UNIT 32 Business Strategy Assignment Solved - L'Oreal

UNIT 32 BUSINESS
STRATEGY
Table of Contents

INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
1. Analyse PESTLE and SWOT for making strategic planning and an analyses to adopt
organisation cap[abilities............................................................................................................1
2) Competitive environment using Porter's five forces model....................................................5
TASK 2............................................................................................................................................6
3. To evaluate different types of strategic decisions available to an organisation......................6
4. A justification or recommendation for most appropriate growth strategy..............................7
5.Produce a strategic management plan with strategies, objectives and tactics..........................8
CONCLUSION................................................................................................................................9
REFERENCES..............................................................................................................................10

INTRODUCTION
Business strategy is a process in which higher authorities of business make various
decisions to achieve objectives (Acquaah, 2013). It is a strategic plan which is used to design
particular goal or objectives. The purpose of this is to design, arrange and utilize various
organization instruments which help company to make long term growth for business enterprise.
The company that have been mentioned in the report is L'Oreal. It is the world' largest cosmetic
company founded in 1909, it had made various cosmetic products like shampoo, skin care lotion,
sun screen, make up items, perfumes for both men and women etc. It had launched more than
500 brands in all over the world. The company need to examine external and internal analysis
that includes PESTLE, SWOT and Porters five forces model which form a proper strategic
planning. It also evaluates various type of strategic directions, justify and make certain
recommendations for most suitable growth strategies. L'Oreal have to design a definite strategic
management plan for devising perfect business strategy that had been mentioned in above report.
TASK 1
1. Analyse PESTLE and SWOT for making strategic planning and an analyses to adopt
organisation capabilities
External analysis help to determine strengths and weakness of company which
make some competitive advantage in business and internal analysis help to find out the threats
and opportunities (Alsudiri, Al-Karaghouli and Eldabi, 2013). which help organisation to
determine its objectives.
PESTLE analysis-
It refers to a process which is used by marketers to analysis the various factors of
environment which effect the organization. L'Oreal is a famous cosmetic and beauty company in
all over the world which make various merchandise products to meet up the condition of
different customers. L'Oreal need to examine various factors which form complete marketing
strategies in an organisation.
Political
Political factors mean rules, regulations and policies of government of countries where
L'oreal company has been working. This factors includes political stability, government policy,
foreign trade, tax, labour law, trade restrictions. This company has manufacturing in Paris where
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policies and rules of France affect company. As product safety is very important for every
organisation for surviving, L'oreal needs to report ingredients it uses in product while
manufacturing to France's government. This factors impact strategic planning as policies,
regulation of every country differ from each other which affect manufacturing process. The
political factors affects the L'oreal's strategies because if Govt. changed its rules and regulation
within the country then L'oreal also have to change its strategies, and if the Govt. of a country is
stable then it effect the strategies in positive way.
 Opportunities- The taxes are not so much higher which is imposed by Govt. on
cosmetics products so that it is vital opportunity for the organization to expand its
business with making huge revenue..
 Threats- If government suddenly change their policies regarding cosmetic products, then
L'Oreal has to face threat. If product is not as per standard set by government then it has
to bear huge loss for already manufactured products.
Economic
It means performance of economy which impacts company having long term effects. It
includes inflation, interest rate, economic growth, foreign exchange and others. The recession is
major elements which up-bring cosmetic organisation. Price of products vary from region to
region due to imposing of tax (Bharadwaj and et. al., 2013). The states which are developed
having high human development index contribute more to branded products like L'oreal. The
economic factors also impact the L'oreal strategies as well such as if it develop a strategy to
expand its business in another country, where human development index is not so high then it
have to change its strategy regarding producing products at cheap rate.
 Opportunities- If GDP rise, the purchasing power of consumer also increases which
leads to enhancement of sales which is biggest opportunity for L'Oreal.
 Threats- The decrease in value of dollar and other currencies leads to threat for L'Oreal.
Social
Social factors mean value, belief, opinion and characteristics of consumer (Chang, 2016).
It is the trends where people of society prefer new and latest products. Due to need and demand
of people, L’Oréal’s always do innovations in their products and supply high quality. If L’Oréal
does not focus on supplying high quality and innovation then it has to vanish from market. In this
way, social factors impact organisation and its sustainability. The social factors also influence
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