You are on page 1of 7

RIT Croatia

LOreal Paris SWOT Analysis


Principles of Marketing, Section 09 , 2013/2014

Dora Markuz
9/26/2013

TABLE OF CONTENTS
Company Description 2 SWOT Analysis 3 Discussion Questions .5 Resources ...6

COMPANY DESCRIPTION
The L'Oral Group is the world's largest cosmetics and beauty company. With its registered office in Paris and head office in the Paris suburb of Clichy, Hauts-de-Seine, France, it has developed activities in the field of cosmetics. Concentrating on hair colour, skin care, sun protection, make-up, perfumes and hair care, the company is active in the dermatological, tissue engineering and pharmaceutical fields and is the top nanotechnology patent-holder in the United States.0

SWOT ANALYSIS

STRENGTHS
One of LOreals biggest strengths is their constant research and innovation in beauty products, because of which they hold the crown of the leader in cosmetics industry, despite of their strong competition. Also, they advertise and promote specific products for specific target customers. Since they operate in more than 130 countries, they know what customers from different cultures need, and they make sure they always deliver a quality product. Furthermore, they take great care of their webpage, which is extremely organized, gives all the important information about the products and the company itself, and most importantly, it links all the countries LOreal is present in. In addition, LOreals strong feature is their environmental concern, since they stopped animal testing in 1989, and started producing natural and organic cosmetics. Above all, LOreal puts a significant amount of effort into producing a strong brand image, which makes them a globally known brand.

WEAKNESSES
LOreals weakest link is their decentralized organizational structure; it is extremely difficult to control the company because of so many subdivisions. Next, their profit margin is significantly lower than of their competitors (such as Dior, Chanel, YSL, Lancme Estee Lauder in quality, and Nivea, Revlon and Vichy in general market brands). Also, they frequently have to rely on third party retailers, which does not give them the chance to control their sales one hundred per cent.

OPPORTUNITIES
The most promising opportunity at this point is the market, which grows by the hour, and attracts more and more customers (but also competitors) day after day. With further innovation, product and services expansion, and a rise in demand for organic and natural cosmetics, LOreal could have a very bright future.

THREATS
The biggest concern, not just for LOreal, but for every company, is the appearance of new global economic crisis, and an economic downfall. Also, new markets could quite shake up LOreals position in the industry, because with new markets come new (forei gn) competitors with new innovative products, gunning for LOreals place on the top, which LOreal could easily lose, if they suffer a marketing and promotion failure. However, one of the most threatening events would most certainly be a change in market demand and consumer preferences, because that would mean LOreal had to completely change their whole offer, which would take up a lot of time and earnings.

WHAT ARE THE CHANCES AND RISKS THE COMPANY FACES?


As mentioned before, LOreals most promising opportunity is market expansion and the arrival of new customers. Until they are completely ready to enter a new or expanded market, they have the chance to work on current product innovation and improvement, as well as developing new products and expanding their product/service range. Risks, on the other hand, are always present. From new competitors, through changes in market demand, all the way to world economic crisis, LOreal has to struggle in their industry if they want to stay on top of the business food chain.

HOW COULD THE COMPANY RESPOND TO THE EXTERNAL FORCES?


The company needs to be able to keep up with technological trends, since technology changes rapidly, and its the key factor of every business. Also, the company needs to always be prepared for sudden government decisions, such as higher tax and interest rates, changing laws and regulations, etc. This is done by constantly analysing the political, economic, social and technological situations in the country of operation, as well as the rest of the world. This is frequently referred to as the PEST Analysis. But most importantly, the company needs to focus on knowing their customers needs, and complying to them, as well as knowing what your competition is doing at every moment.

WHICH MARKETING STRATEGY WOULD ENSURE THAT THE COMPANY MATCHES ITS INTERNAL CAPABILITIES WITH EXTERNAL OPPORTUNITIES?
Probably the smartest move would be to improve what the company already has. If they start from the bottom, and with time improve and expand what is already working perfectly, and fix what is maybe not working so great, they are making more room for growth. Even the smallest of changes can make a difference.

RESOURCES
0

. http://en.wikipedia.org/wiki/L'Or%C3%A9al

http://www.forbes.com/sites/gaurisharma/2013/02/12/4-key-marketing-strategies-fromthe-startup-world/ http://smallbusiness.chron.com/external-changes-can-affect-company-38646.html http://www.lorealparis.hr/cesto-postavljana-pitanja.aspx http://beautyfulbrands.wordpress.com/2011/11/09/key-competitors-of-loreal-paris-andnivea/ http://www.studymode.com/essays/l'Oreal-Swot-Analysis-818863.html http://www.mbaskool.com/brandguide/fmcg/1122-loreal-paris.html http://www.studymode.com/essays/Loreal-Swot-Analysis-992102.html http://www.wikiswot.com/SWOT/4_/L_Or__al_SA.html http://www.loreal-paris.com/