L'Oreal SWOT

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    26-Oct-2014

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<p>STRATEGIES OF LOREAL</p> <p>1</p> <p>TABLE OF CONTENTS</p> <p>Introduction.3 The Business..5 Corporate strategies.7 The Complete Global Changeover.12 SWOT Analysis13 LOreal in India...14 Conclusion16</p> <p>2</p> <p>IntroductionEugene Schueller a young French chemist developed an innovative hair color formula, Aureole. He manufactured his own products and sold them to Parisian hairdressers. The company was registered in 1909. The guiding principle from the beginning was research and innovation in the interest of beauty. By, 1950 had acquired 100 products and today they are 2000 product strong. From the beginning Eugene was ambitious about his company and by 1912 the brands were found in Holland, Austria and Italy. In a few years the company was distributed US, South America , Russia and Far East. Today, LOral is present worldwide through its subsidiaries and agents. Loreal started out in hair colour business but soon branched out into other cleansing/beauty products. LOrals century long history is marked with successes. Today the 500 brands of LOral provide diverse products from hair color, permanents, styling aids, body and skin care, cleansers and fragrances. The distribution channels are diverse from hair salons to super markets and hypermarkets, health and beauty outlets and direct mail. In 1933, Voutre beaute a magazine devoted to beauty and well being of women was launched .The 1950s saw the advent of new and exciting advertising medium: the movies. LOreal made its onscreen debut with the campaign for Ambre Solaire, which was making a comeback on the market. The Global Reach Of LOreal</p> <p>3</p> <p>The Business</p> <p>In the battle for global beauty markets, $12.4 billion L'Oreal has developed a winning formula: a growing portfolio of international brands that has transformed the French company into the United Nations of beauty. Blink an eye, and L'Oreal has just sold 85 products around the world, from Redken hair care and Ralph Lauren perfumes to Helena Rubinstein cosmetics and Vichy skin care. The report shall cover L'Oreals presence on the world map as well as its position India since its inception. L'Oreal caters to the market by following the underlined categorization and has different strategies for these product segments. 1.Global Strategies 2.Strategies in India The Product Categories 1. Consumer products The Consumer Products Division is dedicated to offering all consumers its high technology products at competitive prices through mass-market retailing channels. The Divisions brands develop haircare, skincare, make-up and perfume products that meet the aspirations of all of its customers. The Division's 5 international brands are L'Oral Paris, Garnier, Maybelline New York, Softsheen.Carson and Le Club des Crateurs de Beaut. 2. Professional products The Professional Products Division is at the service of hairdressers worldwide. Our complementary brands meet the requirements of salon professionals in colorants, hair care, texturing and styling formulas and provide salon customers with a wide range of innovative, high-performance products. The Professional Products Division of LOral is made up of four different brands: L'Oral Professionnel, Krastase, Redken 5th Avenue NYC and Matrix. 3. Luxury products The prestigious brands of the Luxury Products Division offer consumers top of the range products. Clients of selective retail outlets (department stores, perfumeries, travel retail outlets, and the brands own boutiques) receive personalized advice at the point of sale, enabling them to choose the products best suited to their needs.</p> <p>4</p> <p>Lancme, Helena Rubinstein, Biotherm, Shu uemura and Kiehls offer premium products known for their innovation, performance and quality. The Luxury Products division houses also some of the world's top perfume brands: Giorgio Armani, Ralph Lauren, Cacharel, Paloma Picasso and Guy Laroche. 4. Active cosmetics The Active Cosmetics Department designs and markets dermo-cosmetic skin care products that are sold in pharmacies and specialist retailers. These products offer consumers proven safety and effectiveness supported by advice from pharmacists and dermatologists. The Departments three brands, Vichy, La Roche Posay and Innov, offer skin care, sun care, and hair care and make-up products.</p> <p>LOreal</p> <p>Consumer products</p> <p>Professional products</p> <p>Active cosmetics department</p> <p>Maybelline New York, LOreal Paris, Garnier.</p> <p>LOreal Profesionnel</p> <p>Vichy</p> <p>5</p> <p>Corporate StrategiesTrue enough, its tough to succeed in a demanding economy. It takes breakthrough innovation, breakneck speed, and naturally, the very best talent to outthink and outmaneuver your competitors. L'Oreal thus works on a three point guide for meeting with competition: Innovate by successfully conceiving of and launching a new concept or technology Differentiate their products and services through pragmatic marketing strategies Dominate in their market and build brand equity and profitable growth</p> <p>The Strategist For the first time this year, TIME, the American magazine, published a ranking of the 100 most influential people in the world, in a range of categories (politics, economics, science, arts, etc). Among them, Mr. Owen-Jones, LOrals CEO, is part of the worlds 20 Builders and titans. When questioned on the possible risks of market saturation in a business like beauty care, Mr. Owen-Jones replied, When I began, we sold to women from 20 to 50. Today, we sell to women from 15 to 75. Tomorrow, we will undoubtedly have customers from 13 to 93. Lindsay Owen-Jones feels that the cosmetics industry has a promising future, and not only because of its constant quest for innovation and quality. ...considering that the men's market is just beginning to develop and that emerging countries represent a gigantic reservoir of potential consumers, the market is far from saturated. Initial Strategy One of Owen-Joness first moves at LOral was to bring more focus to the company through a huge pruning of brands and activities. The company focused on five core businesses and technologies -- hair color, hair care, skin care, color cosmetics, and fragrances. Then we concentrated on 10 global brands, which now make up 85% of sales. A whole list of brands has disappeared. It's focus and then extreme drive on the remaining products to take them global.</p> <p>Mergers And Acquisitions</p> <p>6</p> <p>LOral, the worlds largest beauty company, announced that it has signed an agreement to acquire SkinCeuticals, a professional skin care company. Founded in 1994 and headquartered in Dallas, Texas, SkinCeuticals, a privately held company, is one of the largest and fastest growing brands in the professional premium skin care market in the U.S. Through a strong and specialized distribution network, the company sells to dermatologists, plastic surgeons, and high end spas. SkinCeuticals sales in 2004 amounted to 35$M. The acquisition of SkinCeuticals allows LOral to strengthen its position in highperformance professional skin care, said Lindsay Owen-Jones, Chairman and CEO of LOral. This market, in which SkinCeuticals is a leading player, is a particularly promising one with high international potential. The company entered the Chinese market by acquiring the Chinese brand Mininurse in December 2003.This was followed by an agreement to acquire the Chinese make-up and skincare brand Yue-Sai on 26th January 2004. "After Mininurse at the end of last year, this new acquisition confirms our determination to step up the pace of our growth on this strategic market", commented Mr. Lindsay Owen-Jones, Chairman and Chief Executive Officer of L'Oral. On 9th May 2001 The L'Oral Group and the CosMedic Concepts Company have just signed an agreement. According to the terms of the agreement, the CosMedic Concepts Company yields its BioMedic brand and range of products to L'Oral. "This acquisition will strengthen L'Oral's product portfolio in the dermocosmetics and will accelerate our expansion in this rapid growth market," indicated Guy Peyrelongue, President and CEO of L'Oral U.S.A. "The acquisition of the leading American brand of cosmetics designed for use by dermatologists and plastic surgeons, in association with L'Oral research, will provide L'Oral with a powerful position in this potentially strong market throughout the world," stated Laurent Attal, managing director of L'Oral's Active Cosmetics department As the competition intensifies, Owen-Jones is likely to continue making acquisitions. He has purchased five companies in six years. The company is actively exploring acquisition targets elsewhere in Asia. Already huge in established markets such as Europe and the U.S., L'Oreal is venturing further afield. Last year, the company acquired Soft Sheen, a U.S. line of hair-care products aimed at African-American women. Owen-Jones intends eventually to use it as a springboard for expanding into Africa. L'Oreal is expanding rapidly in India since it introduced its L'Oreal Excellence line of hair color in 1997--the first time a company dared sell any color other than black. In Mexico, L'Oreal ranks No. 1, with a 28% spurt in sales last year. Cross-fertilization: L'Oreal's work with Maybelline is a prime example. In 1996, L'Oreal acquired Maybelline for 758 million and began a complete makeover of the brand, including moving the headquarters from Memphis, Tenn., to New York City. The key: figuratively stamping 7</p> <p>''urban American chic'' all over Maybelline products to promote their U.S. origins. In 1997, for example, Maybelline rolled out a radical new makeup line, heavy on risky colors such as yellow and green, dubbing it Miami Chill. And when L'Oreal marketers discovered that the moderately successful Great Finish nail enamel dried in one minute, they changed the name to Express Finish--and sold it heavily as a product used by urban women on the go. The makeover was a hit. Maybelline's share of the nail-enamel market in the U.S. has climbed from 3% to 15% since 1996. Altogether, over the past three years, Owen-Jones has almost doubled Maybelline's sales, from $320 million to $600 million, and pushed the brand into more than 70 countries. Sales outside the U.S. market now make up 50% of total revenues. New Geographic Areas In the battle for global beauty markets, $12.4 billion formula: a growing portfolio of international brands company into the United Nations of beauty. Blink an products around the world, from Redken hair care and Rubinstein cosmetics and Vichy skin care. L'Oreal has developed a winning that has transformed the French eye, and L'Oreal has just sold 85 Ralph Lauren perfumes to Helena</p> <p>India is one of LOrals fastest growing markets. To meet ever-rising demand, the Group opened a new manufacturing plant near the city of Pune, a state-of-the-art facility with a production capacity of up to 100 million units per year. 2003 saw LOral grow by 33.4% in India, and the new factory in Pune is the latest step in the Groups rapid development on the subcontinent. The high-tech plant will manufacture hair care; hair color and skin care products for the Indian market as well as for export to neighboring countries. It shall practice World Class Standards in Hygiene. The Pune site is one of the first within the Group to implement LOrals newest GHP or Good Hygiene Practices. L'Oreal is surging in markets stretching from China to Mexico. Its secret: conveying the allure of different cultures through its many products. Whether it's selling Italian elegance, New York street smarts, or French beauty through its brands, L'Oreal is reaching out to more people across a bigger range of incomes and cultures than just about any other beauty-products company in the world. That sets L'Oreal apart from one-note marketers such as Coca-Cola Co., which has just one brand to sell globally. But L'Oreal is surging in markets stretching from China to Mexico. Its secret: conveying the allure of different cultures through its many products. Whether it's selling Italian elegance, New York street smarts, or French beauty through its brands, L'Oreal is reaching out to more people each day. Research and Development</p> <p>8</p> <p>Since it was founded in 1907 by the chemist Eugene Schueller, the L'Oral Group has continued to invest in cosmetic research with one clear aim: to improve the quality and efficacy of its products through scientific innovation. Each year the Group devotes more than 3% of its turnover to Research and Development. Laboratories in France, the United States and Japan employ over 2,900 scientists and support staff from over 30 disciplines: chemistry, biology, medicine, physics, toxicology, etc. Research findings are published in numerous international scientific journals and in 2004 LOreal applied for 586 patents. LOreal believes in the strength for long term growth and sustenance. Entering New Business LOreal has announced the first men's anti-aging product line to hit mass market retailers across America. Up to now, men's cosmetic has been a small niche market, but L'Oreal's lead could start the ball rolling. Exploring New Opportunities To sell the new Helena Rubinstein line, L'Oreal has opened a New York spa--the first time L'Oreal has tried to run a retail operation. And the target market is younger and trendier than L'Oreal's typical luxury customers. It's not clear how well the company will be able to manage its ever-growing stable of upscale beauty brands while mixing it with street-wise new products. But that's the thrill of being in the beauty business--what's hot is always changing, and only the savviest of sellers can keep up with the trends. Corporate Social Responsibility UNESCO and LOreal Professional Products signed an agreement under which they will work together on an HIV/AIDS prevention education programme. Another example of LOreals commitment to philanthropy and serving disadvantaged communities is the Group's continued support over the past 15 years, to the Look Good Feel Better programme. This initiative helps put a smile back on the faces of cancer patients through skin care and make up workshops. LGFB is an original project from the cosmetic industry, which demonstrates just how beneficial cosmetics can be to individuals well being. This programme will offer courses adapted to the cultures of the countries concerned. It will be part of the programme already put in place by LOreal in Africa, which has thus far provided for 170,000 training days. The hairdressers serve to further the campaign by relaying their knowledge to clients in their salons, veritable places of exchange and dialogue across the continent.</p> <p>9</p> <p>After the mass scale destruction due to tsunami in India LOreal participated in the international relief effort, LOreal contributed 1 million. LOreal realized the need of women in science and in 1998, the LORAL-UNESCO FOR WOMEN IN SCIENCE Award was designed This collaboration, illustrates how the private sector and an intergovernmental institution can pursue...</p>