L’OREAL – GLOBAL SUCCESS

THROUGH INNOVATION

GETTING TO KNOW L’OREAL

Headquarters FranceRegional Involvement

Global

Category Involvement

Skincare, Colour cosmetics, Hair care, Fragrances, Men’s grooming and Sun care.

World BPC Share (2011)

9.7%

World BPC value growth (2011)

4. 8%

WHAT THE CASE TELLS US• Main reasons for global success are targeting methods and frequent use of

products by youth• Invests 3% of revenue in R&D as innovation and quality of product gives a

competitive advantage.• Manufactures large quantities of products and acquisition strategy helps

increase capacity• Each brand division has its own distribution system• Promotion of L’Oreal’s image and values provides them with a sustainable

competitive advantage.• Acquisition of brands from countries of origin combined with L’Oreal’s

promotion strategy helped them become an international success in emerging markets

CURRENT SCENARIO

L’oreal operates through 4 divisions

• Consumer Product Division – L’oreal Paris, Garnier, Maybelline NY

• Professional Product Division – L’orealProfessional, Matrix Kerastase

• Active Cosmetic Division – Vichy (It is a dermatological product)

• Luxury Product Division – Lancome, Biotherm, Giorgio Armani, Ralph Lauren Fragrances

MARKET SHARE OF L’OREAL

Source: http://magazine.loreal-finance.com/en/loreals-worldwide-performances.htm

WHO DOES L’OREAL

COMPETE WITH?

GLOBAL COMPETITORS WITH

MARKET SHARE

COMPANY % SHARE (2010)

% SHARE (2011)

1. Procter & Gamble Co. 11.5 11.52. L’Oreal Group 9.8 9.73. Unilever Group 7.0 7.84. Colgate-Palmolive Co 3.6 3.85. Avon Products Inc. 3.2 3.26. Estee Lauder Cos Inc 2.9 2.97. Shiseido & Johnson Ltd 2.6 2.5Source:http://www.euromonitor.com/medialibrary/PDF/LOreal-Company-Profile-SWOT-Analysis.pdf

TOTAL NUMBER

OF PATENTS

RESEARCH AND

INNOVATION

BUDGET

Source: http://www.loreal-finance.com/eng/key-figures

Source: http://www.loreal-finance.com/eng/key-figures

Sales Figures

Sales

CHANGE IN

WORKFORCE

BREAKDOWN OF

EMPLOYEES BY

GEOGRAPHIC ZONE

Source:http://www.loreal-finance.com/eng/key-figures

THE ADVERTISEMENT DEPICTING

INNOVATION

• (Insert video)

L'Oreal's success can be attributed to these following factors:

Understanding Consumers Globally

Wide range of products

Effective positioning vis-à-vis its competitors

SUCCESS

LEARNINGS FROM THE CASE• L’Oreal relies on R&D for their new product innovation

• Their acquisition strategy has been very successful as they allow the companies to flourish by promoting their country of origin

• Increase in patent registrations has given L’Oreal a sustainable competitive advantage.

• Variety of distribution channels helps in increase of sales.

• Effective and unique promotion and advertising of its image with each country’s perception of beauty.