Essay on L'OREAL

5083 Words21 Pages
HKU570

ZHIGANG TAO

L’ORÉAL: EXPANSION IN CHINA
After acquiring Mininurse at the end of 2003, this new Chinese acquisition of Yue-Sai only serves to confirm our determination to step up the pace of growth in China.
- Lindsay Owen-Jones, CEO, L’Oréal1

On January 26th 2004, French cosmetics giant L’Oréal signed an agreement to acquire a famous
Chinese cosmetics brand Yue-Sai. 2 The acquisition came shortly after L’Oréal made another successful bid for Raystar Cosmetics (Shenzhen) Co. Ltd.’s skin-care brand, Mininurse, in
December 2003.3 L’Oréal was already very successful in both China’s high-end and middle-range cosmetic markets. The acquisitions of Mininurse and Yue-sai indicated that L’Oréal would focus more on the mass
…show more content…
The Western European markets were the most profitable, and had around 15% rates of sales in 2004 [see Exhibit 2]. Other regions across the world, however, exhibited a high potential for growth: eg, Eastern Europe, Asia and Latin America showed a 2004 growth rate of 29.3%, 17% and 16.2% respectively, although the markets in these regions were not as profitable as those in traditional Western European and North American markets [see
Exhibit 1 and 2]. In terms of product division, consumer products dominated total sales, contributing 54.5% to sales in 2004 while the active cosmetics6 showed higher momentum to increase [see Exhibit 3].
Research and Development
The future belongs to modern, powerful businesses capable of facing up to the many technological, scientific and ecological challenges of the coming years.
That is how we are getting ready for the future at L’Oréal.
- Jean-François Grollier, vice-president for research and development. L’Oréal7

L’Oréal operated on the principle of “research and innovation in the interest of beauty”; it believed that the ever-improving effectiveness and quality of its products was due to innovation, which had been nurtured since Schueller founded the Group in 1907. The company put a lot of emphasis on technological innovation as it was convinced that in the long term, quality and innovation were the only ways to satisfy an increasingly diverse and ever more demanding
consumer
Get Access