PESTLE and SWOT Analysis of L'Oreal
Added on 2021-01-02
13 Pages3906 Words123 Views
Business Strategy
Table of ContentsINTRODUCTION...........................................................................................................................1TASK 1............................................................................................................................................1PESTLE and SWOT analysis of organisation and analysis of their capabilities........................1Analysis of the competitive environment of the organisation using Porter’s Five Forces Model.....................................................................................................................................................5TASK2.............................................................................................................................................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 .............................................................................................................................10REFERENCES..............................................................................................................................11
INTRODUCTIONBusiness strategy is defined as set of decisions which assist the entrepreneurs inachieving specific business objectives. It is the master plan by the management of theorganisation to secure a competitive position in the market. It is a summary of the planes whichis followed by the organisation to meet business objectives. To understand business strategyL'Oreal company is taken which is French personal care organisation founded in the year 1909. Itwas founded by Eugene Schueller by establishing headquarters is in Clichy, France andemployees approx 90000 employees (Eini and Parisay, 2016). This report consists of impact ofinternal and external factors through PESTLE, SWOT and Porter's five force model. Apart fromthis models, theories and concepts to assist with the understanding and interpretation of strategicdirections available to the organisation is mentioned. TASK 1PESTLE and SWOT analysis of organisation and analysis of their capabilitiesFor creating a strategic plan, effective analysis of market is required to be performedthrough the firm manager. The deputy manager of L'oreal required to analyze the internal as wellas external market that assists them to make effective decisions. The PESTLE and SWOTanalysis are mentioned below:PESTLE AnalysisThis is considered as a tool which is utilise by marketers to monitor and analyse externalenvironments factors that have impact on firm. It also find out the changing driving forces intostrategic surroundings. PESTLE analysis of L'oreal are explained below:Political factors:It refers to the extent where government influence economy as well as obey rules andregulations of country where L'oreal is running their business. This consider foreign trade,political stability and so on (Figueira-de-Lemos and Hadjikhani, 2014). Therefore, theopportunities and threats of political factors are as follows:Opportunities: L'oreal is a manufacturing company in Paris which have free tradepolicies that assists in improved importing to another countries which leads to success ofcompany and also growth in globalisation.1
Threats: In case if there is sudden change into government policies in respects ofpersonal care as well as cosmetic products at that time L'oreal have to face threats for itsproducts as they has already produced products for its consumers.Economic factor:This is considered as a performance of economy which impacts L'oreal having longperiod of time. It involves inflation, economic growth and so on (Franco, 2012). Opportunities: As GDP increases then purchasing power of consumers rise in order tobuy products such as L'oreal that forms an opportunities to enhance profitability.Threats: If there is decrease in dollar or another currencies value then consumers buyingpower also decline that leads towards threats to L'oreal. Social factors: This factor is considered as a values, attitudes, opinions and so on. Now a days societymainly concetrate upon trends as well as changing preferences. In social trends firm has to utilisesuch components which do not hurt the emotions of society. Earlier L'oreal faces issue whichhurt public emotions by utilising few irrelevant ingredients. For example: it has to do change inits product as per the changing customers education level so they have modify products in orderto satisfy the base of clients.Opportunities: Modern society like fashion trends products for regular use. At this case,it is an opportunities for L'oreal to capture market through manufacturing products according tothe demand as well as requirements of consumer. Threats: Ingredients that is utilise by L'oreal consists more chemical that is not good forall types of skin. As clients mostly prefer less chemical contain products to use this is a threat forfirm.Technological factor:This factor considered as a technological innovation that impacts operations of L'oreal aswell as their market (Madondo, 2015). This consists automation, research and development andso on. It also effects marketing and management such as new ways for manufacturing anddistributing products or services etc. Opportunities: By using latest technology, L'oreal can manufacture more productsthrough maintaining standard quality, saving cost and time that leads to higher profitabilitywhich forms an opportunities for firm.2
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