Context of Business: L'Oréal's Acquisition of The Body Shop - A Report

This report provides a comprehensive analysis of the L'Oréal acquisition of The Body Shop. It begins with an introduction to the business context, followed by a discussion of the impact of the macro-environment, specifically social and ethical factors, on L'Oréal's operations. The report then explores the organizational cultures of both Body Shop and L'Oréal, assessing their compatibility and potential benefits and challenges. It delves into the factors L'Oréal considered before the acquisition and examines the reasons behind the perceived failure of the acquisition. The analysis considers costs, cultural fit, alignment of goals and objectives, and competitive factors. The report also reflects on the author's experience in writing the report. The report uses academic sources to support its arguments and provides a well-structured, insightful examination of the case study.

Context Of Business
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Table of Contents
INTRODUCTION ..........................................................................................................................3
TASKS.............................................................................................................................................4
Discuss the impact macro environment had on the current situation faced by L’Oréal
particularly the Social, and Ethical factors.................................................................................4
What is the organizational culture at Body Shop and L’Oreal. In your view are they
compatible and what are the likely benefits or challenges arising out of the compatibility of
culture. ........................................................................................................................................5
Discuss any factors that L’Oreal would have considered before deciding to acquire Body
Shop.............................................................................................................................................6
In your view what are the factors that had effect the L’Oreal acquisition of Body Shop
resulting it the failure..................................................................................................................7
The second part of the project will involve writing a reflection report on your experience in
writing this report........................................................................................................................8
CONCLUSION ...............................................................................................................................9
REFERENCES .............................................................................................................................10
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INTRODUCTION
Business is an art as well as science which is the subject matter of practical experience,
judgement and foresight to gain potential outcomes. To remain successful in business, an
individual have to be master in business and related activities for gaining potential outcomes in
positive manner. Respective assignment based on the L'Oréal which is an French Personal care
company headquarter is in Cliché. It is world's largest cosmetic company and developed various
activities in field of hair colour, skin care and many more. Respective report is based on a case
study of L'Oréal which accused in no. of unethical practices which hinders self interest in
achieving desirable objectives. Further it discussed the organisational culture and impact of
macro environment had on their current situation. In addition to various factors that an
organisation considered while before deciding to acquire some other company.
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TASKS
Discuss the impact macro environment had on the current situation faced by L’Oréal particularly
the Social, and Ethical factors.
Macro environment is one of most important condition that existed for the whole
economy at wider level instead for the particular region or sector. In macro environment
includes the GDP, inflation and employment and spending that affect on their business and
various factors associated with it (Crane and et.al ., 2019). In context of L’Oreal they while
acquire the other business known as The body shop that inflicted with kind of malpractices such
as airbrushing advertisements, misleading claims and information, testing of animals and fixing
of prices that directly affect on business works and practices in negative way. In order to there
are some factors that affect on their business plans and procedures to gain optimum kinds of
outcomes to gain competitive advantage that are as follows:
Social factors:
In social factors consist of the factors such as change in taste and preferences of
consumers and other deliverable that directly influence on business works and procedures. In
context of L’Oreal while they associated with the The body shop to enlarge their business
opportunities after conducting the through research and development such as acknowledge the
potential outcomes, that plays very much crucial role (Crane, Matten and Spence, 2019). After
aligning goals and objectives with the Body shop organization affect the self interest in order to
achieve desirable results. In social factors consist of the technical trends in society as modern
world majorly interested towards the fashion trends in the products and services acquired by
respective organization. The consumers who possess the sense of latest tools and technology and
always eager to adopt the tools that are eco friendly in nature in order to remain always
competitive in marketplace. There are some kinds of ethical issues that face by the people of
society that consider as an holy sin to use such sorts of ingredients in order to gain potential
outcomes from them (Nascimento And et.al ., 2019.). All kinds of social and ethical trends plays
very crucial role in context of respective organization in order to remain always competitive in
marketplace.
Ethical considerations:
L’Oréal is one of the World's leading beauty company, a global leader by defining and
advancing the standards of ethical business practices. Respective activities plays very much
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crucial role in maintaining positive image before consumers. The behavior of company is one of
most important aspect for its economic performance or quality of products. By building strong
kind of ethical principles which guide them for their development and contributes towards their
building of brand image. With the help of such practices named as integrity, respect, change,
transparency and social and societal responsibilities are one of crucial factors. But after aligning
with the Body shop that involved in some kind of malpractices that not only hinders the image of
L’Oréal but also Body shop to hinders the positive image in front of consumers. Both the factors
which discussed above hinders the self interest of organization in order to achieve their goals and
objectives in positive manner. In order to compete with respective factor L’Oréal have to devote
their money and time in CSR activities as they already pioneer in respective field to combat
against such kind of activities.
As they devote most of there efforts in CSR activities so it takes less time to overcome
from the negative effect after aligning from The body shop that activated in malpractices (Dwyer
and Hopwood, 2019.). Hence from the above discussion it has been summarized that for an
organization it is very much crucial to build products and services that are consumer oriented and
enhance in their value. By accessing social and ethical considerations in positive manner an
organization can give one of their best efforts to serve in best way to their consumers.
What is the organizational culture at Body Shop and L’Oreal. In your view are they compatible
and what are the likely benefits or challenges arising out of the compatibility of culture.
Organizational culture includes the organizational expectations, experiences and
philosophy with values that helps to guide others behavior and expressed in members in form of
self image, their working patterns and interaction with outer world. In context of L’Oreal they
operate in various nations in simultaneously so they hire various people from various
backgrounds that helps to bring competency level within organization in order to remain
competitive in business environment (L’Oreal 2017 Annual report, 2017). They by encouraging
workers to become the active participants within the group to bring best culture and enables to
evolved it in proper manner. Respective kind of shared values is one of key in context of
respective organization able to attract and retain one of best employees. In context of respective
organization human relations are also accountable for the daily experience by line with values
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they uphold. They put efforts to make sure that values reflected in the people's actions or in
activities, by framing the document penned as Life@L'Oreal in order to communicate the culture
in an organization in structured form. So it can be said that respective organization compatible in
nature as they build positive work culture by greet all people from various cultural background in
order to reap important outcomes such as cultural diversity that it enhance productivity of
employees within the organization as people come various backgrounds full of unique thought
and its process helps to give new ideas to business in its progress.
On other hand the cultural scenario of Body shop they work with the mission statement “
To dedicate the business efforts in pursuit of social and environmental changes”. They adopt
people from differ culture as it bring positive work culture within organization in order to gain
potential outcomes (Pirson, Martin and Parmar, 2019.). They activate self esteem and
confidence as they encourage people to portray vigor, energy and attitude in oneself by embrace
their own style and self worth so that they remain always motivated and enthusiastic in order to
given one of their best efforts in positive manner. They treat women with respect and
empowering them to boost their confidence level that supports or assist the value in order to gain
potential outcomes. Respective works and activities proved beneficial for organization as they
are compatible with nature to enhance values, attitudes and retention rate that helps in gaining
competitive advantage.
Discuss any factors that L’Oreal would have considered before deciding to acquire Body Shop.
For an organization it is very much essential to keep an keen eye on some important
factors before acquire a firm. In context of L’Oreal they would have to consider some of crucial
attributes while acquire Body shop that are as follows:
Costs:
for an organization while acquire some another firm there are different cost associated
with the acquiring process, it is very much essential to find out ways to make or generate the
profit or any kind of investment cost associated with project in order to gain potential outcomes
(Viriyasitavat and Hoonsopon, 2019). The body shop agreed to a £652.3m take over by french
Cosmetics firm L’Oreal. There are some kind of additional cost associated with the acquisition
process that are £130m by sale of retail chain that promotes natural products in against animal
testing.
A good match:
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The another important factor which is a good match, for an organization it is very much
potential to gain potential knowledge about acquiring firm have its own way of doing things or
attributes. In context of L’Oreal they conduct through research and development before acquire
a firm in order to reap important results. In context of Body shop they found that it is specialized
in the major sectors of cosmetics such as skin care and perfume similarly L’Oreal also deals in
same field in order to respective activities proved beneficial for organization in right kind of
decision making.
Goals and objectives:
Goals and objectives plays very much crucial role, in the process of acquisition to match
and build goals by combining self interest of both the organization before making acquisition. In
context of L’Oreal their major goal is to enlarge or extend their business works and activities in
positive manner. It is very much crucial that each and every company is on same page and they
mesh their goals and objectives with each other in proper manner. Such as in context of L’Oreal
they align their goals and objectives in order to gain potential outcomes in positive way.
Competition:
Competition is one of most important factor for an organization in order to make business
activities in successful manner (Sousa and Rocha, 2019). Firstly organization have to find out
the potential acquisition competitor or will be in future. So competency level of other
organization helps to acquiring firm rare kind of advantages in positive manner such as other
firm can positively add some kind of value in it by associated name of relative firm. In context of
Body shop they are strong brand name and registered in IPO and they have strong team to
running the business and related activities in order to gain potential outcomes (Van Diermen,
2019. ). As their owners are creative inspiration that create a distinctive value in organizational
growth and enhancement in positive manner.
In your view what are the factors that had effect the L’Oreal acquisition of Body Shop resulting
it the failure.
The body shop which founded in 1976 a British environmental activist and campaigner or
human rights that always give one of their best efforts in producing the natural ingredients for
gaining the sustainable personal care products that free from animal testing. In Body shop they
grew towards the one of most well known brand name in High Street brands which was popular
in between the ethically conscious consumers who always follow the ethical and sustainable
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considerations in order to remain always competitive in business environment (Werhane, 2019.).
In year 2006 respective company announced to sell their company and rights to other company
L’Oreal which is the French cosmetic company majorly allegedly aligned with animal testing,
airbrushing advertisements, misleading claims and price fixing. All respective factors hinders
the organizational image and patronage in among customers in order to gain potential outcomes.
There are some kinds of other factors too that related to not gaining potential outcomes such as
increase in level of competition and lack of innovation that are major reasons cited behind the
downward trend. By affecting from all these respective factor that not only affect on their
profitability and brand value but also on their competitive power also. In year 2017 respective
organization announced that they sell the rights of the Body shop to the recognized Brazil's
leading company Natura Cosmeticos SA in order to gain again previous stage of working and
profitability.
The major negative effect on their image that today's consumer base is very much aware about
the environment and always prefer products that are eco friendly in nature (Dellermann, Lipusch,
Ebel and Leimeister, 2019.). So it is very much potential for an organization to build products as
per the consumer self interest by giving one of most fruitful products that not harm an individual
sentiments and protect their self interest. So it has been evaluated that for an organization it is
very much obligatory to build products and services that proved beneficial in satisfying their
present as well as emerging needs in proper manner.
The second part of the project will involve writing a reflection report on your experience in
writing this report.
Each and every individual activity in life give some sort of positive as well as negative
experiences that helps to improve the performance in better manner. While framing and gather
important information to collection of necessary information to build a attractive report I found
that company of other person or company plays very much crucial role. Company directly affect
on the lives of others in both positive and negative way. In context of L’Oreal which acquire the
Body shop in order to gain sustainability and growth but some hindrances spoil their image that
appear due to the adaptation of some kinds of malpractices. So personal experience is to verify
each and every aspect and organization not have to put efforts in any kind of activities that
hinders their brand image. Respective report give me ample of knowledge in respect of acquire
some other organization, their strategies and aspects that required to focus on development and
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enhancement in positive manner. While conducting the respective report I face some kinds of
issues or concerns that hinders self interest in giving one of the best efforts such as after
spending too much time and resources I found some sort of information that relatively costly and
time consuming process. Further it elaborated that there are some organization which majorly
contributed in ethical and legal activities that proved beneficial for them in order to reap
important outcomes in positive manner. So while report a project it is very much essential to
write down all major aspects and elaborate in detailed manner so that each and every aspect
should be discussed in positive manner.
CONCLUSION
From the above report it has been summarized that business and related activities plays
very crucial role in organisational development and enhancement in positive manner. By taking
key considerations in respect of social and ethical activities they can gain potential outcomes in
positive manner. For an organisation to grow in successful way plays very crucial role for that
there are various options available in order to reap important outcomes to gain potential
outcomes. To gain potential outcomes it is very much essential to analyse each and every aspect
associated with the project so that any kind of discrepancy should be eliminated in proper way.
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REFERENCES
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Crane, A., Matten, D. and Spence, L. eds., 2019. Corporate social responsibility: Readings and
cases in a global context. Routledge.
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intelligence decision support system for business model validation. Electronic
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Research. 94. pp.257-263.
Van Diermen, P., 2019. Small business in Indonesia. Routledge.
Viriyasitavat, W. and Hoonsopon, D., 2019. Blockchain characteristics and consensus in modern
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Online:
L’Oreal 2017 Annual report, 2017. [Online]. Available through. <https://www.loreal-
finance.com/en/annual-report-2017/human-relations/corporate-culture>.
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