L’Oréal And It’s Strategy Analysis Essay

IntroductionLOral is the corporation that I choose to be discussed. The reason why I choose this company is because they ar the world leading cosmetic and beauty products company and they have a strong strategy for me to discuss on. LOral is a cosmetics and beauty products company and it was founded at Clichy, France in 1909. Eugne Schueller is the founder of the company, who became an instructor at the Sorbonne after completed his study in the Institute for Applied Chemistry in Paris. LOral was primarily named as Socit Francaise stilbestrol Teintures Inoffensives pour Cheveux which means French Society for Inoffensive Tincture of Hair. It is a French based company which headquartered in Paris. There are over cxxx countries operating this company uniform South and North America, Africa and Middle East, Europe, Asia and others, with up to 25 international brands. The international brands under LOral imply LOral Professional, Lancme Paris, Kiehls, Shu Uemura, Krastase and others.P roduction and marketing is the main scopes that focus by the company beside the dermatological and pharmaceutical fields. They are much narrow on fuzz colours, skin care, fragrances and perfumes, cosmetic products and styling products which are specially created for individual and professional customers. They as well came out with kids products which are known as LOral Kids. The research team of LOral was first started with only 3 chemists only it is now expanded to nearly 2000 chemists. Now, there are five research and development centre of LOral globally. LOral have a slogan of Because were price it, which is also their vision statement. The reason why they have this vision is because of building a good customer relationship is what the company priority concern.This is to provide consumers with more than satisfied products by the companys lifestyle and philosophy. LOral believes that everyone aspires to beauty. This is where they come out with their mission statement and made the vocation more meaningful and valuable. They wish to help everyone in the world, no matter male or female, get knows to their own aspiration and fully acquit their personalities. LOral is the worlds leading cosmetics and beauty products company. Previously, Procter & Gamble was at the top ranking in this perseverance.By the substantive focus in LOral, they are capable in targeting on more investment in Research and Development as well as advertising. Through the investment, it also enables the company become apowerful force within the industry. In additional, LOral also became the worlds biggest supplier for cosmetic products which hold over 19% market shares. By contrast, the company that ranked second, which is the Este Lauder was quite far distant from LOral as it occupied only 8%. With the help of cutting-edge technology, LOral also took a strong pace in the entering of their skin care products.Strategic AnalysisSWOT Analysis of LOralStrengthsThe main strength of LOral is to purport the best products to their customers by continually conducting strong and new research, innovation and development in the concept of beauty. They are also leading the beauty and cosmetic industry with this type of research strategy, even in the competition market. Besides, LOral situated more consideration in their specific actions and events. Their actions and events basically leave alone be divided into five groups and the consumer product division as the main. In consumer product division, all their scopes are published through a gigantic market. secondly is their luxury product division that included international brands.These products can get it through perfumeries, department outlet and duty free outlets. The next is their expert hair care items utilized by the expert beauticians and market through hair salon. This has been categorized into the professional product division and this division helps to keep up the record of Loreal Group. Other than that, another ability of LOral is about their advertising strategy that being the key element toward the growth of the company. end-to-end accomplishing the nature of their target market promotes through advertisement is the most ideal way.WeaknessesDispersible of the hierarchical structure within a company is the greatest shortcoming which is normally set about by most of the organization including LOral. On account of the numerous subdivisions of LOral make it harder to run and keep back by the company. Thus, as a result of this, the manufactures of organization become more inefficient. another(prenominal) weakness which the organization confronts is that their profits. The margin between theircost price and fling cost is relatively lower than their other minor rivals. Thus, the profit they earn is diverse from their expectation. This is likewise happening in extensive advertisement and marketing. Last but not least, LOrals multinational promoting strategy is also their weakness. The reason why is become their shortcoming is mainly due to a few distinctions happened in the promotion and campaign of LOral products, in the matter of what kind of image they are trying to present.OpportunitiesLOral Group targeted on providing beauty and makeup products for different age levels of ladies. The constant market demand on these beauty products had allow LOral to take the opportunity to focus on their areas of expertise, especially on their hair styling and colour, fragrance and perfume, cosmetics and skin cares. LOral appeared with a known and familiar image around the world even in those developing countries. This company acts as the pioneer brand in the industry as well. Another open door for the organization is that they obtained a lot of market share because of numerous registered patents by LOral.ThreatsFor LOral, the greatest bane they commonly meet is that they need to confront with competitions among the same industry. Because their products continue to increase with , and indeed this may cause other brands took LOral reward of their profits. Besides, different economic conditions can also pose a threat to LOral. Since the greater parts of the products are just inside the background of the populace of developed nations yet in some way LOral takes care of this issue. Moreover, they produce products for the populace of under developed nations. In this manner, although the public do not think that LOrals products are daily inevitably, and it may be accompanied rejection, but the company is still in the best production lines to produce their products.Porters Five Force Model of LOralRivalry among the combative firms (High)Various companies competitiveness, for example Proctor and Gamble, Avon, Estee Lauder and Shiseido push LOral into the more elevated amount of rivalry in the current business of cosmetic and skin care products. Thesecontenders attempt to increase more market shares by keeping implement various strategies. LOral needs nonstop q uality enhancements for every production line in order to guarantee survival of this company in the industry. They must enhance their marketing take with the assistance of highest technology and innovation to obtain more market share and globally targeted their market.Potential Entrants (Low)It can be considered very low in the battle of potential entrants into this moderate industry. The market already exists with strong company like Estee Lauder, Avon, Olay, Proctor and Gamble, as well as LOral. This is very diaphanous that, there will be no serious threat or maybe little threat from any beginner of the business. LOral does not appear to have such a tremendous risk from any potential entrants.Potential Developments of Substitutes (Low)Aging is the main reason why bulk around the world need skin cares. As a leader in cosmetic and beauty sector, LOral seem like does not disturb by any potential substitute that come into the market. In additional, there is less substitution in th e anti-aging products and so, it brings less threat to the market. negotiate Power of Suppliers (LOW)LOral in the profession is a giant, has the huge capacity that their production is exceeding 45 billion units every year, and therefore the supplier will have little opportunity to pose the enormous threat to LOral. It is huge in world the quantity of supplier. so the supplier has few or simply does not have the ability to bargain with LOral. Therefore, LOral not faced with too many threats from its supplier.Bargaining Power of Customers (High)The appearances of numerous powerful competitors like Procter & Gamble, Shiseido, Avon and other companies cause higher bargaining power of customer in the market. Because the usability of different companys different products are high, the potential customer has the choice to go for other companies. Therefore, LOral faced with threat of want of customer. In this situation, LOral must deal with this threat earnestly, as to maintain themarket share of this company in profession.