Analyzing L’Oréal Paris: Managing Quality and Introducing New Products

This report analyzes L’Oréal Paris, the largest beauty company in the world, focusing on managing quality and introducing new products. It explores the impact of L’Oréal Paris on the global beauty industry, its innovations, and its relationship with consumers.

Student ID Number
Programme Title Marketing Ext. Degree
Module Title Understanding Operations, Logistics and Supply Chain Management
Module Code (listed on Moodle
and in LTAFP)
Module Convenor
Coursework Title L’Oreal Paris Report
Word Count 2645 Date Submitted

L`Oreal Paris Report
Overview
The aim of this report was to analyse the activity of the largest beauty company in the world
–L’Oréal Paris in report with its consumers, products and services. The main two areas of this
report that will be developed are managing quality and introducing a new product.
The report will also explain the impact L’Oréal Paris has to the global beauty industry
market, the influence of the new innovations the company is planning to implement in the
future and the relation the brand is having with its consumers.
In the past decades, a beauty industry market had a considerable percentage rise in incomes,
as the demand on the skin care products, perfumes, cosmetics and hair care products are
predominantly used by the consumers. By 2022, the forecast of global cosmetic market is
expecting to grow at $429.8 billion and to register a CAGR of 4.3% (Statista. 2019).
L’Oréal is the world leader in the beauty industry, being present in 130 countries on 5
continents. In respect for their diversity, the company vision is to provide the best in
cosmetics innovation for women and men around the world (L’Oréal, 2019).

Figur
e 1. L’Oréal Market Share Worldwide in 2016 by region Source: Statista 2019
Figure 1 shows in percentage the market share of L’Oréal company in terms of region during
the last years. An increase of 20.2% was made only in Western Europe, followed by North
America of 14% and Africa and Middle East of 13% in 2016.
L’Oréal was founded in 1909 and by 2017 become the leader of personal care brand in the
world with a brand value of 23.89 billion U.S. dollars (Statista, 2019)

Figure 2. Brand Value of the Leading Personal Care Brands worldwide in 2019
Source: Statista 2019
Figure 2 explains the growth of the top personal care brands in the world, in million U.S.
dollars. Statista`s graph shows that L’Oréal is the top leading beauty industry company in the
world in 2019, with 28.376 million U.S. dollars, compare to another companies, like Procter
& Gamble Co., Nivea or Dove.
L’Oréal concept is very simple and with impact for its clients: “Beauty is a language. Beauty
is universal. Beauty is a science. Beauty is a commitment and L’Oréal offer beauty for all.”
The meaning behind this concept is L’Oréal promise that will offer to its clients worldwide
the best of cosmetics innovation in terms of quality, efficacy and safety. At the same time, is
the promise that they will use only the products designated for its client’s well-being, to
support the local communities and to preserve the beauty of the planet. (L’Oréal, 2019).
Many author also state that all the leader posses strong attributes i.e. vision, trust selflessness
and commitment. Therefore, It is quite necessary for the select a right person who assist to
take better decision and also reach a business towards further level of a success.
Being a responsible company with respect for its clients, L’Oréal is controlling 85.9 % of
manufacturing production, by using a large integrated industrial model and its own plants,

demonstrating ethical, environmental and corporate principles to the overall quality of its
products. The industrial production is established on all continents, managing to be close to
the market by being divided in 41 plants. In 2010, the company opened in Russia – Kaluga a
new plant and launched in the following year another three building sites in Mexico,
Indonesia and Egypt. For the group strategy support in its international expansion, L’Oréal is
responsible for developing, managing and optimizing all the industrial resources, by
providing the business division with high quality products for its consumer’s safety and
satisfaction, in the required timelines (L’Oréal, 2019)
Part 1. Managing Quality at L’Oréal Paris
“The operations manager`s objectives are to build a total quality management system that
identifies and satisfies customer needs.” While the “total quality management take care of the
customer” and “refers to quality emphasis that encompasses the entire organisation, from
supplier to consumer.” (Jay, H. et all, 2017).
L’Oréal’s goal is to offer to its clients a large variety of products, at the highest quality
standard, by following different steps on its production, starting with the manufacturing
process, as the company is always using a meticulous and finest selection of materials, paying
a strict attention to the plants, checking them many times beforeand ending with the
consumer purchasing journey(L’Oréal, 2019).
The company`s focus is that all its products, including the packaging to be in line with the
latest regulatory standards, following the laws of each country they are selling the products
to.
The third major element of L’Oréal production it is about the resistance of the packaging and
ingredients, as the company is doing over 100 quality controls over the course of fabrication
circle, before to put them in the market. A successful manufacturing company tend to buy
and use technology that can be explored for all its benefits, from being used for a new
product, or just to experiment the technology for a future product (Ettlie, 2014). L’Oréal is
following Ettlie’s theory as the brand is using the most technology machines, one of them
being Lassigny plant used in France, which is equipped with very smart robots used for the
beauty products manufacturing, helping the producers to be more productive and to remain

focused on the quality. Along with this the company also use six sigma model and lean in
order to manage the quality of product and minimize the waste. These model are actually
designed in order to manage the quality of a product and meet the define aim and objectives
as well.
In order to manage quality, company uses six sigma model that improve the current process
and products and services. As the main purpose of using this method is to improve the overall
process and control quality in manufacturing business so that there must be a little variance.
Therefore, it is a method which is used in order to provide efficiency in the operations and
also assist to understand the need of customers, provide quality and delivery method as well.
So, by using this method will assist to maintain the overall quality and as a result, they also
provide a best quality of product to their customer and this in turn assist to increase the brand
image of a company.
Moreover, the model is also based upon the five principle such that :
 The model is mainly focus upon customer and that is why, quoted firm is also make
sure that it meet the demand of customer by offering products.
 It also make sure that the process is work smoothly and there is no disturbance in the
business operational field.
 It also ensure about reducing waste and concentrate upon values. So that it will not
cause any negative impact upon the customers.
 The company also put their efforts systematic and scientific so that it deliver the
product by complying with best quality of products.
 Six Sigma also make sure that it stop defects and also remove all the variations.
L’Oréal factory objectives are to create a large number of products that can be used for any
category of age, sex or skin condition. All L’Oréal ingredients are authorized by the stricter
regulation in place, as European Scientific Committee for Consumer Safety (SCCS) and meet
the higher standards of quality and performance.
Market Research Future, which is specialized in market reports about consumers and retail
sector, recently published a report about cruelty free cosmetics demand, which become a
trend in the last few years. Due to increased consumer’s awareness about the side effects of
testing the products on animals, this trend become very popular, especially on the beauty
sector.
The Global Cruelty –Free Cosmetics Market size is estimated to increase at 10 billion US
dollars by 2024. The market is expecting to grow at the rate of 6.0% during the forecast
period between 2019 to 2024 (MarketResearchFuture, 2019), as since 2013, European Union

banned the testing of cosmetics on animals in the countries under the EU law, and following
this, the law was implemented in countries like: Norway, Switzerland, Israel, Turkey or India
(PETA, 2019). With all this, in the U.S., has not been yet banned the beauty products testing
on animals.
Most of the beauty companies rejected the animal tests by taking advantages of non-animal
testing methods, by using the cells and tissue cultures, using the human cells for
reconstructing the skin growth and by computerizing the “structure-active relationship”
models to predict the activity of a chemical (PETA, 2019).
In U.K. these methods was banned since 1998, which means since than is illegal to market
and sell a product if the animal testing were used on the final cosmetic product or used in any
of its ingredients (L’Oréal (2019).
L’Oréal is one of the companies in the world that was included on PETA`s list as the brand is
refusing to adopt company-wide policy on testing on animals for its ingredients and for the
final products, as the cosmetics world leader is keep selling its products in China, under the
law that is requiring to test its products on animals. PETA is trying to urge L’Oréal to join the
list of companies that withdrawn their products from China market, and to stop testing its
cosmetics ingredients on animals.
Part 2. New Product Implementation
According to the Taguchi Concepts, “most quality problems are the result of poor product
and process design.” (Ettlie, 2014)
Starting with 2020, the company is planning to change its packaging, by improving the
environmental and social aspects 100% with the new products.
According to Philippe Thuvien, director of packaging and development at L’Oréal, the
company plan is to replace all the plastic tubes packages with “new bio-based and certified
paper -like material “, in collaboration with Albea and will be Life Cycle Analysis certified,
which is one of the most advanced tool for the multi- criteria aligment of environmental
impact. The plan is to launch this technological solution by April 2020, after finishing all the
testings.
In order to develop new product, it is suggest to use the seven stage of product planning and a
development process which is as mention below:

 Idea Generation: to generate new product, company generate new ideas which
comes from R&D department, analysing the customer need. Thus, The company goal
is to change its plastic packaging’s with rechargeable, refillable, recyclable or
compostable packages by 2025 and all its packages to come from bio-sourced
materials (L’Oréal, 2019)
 Idea Screening: During this stage, the idea is screen down on the basis of their
feasibility and viability and at this stage, company realize that there is a need to
change its plastic packaging’s with rechargeable, refillable, recyclable or compostable
packages
 Concept development: At this stage, new idea is tested and determine whether the
product is feasible or not. Thus, company use Try On” tool, designed special to help
the brand consumers to try all its products online, before purchasing them. The virtual
try-out interface can be easily accessed, on L’Oréal official website and does not need
any other app to be installed. Is available for web browsers and mobiles, and the
ModiFace’s patented facial recognition it is created to help L’Oréal customers to try
over 100 make-up shades, to interact and shop the brand products in very easy way.
 Market strategy development: During the stage, proper marketing strategy is
implemented that helps to introduce the product in market. Therefore, he target
market for this is girls from 18 to 28.
 Product development: In this stage, the product is develop and convert into a
physical stage which means that now company is able to sell the product in market.
 Test Marketing: In this stage, new product is tested within a particular target market
in order to realize that whether people like the product or not. Also, it helps in
presenting the product and marketing plan before launch in a market.
 Commercialization: The product is launch in a market and helps to meet the define
aim and objectives as well. Therefore, through this company may easily attract range
of people and enhance its financial business as well.
Another major innovation that L’Oréal implemented only few months ago, was the “All these
steps are used by L’Oréal as s strategy to enhance the online shopping experience to help the
consumer to get engaged with the brand and its products.

Part 3. Sustainability
To protect the environment, L’Oréal is paying significant attention to its production process,
making from the lifecycle of the products a priority. Environmental safety starts with the raw
material supply that are implemented through the international regulations of the protection
of biodiversity and the manufacturing of synthetic raw materials process are based on the
principles of green chemistry.
Special attention is paid on the aquatic environment, as L’Oréal is producing a big amount of
body and hair products, and after usage from the consumer, the product is considerate as
domestic waste by being discharged into the streams, lakes, and the sea. To avoid this
L’Oréal implemented since 1993 its own ecotoxicology laboratory.
All its raw materials are selected based on the environmental criteria, as biodegradability,
bioaccumulation and ecotoxicity. As a corporate strategy for its sustainability growth,
L’Oréal is using a significant attention to its research and innovation as they refuse to
compromise the quality and safety ingredients of its products. They want to make sure that
the raw materials used for the cosmetics products are not interacting with certain hormone
receptors. In order to do this, L’Oréal is using vitro studies conducted on cells receptors, cell
cultures, and fish eggs used as live materials.
For all its products, the company is following four steps on each production, as following:
- Test of the raw materials: for each product they have a destinated composition of
product that can be used, also the raw material quality is very important in the
production. Every element will be first tested with silico system, vitro tests strategies,
accumulated toxicological, clinical and cosmetic safety monitoring data.
- One of the most important part of its safety assessment is to check the risk that is
coming with the raw materials. The weighting factors can be divided depending on
the exposure of the human body, depending on the product category, the frequency of
production used, and the type of consumers or issues they are destinated for. All these
factors are very important in the production process, as they can determine the level
of ingredients will be used, and the concentration.
- The safety usage of the product confirmation: all the products concentration has 100
times lower than the no-effect dose, as L’Oréal is using different methods on testing
the products and ingredients first before to sign the safety report.

- Marketing product monitoring: the company implemented a cosmetic safety
monitoring network meant to analyse the effects to its products after consumer usage
reporting to the health care professional standards.
For the last ten years, the company made an effort in its innovation to improve the
environmental aspect by its packaging and for 2020 the company developed a strategic plan
for the sustainability that respects contract initiatives, as: to respect the environment, to
reduce the general waste of packaging by using only the optimal components and dimension,
replacing high-impact materials and by promoting circularity.
For L’Oréal, China is one of the biggest markets that reflect in the company acceleration
transformation in the last few years in terms of consumer engagement and the way the
company is selling its products. The effect of digital transformation had a huge impact in the
company growth, having in top the development of e-commence channels and completely
transformed the way the brand is working. The power of digital market helped L’Oréal to
interact with its consumers, to offer them a range of information about the products, to
receive the feedback and to increase its revenue. Now, L’Oréal has over 86.000 employees all
over the world, and they manage to differentiate themselves by its competitors by prioritizing
its people above everything and empowering them to be the entrepreneurs of the organisation.
Being passionate on delivering the unexpected to the people, the brand is one of the Paris
Fashion Week partners and every year, L’Oréal is sharing its mission by bringing the beauty
products to the shows. This generate more than 1.8 billion digital impressions and 50 million
of social media engagements.
Part 4. Recommendations
L’Oréalis one of the most digitally advanced company at the moment and is working on
different initiatives to bring the technology to its beauty products. The brand is keep investing
in digital innovation and its investment and research it’s the highest in the industry at the
moment, but the company should focus its attention on trying to stop selling its products in
China`s market and stop testing its ingredients on animals, as the vegan beauty cosmetics
demand it is in continuously growth for the past few years.
The company is already planning to change its packaging method from 2020, and to replace
the skin and hair care plastic bottles with new biodegradable packaging to protect the
environment and to extend the clientele of its brand. This strategy will attract many new

consumers, as the vegan trend is in continuously growth. The company should focus its
attention on changing the packaging for the make-up products too and not only for the skin
and hair care products.
Part 4. Conclusion:
In the continue increasingly overcrowded market, L’Oréal manage to be competitive and to
be relevant in the market, to keep its position in top of the other beauty and skin care brands,
by being obsessive of delivering superior quality of products.
By using different strategies, and being innovative, using modern technology machines for
the products manufacturing, the brand is managing to stay close to its consumers, and to
differentiate from other brands.
Self- reflection
While I conducting the project, I enhance my current knowledge with regards to the
operation management. Such that I also improve my research skill and then come to know
that models plays an efficient role in the smooth functioning of a business. Earlier I do not
know about the models but when I conducting the project, I realize that I enhance my
knowledge regarding six sigma model and its principles. During my study, I only perform
the theoretical aspect of the model but through this project, I come to realize that models are
the key aspect and assist business to operates its function in positive manner. Also, i realize
that quality of the products also assist the business to perform the function in better manner.
In this project, I use different models such that Six Sigma, New product development
process that helps me to evaluate that without these model, company cannot be operate in
better manner. Also, the project provide my an opportunity to manage my work as per the
define time that clearly reflect that it helps me to improve my time management skills. Along
with this, I also improve my research skill because it was my first project and I do not have
any idea how to research on any specific topic, but with the help of my tutor and teacher, I
perform the work in better manner. Moreover, I also analyse that L’Oreal is the top beauty
company and it did not make sure about the quality of its products then it cause negative
impact upon the brand image. In the same way, I come to know what a quality plays a role in

the success of any company. That is why, this project help me to enhance my current
knowledge with regards to quality, product development, sustainability and their role for the
success of the firm.
In addition to this, the overall experience of the project is so good and memorable
because through this project, I deeply understood the concept of operations, supply chain
management and logistics in a company. Further, I also realize that if I was working in a team
then it will be more beneficial because it provide me more opportunity and I collect my team
members point of view with regards to the specific topic. So, in my future when, I got a
chance to conduct the same project, I try to perform in a team so that it will help to learn
more skills. Hence, the overall project raise my research skill, time management skills,
management skills and organizing skills which will also help me in my future as well. Also, I
realize that I have to work on my communication and team working skills and for that I will
attend training session and start communicating with the team members so that I easily
determine what skills I need to improve. Thus, the overall journey of the project is so good
such that I enhance my professional as well as personal skill in more better way.

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