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L’Oreal

"think global, act local"

L’Oreal1is the worlds largest cosmetics and beauty company . It mainly focuses on
hair products ,skin care, make-up and perfumes but it also has an active role in the
pharmaceutical field .

It was founded in 1909 by Eugène Schueller but now it is being controlled by the
founder’s daughter Liliane Battencourt (non-executive director and major
shareholder) and the Swiss company Nestlei2

Going back in time

Below are a few key dates of the company's century of existence3:

* 1907: Eugene Schueller creates a hair dye called Aureale

* 1928: Takeover of the Monsavon company

* 1934: The brand Dop is launched

* 1939: The Societe francaise des teintures inoffensives pour cheveux becomes
L'Oreal

* 1942: Francois Dalle joins Monsavon

* 1948: Francois Dalle is appointed Joint General Manager of L'Oreal

* 1957: Eugene Schueller dies aged 87, Francois Dalle becomes CEO4

* 1963: L'Oreal is listed on the stock exchange

* 1964: Takeover of Lancome

* 1984: Francois Dalle resigns, Charles Zviak becomes CEO

* 1988: Lindays Owen-Jones, aged 42, becomes CEO of L'Oreal

* 1989: Acquisition of Helena Rubinstein

* 1996: Takeover of Maybelline

1
http://en.wikipedia.org/wiki/L'Oréal
2
http://www.docstoc.com/docs/19687630/L
3
http://www.thefreelibrary.com/Corporate+culture+and+values
%3A+genesis+and+sources+of+L'Oreal's...-a0204931980
4
CEO- chief executive officer
* 2006: In April, Jean-Paul Agon becomes CEO of L'Oreal.

Mission and Vision

The company’s main mission is satisfying all costumer demands regarding the
quality of the products and the price in order to fulfill each and everyone’s beauty
aspiration

Their vision is to invest in research, actively supporting the development of its


brands and continuing to expand the global reach.

Since the company was formed in 1907 Eugene Schueller has continued to invest in
cosmetics in order to improve quality and efficacy of its products through scientific
innovation5

L’Oreal research missions are:

- Better understanding of healthy skin and hair (at the cellular level)

- To synthesize active molecules which protect, repair or color

- To identify the process of skin aging , sun damage, hair loss so on…..

- Developing new products

- Products evaluation

SWOT analysis
Strengths

The leading and initial strength of L’Oreal is its constant research and development

in the field of the beauty industry. This allows the company to focus on providing its

customers with paramount products and services. Regardless of the tough

competition in the cosmetics industry, L’Oreal stays at the top of the list due to its

continuous study. On the other hand, the company has taken action in the area of

pharmaceutics and dermatology in order to oversee the development of skin care

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Each year the Group devotes 3% of its turnover to research and development
and hair products. These activities are controlled and tackled by Sanofi-Aventis. The

divisions that were mentioned previously in the company profile guarantee the

quality and excellence L’Oreal wants its customers to perceive about its products.

As a final strength, the company’s advertising strategy is a vital function of

L’Oreal’s company growth. In order to attain this, they have conformed to the

culture and ethics of their target market. They used this potency to reach and

satisfy women from around the world.

Weaknesses

One of the weaknesses that L’Oreal challenges is the complexity in the control of

the company. This is because of the various divisions that they have and the

decentralized organizational formation. This reduces the speed of operations and

production due to the requirement of reporting to the Board Members of the

company. The company also faces obstacles when it comes to researching what

division is liable for unfavorable outcomes. On the other hand, the company’s profit

margin is relatively low in comparison to minor rivals. In other words their profit

margin results do not match their anticipated end results. This could be the effect of

their advertising budgets and the size of the company. Finally, due to the fact that

products are managed on a global scale, there are many contrasts as to what type

of image and appearance they want to illustrate to the different consumer

segments.

Opportunities
L’Oreal’s main objective is to satisfy their consumers by providing them with

products that will improve the appearance of women that are of all ages. Due to the

fact that they have an increasing demand in the area of hair styling and color,

skincare, cosmetics and perfumeries, this provides them with an opportunity to

concentrate in that area of specialization. Another feature they could take

advantage of is their increasing market that varies from the prosperous, the aging

and the masses of their target market. Finally L’Oreal should grasp the opportunity

of its superior market share due to the various patents registered by the company.

This aspect is providing them with the chance to have top of the range products

pointed directly to their name and this would consequently lead most customers to

them.

Threats

One of the major threats to L’Oreal is the increasing competition in the industry of

cosmetics. Due to the fact that the cosmetics industry is a growing one, L’Oreal

faces the threat of other companies exceeding their profit. On the other hand, the

economic crisis also stands as a risk to the company because this could harm the

possibility of increasing profit. People of developed countries have access to the

products of L’Oreal, but sometimes the company faces obstacles when it comes to

connecting with average citizens from developing countries. Finally, due to the

financial crises the attitudes of consumer spending has changed. Even though,

L’Oreal is producing one of the top cosmetics products, people have started
considering their products as more of a want and not a need anymore. However,

with the increasing market in cosmetics, the damage could have been worse.

Competitor Analysis

Research has proved that there are no real threats to L’oreal as a brand, although

the top three competitors of L’Oreal are Estee Lauder, Revlon, and Shiseido6.

These four companies are the main players in the market. Moreover, further study
has also been done and no information has been found on L’Oreal’s indirect
competitors. We are therefore going to focus on discussing the promotional and
advertising strategies of Estee Lauder, Revlon, and Shiseido.

Estee Lauder

Estee Lauder’s marketing strategy is formulated around its mission statement and
this is due to the fact that the company wants to provide extraordinary quality
products and services as the establishment for a concrete and loyal consumer
foundation. Each single brand of the company is uniquely placed as a single image
and is promoted with uniform logos, design, and packaging. The company has
recently been intensifying its advertising techniques on media advertising and
decreasing its actions of prom Estee Lauder frequently advertises in upscale
magazines, radio, newspapers, direct email, photo displays at airports and
television optional strategies. Also, Estee Lauder cooperates in programs with
retailers that allow them to formulate strategic advertising strategies. These
strategies consist of Gift with Purchase and Purchase with Purchase. Specific in
house creative teams prepare and organize all the advertising and creative work for
Estee Lauder. The team designs the sales materials, advertisements, and packages
for each brand. The marketing and sales team spend a significant amount of time
meeting with customers and checking activities of their rivals7.

Revlon

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L’Oreal SA, www.hoovers.com.
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Item 1. Business, www.edgaronline.com
Revlon has succeeded highly after it has excelled in its color cosmetics with lipsticks
and nail colors. It is now having great success in the Rs 160 core fragrances market.
Revlon is starting to relaunch in its fragrance range by using the discounted price
strategy and this is said to be an assertive action in the market. According to the
sales and marketing director of Revlon, Sanjeev Kapoor, “We are trying to fill the
existing gaps in the fragrance market by re-launching a range of Revlon fragrances
at reduced prices”. Revlon decreased the prices of all its main fragrances by almost
50%. This decision was taken after the sales and marketing director has seen that
the mid priced segment has not been tapped in the market. This new pricing
strategy has been implemented in only a few cities and it was received pretty well.
This new strategy will be announced officially through roadshows which will be done
in 12 cities within the next month.8 According to the sales and marketing director,
decreasing the price of these fragrances can also be exerted since they have
started the import if fragrance oil and part contract-manufacturer of fragrance gears
and bottles locally which has obviously decreased the cost of goods sold. This is
clearly pointed towards at improving its existence in the market where it currently
has a small market share. Basically Revlon’s competitive advantage is price and it
will use this advantage to gain more market share and increase its efficiency and
productivity.

Shiseido

This company cater to the aging market because it focuses on superior quality
products because it emphasizes on products that are made naturally. Shiseido has a
more of an exclusive clientele strategy which allows it to target the market of aging
women. Research has been done and no promotional, advertising, or pricing
information could be obtained.

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Will Modi Revlon smell success with price cuts in fragrances, www.financial express.com
i