to carry out thisassignment is Loreal which is one of the world's leading providers of wide range of accessoriesand skin care products with its headquarter in Clichy. This report focuses on PESTLE andSWOT of the organisation as well as analysis of the competitive environment of theorganisation using Porter’s Five Forces Model. Apart from this, report will render descriptionabout types of strategic directions available to the organisation and about the strategicmanagement plan with strategies, objectives and tactics.TASK 1PESTLE and SWOT of the organisation and an analysis of the organisation’s capabilities.In order to sustain in marketplace it is essential for management of Loreal firm to makean analysis of the external factors affecting the business operations. Thus, the company takes intoconsideration PESTLE Analysis techniques which is explained below (Chang, 2016):PESTLE Analysis of Loreal Political factor:These factors refers to the influence of government on the working of an organisation.These influence can be made by policies, political instability, rules, laws, trade restriction etc.UK's political stability is the strength of the country which leads to the creation of a stablepolicies by the company for long term period which term to be the positive impact for Lorealbusiness (Chen and Jermias, 2014). As UK government has faced with Brexit it has effected onthe stability of the country and Loreal in a negative way.Economical factor:It refers to the factors such as currency rate, inflation rate, disposable income etc. whichhelps in determining the performance level of an economy. If the GDP of economy will be lowthen it will also lead in decrease in the disposable income of individual. Thus, because of whichpurchasing power of the people will get decrease and will will result in decrease in theprofitability margin of an organisation (Cortimiglia, Ghezzi and Frank, 2016). Similarly in case1

if the GDP of an economy will increase then it will lead in increase in the disposable income ofindividual which will directly result in increase in the purchasing powers of people. Thus, if thepurchasing power will increase customer of Loreal product will make more of purchase ofproducts and services which will result in increase in the productivity and profitability margin ofan organisation.Social factor:These factors refers to the changes taking place in the social trends, preferences, religionetc. due to the factors such as demographics, age distribution, cultural barriers (Goffee andScase, 2015). If the management of Loreal company will produce products taking intoconsideration customer preferences by maintaining the quality standard of its products then itwill positively impact upon business in the form of increase in the productivity and profitabilityratio. In case if the firm ignore the customer preferences and just simple focuses on producingproduct then it will negatively impact on business in the from of decrease in profit margin as inmodern era customer are more skin conscious so Loreal firm should produce product taking intoconsideration customers perspective.Technological factor:These factors refers to the changes that keeps on taking place in the advancement oftechnology and tools (Hart, Sharma and Halme, 2016J). So in order to achieve a sustainablegrowth in market it is essential for the firm to adopt the undated and modern technology so as toproduce superior quality products. In case if the firm fails to adopt modern technology and keepson producing product with its old technology then it will negatively effect the performance of anorganisation in the form of decrease in profitability margin.Legal factor:It refers to the rules and regulation which are imposed b y the government of country. AsUK government has passed a rules regarding Advertising Standards Authority and Loreal hastaken such rules and regulation into consideration while adverting about its product which hashelp the firm in achieving a great competitive advantage in marketplace (eston, 2014J). Similarlyin case if the company fails to acknowledge the legal rules and regulation made by governmentthen it will negatively affect the brand image of firm in marketplace. So it is essential for thefirm to make its strategies according to the policies and rules framed by the government as this2

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