Strategic Management, L'Oreal

Résumé du document

L'Oreal is a French-based company specialized in the development, manufacture and marketing of cosmetics and dermatological products.

Created in 1907 by Eugene Schueller, the brand has considerably developed itself in a highly competitive market with constant change. L'Oreal has succeeded in establishing itself as a leader on its market.

But the question that we need to ask ourselves is whether L'Oreal can continue as the market leader forever. And what are the different decisions and actions that can be undertaken by the company to maintain its top spot?

In this case, strategic management has an important place as it is " that set of managerial decisions and actions that determines the long-run performance of a corporation " .

To understand how L'Oreal could manage to stay as the leader in its market, we will develop different levels of analysis that will enable us to propose several recommendations to maintain the positioning of the company.

Extraits

[...] The growth of the turnover between 2005 and 2006 has been + in this area. Supported by the different launch of all the brands of the company, all the countries of this sector have realized positive results between these 2 years (2005 2006). North America The North American turnover has been in progression of + between 2005 and 2006. In a context of development of their distribution channels, the different divisions of the company have pursued their development. L'Oreal has won significant market shares in different sectors: mass market makeup, skin care and perfumes. [...]

[...] The factory implementation of the company is also worldwide. L'Oreal has 40 factories around the world and each of them has a particular specialization. Not only does this ensure better coordination between the production and the distribution but also enhances response to customers' demands The key factor of success of the brand The overview of the company that we just have developed will now allow us to highlight the main key factor of success of the company: - L'Oreal has high R&D expenditure; marketing expenses represent about 30% of annual sales, which is quite high for the sector. [...]

[...] Therefore, L'Oreal's objective is to gain market share in these markets. Even if the group is already well established in these markets, L'Oreal has to improve its standing as it is a very competitive market. Unlike the mature markets, the emerging markets have a much more chaotic organization. Indeed, there are numerous competitors from different backgrounds. Therefore, L'Oreal finds itself pitted against highly competitive national companies with positive brand images. The company should then develop these emerging markets more quickly than other big competitors like P&G or Beiersdorf. [...]

[...] Strategy formulation 1. Mission and objectives The main objective for the company is to maintain its market leadership without losing speed on the North American and Western European market and developing its market in new sectors (seniors and men's articles, emerging markets) Strategy: SFAS To achieve this objective, we can develop an SFAS (Strategic Analysis Summary) using the main factors from IFAS and EFAS. This will enable us to become familiar with the intricate details of the company's functioning. One of the main issues faced by the company is the fact that it operates mainly in two mature markets: North America and Western Europe. [...]

[...] - Strategic acquisitions: after acquiring The Body Shop in 2006, and a number of other smaller companies, the group recently acquired Yves Saint Laurent Beaute from PPR, a perfume and cosmetics company. - Focus on cost efficiency: a major objective of the company is to constantly improve its different cost positions without having to resort to major restructuring. The group has raw material and packaging costs efficiency, limiting the group to the different market swings. The group has concentrated its supplier base by harmonizing its product portfolio External environmental analysis 6. L'Oreal's competitors L'Oreal is positioned in a highly competitive market and faces direct and aggressive competition from three major groups. [...]