Challenges Faced by L'Oreal: Impact of Macro Environment, Organizational Culture, and Acquisition of Body Shop

Context of Business
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Contents
INTRODUCTION................................................................................................................................3
MAIN BODY......................................................................................................................................3
TASK 1..........................................................................................................................................3
TASK 2..........................................................................................................................................4
TASK 3..........................................................................................................................................5
TASK 4..........................................................................................................................................6
TASK 5..........................................................................................................................................7
CONCLUSION....................................................................................................................................7
REFERENCES.....................................................................................................................................8
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INTRODUCTION
L’Oreal is a cosmetic company which was founded in the year 1909 by Eugene
Schueller, the company has its headquarter in France and they offer their product all over the
world. The company has reported an operating income of 4.92 billion euros in the year
2018.Body shop is also a cosmetic company which was founded in the year 1976 by Anita
Roddick, the company has its headquarter in United Kingdom with its product being offered in
around 33 countries, the company reported a revenue of $1.4 billion. The company was being
sold by L’Oreal to Natura Cosmetics in the year 2017. In this report, the different challenges are
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being discussed which are faced by the company. This report comprehensively results in
different learning outcomes.
MAIN BODY
1.Discuss the impact macro environment had on the current situation faced by L’Oreal
particularly the Social, and Ethical factors
For analysing the social factors a PESTLE analysis have been performed below.
Political factors
These are the factors which can affect the company’s profit in the long run as these involve the
factors like political stability, employment laws and regulation related to the cosmetic industry,
tax policies of the government etc., if these changes L’Oreal would also have to change their way
of working so the company need to analyze these before diversifying their business in any
region. The political stability is a must as the company will find a lot of problem if there is an
unstable government operating in the country.
Economic factors
These are the factors which can impact the company’s way of performing their operation. These
include both micro as well as macro economic factors which can affect the L’Oreal. The factors
affecting L’Oreal are interest rates, inflation rates, exchange rates etc., the company need to be
updated with these factors in order for the smooth working of the company as these factors
changes the purchasing power of the buyer in the company. These economic factors affect the
way in which the company prices their product and services.
Social factors
These are the factors which are majorly affecting the operations of L’Oreal currently. These
factors include demographic characteristics, norms, customs and values of the people of L’Oreal.
These social factors also include any unethical behavior of the company. The company is already
facing some issues like they are being accused of using child labor, which has likely affected the
brand image if the company. The company must maintain these factors as they may affect the
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