EXECUTIVE SUMMARY.
If we look at the over 100-year history of L’Oreal we see how much that company changed and became the biggest global cosmetic company. They expanded and acquire many other companies in the world especially in USA and France.
They faced some challenges on the way to that title. Some of the challenges are: high rivalry in the industry, marketing problems with sustaining a consistent brand positioning of the products in some markets, and the cultural differences they faced in many countries.
However they also possessed specific capabilities that helped on the way to become the world’s largest beauty company. L’Oreal has a strong commitment to research and development; for example they spent $600 million in 2003 on
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This makeover was a big hit. Maybelline's share of the nail-enamel market in the U.S. has climbed from 3% to 15% since 1996.
In short, over the past 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 for the company. Finally I disagree that growth was only through internal development, but the combination of both L’Oreal expertise in marketing and R & D and many successful acquisitions, which opened doors to new markets for L’Oreal to go to.
3. How did they go about integrating acquisitions within the company, within existing brands?
They looked at the brand they acquired and tried to understand how people see that brand, in Maybelline example – consumers were unable to define what Maybelline was. Then L’Oreal team applied their expertise and technology to improve Maybelline products, its marketing, and its brand image to increase its share of US market. This resulted in increase in sales. The company used the same approach with Ralph Lauren fragrances, Redken hair care and others. They really focused on each brand to be very precisely defined and occupied a very distinct market position. Each acquisition they made was to get into specific segment and market, which did not overlap with existing product lines and segment they had at the time.
4. L’Oréal offers consumers
The R & D facilities allowed them to continuously come up with new products in the market. In my opinion they are flooding the markets with many new products, in a way they are confusing an average golf player with too many different types of golf club.
According to the agreement between L’Oreal and those two local companies, Li Zhida and Yue-Sai Kan who is
Considering these environmental trends and cultural differences into account, positioning Yue Sai as a provider of “delicate luxury cosmetics for mature Chinese women” under the LCD of L’Oreal, is the ideal choice. It will help L’Oreal establish a sustainable and profitable presence in a Chinese market segment inaccessible by its other sub-brands.
The company has launched the Nike products, which embody a love of sport, discipline, ambition, practice, and other athletic traits.
* In what ways do the goals of R&D conflict with those of the brands?
The huge success of L'Oreal Plenitude in French as the premium skin product with "class to mass" strategy was the primary reason for L'Oreal to expand the product to US market. The company started to enter the US market skin care in 1989 through mass channel by introducing the entire product line (14 SKU's) that had been developed in France, instead of launching the product one by one. Before Plenitude entered the US market, L'Oreal had had good reputation for its cosmetic and hair product, so the name was critical to sell the products. The company used the same formula "star" system in advertising as in France by putting bulk of dollars on the newest, most technologically advanced product. Even though Plenitude had a
Because L'Oreal had a commitment with the trade that they would keep investing and supporting its brands financially and considering that P&G had a very strong market position in the "masstige" skin care category, long term ROI and profit were forecasted for the following years. It was planned that L'Oreal would gain share and well establish its brand Plenitude.
The Revlon Beauty Company is a global and classic brand. An advertisement found in Glamour Magazine, promotes the sales of Revlon’s well-known nail polish enamel. The ad features a man with a woman’s hands draped over him to promote new nail polish colors. Revlon attempts to convince readers to purchase beauty products, including nail polish, through the use of colorful imagery, diction, and appeals to pathos and ethos; overall the ad is fairly effective at convincing the target audience of women ages 18-40.
Makeup Art Cosmetics (MAC) was founded in 1985 in Toronto by Frank Toskan and the late Frank Angelo. The business plan concentrated on targeting young, fashionable females by creating cosmetic products which contain unique textures and colours. Using this strategy, the company targeted the ¡°hip¡± celebrities and other cosmetic influencers to gain recognition and market share in the younger consumer market. Since its inception, the company has grown to become a multi-national organization operating in over 180 locations worldwide. In the late 1990¡¯s, MAC was purchased by Estee Lauder, which has led to the alteration of the company¡¯s governance; the culture of the firm changed from that of an entrepreneurial-style with limited rules into
In terms of promotion and advertising, L’Oreal should change the “star product” approach and instead focus on the whole product line or perhaps a set of products for a given target segment. In this way, L’Oreal can inform its customers on its products which should also help them in choosing the right product for themselves. L’Oreal should also focus on building the brand Plenitude since this is something that customers are not aware of. They
The following companies were chosen because they are ranked highly in the different areas they work in, in terms of the cosmetic industry. Revlon was chosen because it is a product that consumers like and feel comfortable wearing. L’Oréal is a more mature brand and it suits the women who want to feel comfortable but still be subtle when they wear makeup. MAC Cosmetics chosen because it suits the women who are outgoing and who want a flashy but also subtle look.
Upon first glance it is not very obvious that Nike employs diversification in their overall corporate strategy. The company not only diversifies in its product line
L'Oreal is a cosmetic company, which makes some of the world's biggest beauty products. L'Oreal's success story begins in 1907. It has been the market leader in the cosmetics and toiletries market since 2001 (Euromonitor 2005). Their products are sold in about one hundred and thirty countries worldwide. L'Oreal is divided into four categories - consumer products, professional products, luxury products, active cosmetics. They mainly focus on skin care, make-up, hair care and fragrance. L'Oreal includes some important brands such as Lancôme Paris, Garnier, Mabelline, Softsheen Carson, Matrix, and Biotherm. L'Oreal invests heavily into its research and development which gives them competitive advantage over its competitors.
L’Oreal is challenged on how the company can still keep its place as a leader in the cosmetics world, which is synonymous with beauty, innovation, and scientific excellence in more than 100 countries (Message from the Vice Chairman, 2013). It continues to be the source of expertise in presenting all its retail distribution channels, hair salons, department stores, supermarkets and pharmacies hence knowledge is also shared with the many; it also maintains its being a leader in many sectors of the health and beauty market in line with hair, skin and sun care; it is also a manufacturer of leading brands in the United Kingdom (Message from the Vice Chairman, 2013). Moreover, L’Oreal UK is also proud about its technological
The pharmaceutical activities of L’Oreal are also handled by Sanofi-Aventis. These divisions and subdivisions ensure the quality that the L’Oreal Group offers to its customers. To further add to the enumerated strengths of the company, L’Oreal’s advertising strategy also plays a major part to its growth. Through adapting to the culture of their target market as the main tool of their advertisement, the Company brought L’Oreal products within reach of other women from different parts of the world.