L'OREAL COSMETICS

L'Oreal Cosmetics

EXECUTIVE SUMMARY2

INTRODUCTION3

ANALYSIS OF THE STRATEGIC POSITION4

EXTERNAL ANALYSIS4

PESTEL ANALYSIS4

PORTERS FIVE FORCES6

INDUSTRY LIFE CYCLE7

INTERNAL ANALYSIS7

STRATEGIC CAPABILITIES7

VRIN ANALYSIS7

VALUE CHAIN ANALYSIS8

SWOT ANALYSIS8

ANALYSIS OF THE STRATEGIC DIRECTION10

STRATEGY CLOCK10

ANSOFF MATRIX11

PORTFOLIO ANALYSIS (BCG)11

CRITICAL EVALUATION OF STRATEGY12

SUITABILITY12

ACCEPTABILITY12

FEASIBILITY12

SUSTAINABILITY13

CONCLUSION AND RECOMMENDATIONS13

REFERENCES14

L'Oreal Cosmetics

EXECUTIVE SUMMARY

The past years have been recorded as successful for L'Oreal cosmetics despite the various challenges it has faced. It has over the years been able to withstand the confrontations and challenges of the economy. This report analyses L'Oreal has an organization that is well known in the cosmetics industry, it helps explain the reason for the success of L'Oreal overtime and the impact of both its internal and external forces on it with relevant frameworks in order to enhance clarity. This report helps to identify the strategic position of L'Oreal with the application of frameworks that explain factors that affect it internally and externally. The most important key factors are government control, economic recession and consumer law. The porter's five forces is also used in this report identify the attractiveness of the industry. This is to help known the strategic position of the company. After carrying out the various analyses, it is recommended that L'Oreal create more room for advertisement, spread their products to underdeveloped countries and invest more on research and innovation in order to stay abreast with the fast changing world.

INTRODUCTION

L'Oreal group established in 1909 is a huge cosmetics company; it is the world's largest cosmetics and beauty Company. It has its registered office in Paris and its head office in the Paris suburb of Clichy, Hauts-de-Seine, France. The company has developed activities in the field of cosmetics and it is known for a century of expertise in cosmetics. Present in 130 countries, it has 27 global brands, over 68 900 employees and has a record of 613 patents filled in 2011 (www.l'oreal.com).

The history of this huge company can be traced to Eugene Scheller, a young French chemist who developed a hair dye formula called the Aureal with its major principle as conduction of researches and innovations in the beauty field, he originally registered the company as “safe hair dye company of France” which grew over time and is now known as L'Oreal (www.l'oreal.com).

The recent top nanotechnology patent-holder in the United States, originally started off with hair colour, L'Oreal later added other cleansing and beauty products. Basically known for hair colour, skin care, sun protection, make up, perfumes, and hair care products, the company is active and renowned in tissue engineering, dermatological and pharmaceutical fields. The accessibility of the products makes it one of consumers most reached products, found in wide varieties of distribution channels; it can be gotten in hair salons, perfumeries, hyper and super markets, health/beauty outlets, pharmacies or through direct mail (www.l'oreal.com).

L'Oreal is a fast growing company as this can be seen in their purchase of The Body Shop for £562 million in March 2006 and its recorded sales of 20.3 billion consolidated sales in 2011. Its famous advertising slogan is “Because I'm worth it” was changed in 2009 to ...