Impact of Macro Environment on L'Oreal

Context of Business

Contents
Contents...........................................................................................................................................2
INTRODUCTION...........................................................................................................................1
MAIN BODY..................................................................................................................................1
1. Discussion of the impact of macro environment has on the current situation faced by
L'Oreal.........................................................................................................................................1
2. Organisational culture at Body Shop and L'Oreal...................................................................3
3. Discussion about the factors that L'Oreal would have considered before deciding to acquire
Body Shop...................................................................................................................................4
4. Factors having effect on the L'Oreal's acquisition of Body Shop resulting in failure of
project..........................................................................................................................................5
CONCLUSION................................................................................................................................6
REFERNECES................................................................................................................................8

INTRODUCTION
Context of business refers to the assessment of different factors which have huge impact
on the operations of business organisation. In order to operate all the business activities smoothly
it is essential for the organisation to gone through from all the factors which might lead negative
impact on the business operations. This following assignment is based on L'Oreal which is one
of the well recognised cosmetic industries that operates its activities across the world. Currently,
this company is planning to acquire to Body Shop which is also operating its business activities
under same industry. This file will cover several topics includes influence of macro environment,
organisational culture of both companies, different factors which requires to be considered while
opposing other business etc. Additionally, different factors which are occurring due to the failure
of acquisition and reflection will also consider in this report.
MAIN BODY
1. Discussion of the impact of macro environment has on the current situation faced by L'Oreal
Macro environment refers to the external forces of business organisation which have
great impact on the organisational performance (Chun, 2016). Consideration of these factors in
decision making is essential so as to operate all the business activities smoothly. It is also
necessary for the manager of L'Oreal to evaluate external environment so that they can acquire
Body Shop effectively without any crisis. In this regard, they can use PESTEL analysis which is
describing beneath:
Political: These factors related to government institutions are considered as part of it.
These factors include stability of governmental parties, trade restriction, tax policies and many
others. At the time of acquiring Body Shop L'Oreal has faced a lot of challenges related to
taxation policies of government. As spending amount of L'Oreal for acquisition was 652 million
pounds so company have to pay higher amount of tax on the same due to which the overall cost
of the acquisition will remain at higher level.
Economic: These factors includes inflation rate, interest rate, exchange rate, deflation, trade
policies etc. as these are directly related to the economy of nation. L'Oreal is a French personal
care company as current main focus of them on acquiring Body Shop which is established in
UK due to which company have to face the issue of paying the amount in local currency which
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