Analysis of Loreal's International Business Strategy and Growth

This report provides a comprehensive analysis of Loreal's international business strategy, focusing on its growth, key milestones, geographical development, and changes in primary and secondary value chain activities. It evaluates the advantages of the company's current internationalization strategies, particularly universalization, and identifies potential threats and risks, such as reputation, economic, and compliance risks, suggesting effective mitigation strategies. The report also assesses the literature and data sources used, concluding that Loreal is a goal-oriented and future-centric company that must continue to adapt to changing consumer needs and market dynamics, while also planning for unpredictable events and maintaining product quality. Desklib offers a variety of resources, including past papers and solved assignments, to support students in their academic pursuits.

INTERNATIONAL
BUSINESS AND
STRATEGY

Table of Contents
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Critically evaluate:.......................................................................................................................3
a. Explain Loreal's international growth and its motivation...................................................3
b. Evaluate key milestone responsible for international growth and brand acquisition and
critically examine company's geographical working and its development with time............4
c. Explain changes observed in company's primary and secondary value chain activities....4
d. Assess advantages of current internationalisation strategies being adapted by organisation. 5
2. Explain potential threats and risks that Loreal company might counter in near future.
Suggest effective ways to deal with such issues....................................................................6
3. Evaluate literature and data sources...................................................................................7
CONCLUSION ...............................................................................................................................7
REFERENCES................................................................................................................................8

INTRODUCTION
The report prepared below explains international concept that is designed as a process for
preparing products in such a way that it could be consumed across multiple territories in context
of Loreal company (Tarhini and et.al., 2019). It is helpful for expanding their domestic scale
market on international level. It helps to understand that consumers that are linked with the
company abroad may have different taste and preferences thus for understanding such demands,
internationalisation concept is helpful. It also underlies an idea about key milestone contributing
in the growth and brand acquisition. Therefore, helps to assess company's geographical presence,
evaluate changes observed in primary and secondary value chain activities. It helps to understand
benefits involved in current international strategy which is adopted by organisation. The report
further gives an idea about potential risk and threats involved in supply chain disruption,
competitive pressure and current pandemic pressure as well (Akbar and Kisilowski, 2018).
MAIN BODY
1. Critically evaluate:
a. Explain Loreal's international growth and its motivation.
The concept of internationalisation can be explained as a process to develop a product in
a way that it can be consumed across the globe in different countries. International growth of a
company can be explained as a process that is used for expanding their global steps beyond their
domestic scale market. International process can be explained as beginning of producing goods
and delivering services from one or more nations by Loreal. It also explains setting up of
division and subsidiaries in other territories (Shaver, 2020).
Growth motivation strategies can be explained as strategies that help to facilitate growth
and expansion of Loreal company. It helps to find different ways that would help business to
grow on international levels. Some models that can be explained which would be helpful for
working of business are:
Uppsala model: It is a measure that helps to predict that the changes observed in Loreal's
internationalisation process takes place because of committing/non committing resources and
alteration observed due to modification in consistency maintained in knowledge development
process with the help of building trust, learning and creating expected demand. It also deals in

finding effective ways for entering in new market areas which is closer or to invest in one
country than to make complex investment which are hard to handle. It explains that businesses
can use their past experiences and practical knowledge as well.
OLI paradigm: OlI paradigm strategy explains that every organisation whether small,
medium or large requires to understand the importance of Ownership, Location and
internationalisation advantage. It would help Loreal to successfully get engaged in foreign direct
investment related activities. It can be explained as a three tiered assessment framework which is
followed by organisations when making an effort to find out whether it is profitable to engage in
foreign direct investment (Bhattacharya and Momaya, 2021).
b. Evaluate key milestone responsible for international growth and brand acquisition and
critically examine company's geographical working and its development with time.
There are many key milestone that can be held liable for growth and development of
market image such as quality of team, innovative ideas, power of the brand. Loreal has expanded
its geographical areas i.e. went on to national and internationals markets with time and succeeded
in becoming a brand that every person demands of. The company has focused on reaching out
people from various countries over the globe, it also prioritize on income levels of clients and
develops products accordingly, It focuses on giving reliable products that a person in searching
for and would be highly satisfied after the consumption (Rua, 2018).
It can further be explained In context of Loreal company its two strengths that serves as
milestones such as Flexibility and adaptability. In economic terms the company treats tapping
more and more globalised customers as human asset. It is quick in positioning their teams that
deals ion making human relations, work on research and marketing, increase sales and respond to
needs and demands of market.
c. Explain changes observed in company's primary and secondary value chain activities.
There are many activities that contribute in adding values to company such as primary
activities including operations, services, technological development, marketing and sales.
Whereas secondary activities include human resource management, procurement and firm's
infrastructure.
Primary activities can be explained as functions that are to be performed by Loreal
organisation at initial levels such as conversion of raw materials into finished products, services
concentrate on providing guidance to its customer's if they feel any improvement can be made. It

can be described as activities that help in development of brand and creating advertisements
which reflect visibility, to reach people present in market and provide valid reasons for
purchasing products and services (Cao, Chen and Lee, 2022).
In case of secondary activities It includes development of technical terms and choosing
the best technology that can help to produce desired results expected from Loreal company. It
keeps the useful data secure and facilitate research & development. Further it contributes
managing human capital that includes hiring of potential employees, training them if they lack
any skill important for better functioning of company, it also helps to build and maintain culture
of organisation and maintain positive relationships between employees. It is necessary for
company to perform operations such as legal, administrative, accounting, building public
relations and general management as well. It also focuses on searching new vendors, maintaining
their relationships and negotiating rates for activities to import the necessary material and
resources for development of product or any service (McConnell, 2020).
Changes observed in case of value chain activities is supply chain management and
developing the method of delivery that is through E- commerce. It can be explained such as
situations that reduces use of plastic in the firm and use resources in a effective & efficient
manner. It also defines the ways through which the demand and supply can be increased that in
return would also increase sale of goods as well. With the help of E- commerce it is more easy to
reach customers on time with maintaining quality. It also focus on delivering products according
to changing demands and situations of people present in different areas. It focuses on improving
innovative ideas and techniques, passion among employees to complete work. Therefore, Loreal
uses unique strategies that helps to work according to changing cultures, desires, traditions needs
of consumers.
d. Assess advantages of current internationalisation strategies being adapted by organisation.
Current strategy that is being adopted by Loreal company is Universalization that
explains that it is important to acquire, understand and respect the variation among demand
prevailing in the economy. It is designed in such a way that would help to meet expectations of
customers over the globe. There are certain advantages associated with such strategies such as:
It ensures that customer's are served well on time and they appoint local teams that would
cover domestic market too. It thus means producing and delivering cosmetic products according
to the taste and preferences of people present in market. It provides guidance such as how to

reach customers on each level whether local, national or international. It helps to develop a
network worldwide that would help to increase availability and understand different culture and
tradition being followed in different areas (Falcão and et.al., 2020).
Another advantage is that it keeps itself updated according to the dynamic environment.
It further helps to search and analyse needs of customers and also what is being offered by
competitor's. It therefore develops its product that are not harmful and are affordable as
compared to other working in market.
It provides guidance as how products must be positioned, how the market must be
targeted and the way market is required to be segmented. It identifies potential buyers that can be
counted to be an asset and enlarge their distribution channels. It is helpful to develop team that
would help to build product for international level which would help to root demands. It is useful
to understand complexities that would assess in innovation and tap market accordingly
(Kustiningsih and Tjahjadi, 2020).
2. Explain potential threats and risks that Loreal company might counter in near future. Suggest
effective ways to deal with such issues.
Potential threats and risks that Loreal may counter are Reputation risk, Economic risk and
compliance risks. Such risks are necessary to deal with in time or would start affecting the
company's profitability and growth. Reputation risk can be explained as threat surrounding the
company related to adversely affecting the company's market image. Economic risk can be
explained as lack of funds available to carry out futuristic operations and developing any new
product. Compliance risk can be related to what is being demanded by customer and how its
wants & demand be fulfilled so that they remain connected towards company. There are many
effective methods that would help to control risk such as Risk mitigation and Risk transfer.
Risk mitigation can be explained as a tool that helps to reduce risk through proper
research, planning and implementing such decisions for effective results. It is to solve problem
the moment it occurs so that it doesn't incur huge losses and doesn't disturb the functioning of
company.
Risk transfer can be described as a technique that helps Loreal company to assure that it
can minimize the risk by securing the firm through insurance by paying a premium amount. It
helps organisation to work keeping less burden over itself and reduce impact (Gu, Cao and
Wang, 2019).

3. Evaluate literature and data sources.
As per above findings, I have reached to a conclusion that states Loreal company is
performing well and is goal oriented as well as future centric. It is observed that the strategy used
by the organisation is universalisation that considers that every customer is important and the
company shall work on local as well as global scale. It is important for the company to analyse
the needs, wants and expectations of potential customer present in the environment. It thus works
on changing requirement of taste and preferences of consumer present in market who wants
something innovative and different.
According to me it must work on engaging more customers from every level and
developing products according to various income class. It must expand its market in other
countries as well that would help to increase demand and sales as well. It must also plan funds in
advance for unpredictable situations such as one observed as COVID -19. It is necessary for the
organisation to implement value chain activities properly and focus on maintaining reliability
and improving quality of products over time.
CONCLUSION
From the above prepared report it can be explained that how internationalisation concept
is helpful for the company working in a dynamic environment. It also provides an idea about
strategies that would facilitate growth and expansion in economy. This report would provide an
idea as how primary and secondary value chain activities would be helpful for a organisation in
long run. There are many advantages explained that are related to current international strategy
and importance of global local universalization. It also provides guidance against potential
threats and risks that affect supply chain of firm and what are the possible ways that would help
to overcome such problems.

REFERENCES
Books and Journals
Akbar, Y.H. and Kisilowski, M., 2018. Lessons in nonmarket strategy from Eastern Europe and
Central Asia: moving beyond the ‘compared to what’question. In Comparative
Capitalism and the Transitional Periphery. Edward Elgar Publishing.
Bhattacharya, S. and Momaya, K.S., 2021. Actionable strategy framework for digital
transformation in AECO industry. Engineering, Construction and Architectural
Management.
Cao, Z., Chen, S.X. and Lee, E., 2022. Does business strategy influence interfirm financing?
Evidence from trade credit. Journal of Business Research. 141. pp.495-511.
Falcão and et.al., 2020. Stakeholder management: the new role of business diplomacy. Journal of
Business Strategy.
Gu, V.C., Cao, R.Q. and Wang, J., 2019. Foreign ownership and performance: mediating and
moderating effects. Review of International Business and Strategy.
Kustiningsih, N. and Tjahjadi, B., 2020. Mediating effect of business process performance on
innovation strategy-cost performance relationship: case study of manufacturing industry
in East Java Province, Indonesia. International Journal of Business Performance
Management. 21(3). pp.346-362.
McConnell, L., 2020. Opportunity and impasse: social change and the limits of international
legal strategy. International Theory. pp.1-32.
Rua, O.L., 2018. From intangible resources to export performance: exploring the mediating
effect of absorptive capabilities and innovation. Review of International Business and
Strategy.
Shaver, J.M., 2020. Causal identification through a cumulative body of research in the study of
strategy and organizations. Journal of Management. 46(7). pp.1244-1256.
Tarhini and et.al., 2019. An analysis of the factors affecting mobile commerce adoption in
developing countries: Towards an integrated model. Review of International Business
and Strategy.