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Loreal Strategic Analysis Essay

Decent Essays

Key Issues Facing L’oreal

Core Competencies
L’Oréal has created several core competencies that have created value and served to gives L’oreal a competitive advantage over it’s competitors.
Loreal’s first core competency is seen through it’s product innovation. L’oreal is fully dedicated to creating new and innovative products at it’s advanced dermatological research facilities. L’oreal invests heavily in research and development and aims to introduce one or two new products each year, every year in each of it’s world-wide markets. In fact, L’oreal annually invests 3 percent of its sales for research and new product creation. L’Oréal then regains this investment through the sales of its new globally launched products. This core …show more content…

We aim to give our customers the right to be beautiful day after day: because they’re worth it.”

Recommendations for the Future
Business Strategy Diversification is one of the great successes in L'oreal's business strategy, but it must shift it's focus on improving it's current companies. The focus on innovation should be the critical success factor. L’Oreal should rid itself of the trickle down technology and develop a more direct approach. The direct approach will make innovations more available to lower income consumers and will broaden their segmentation of the population. Presently, consumer products make up 54.8%, which seems to under-represent this sector of the population. The direct approach will increase the percentage of consumer products sold, which better represents the consumer products sector and demonstrates an increase in growth. L’Oreal should also develop a new business strategy that will give them more of a competitive advantage against companies such as Estee Lauder, Proctor & Gamble and Nivea’s face cream. One way that they can do this is by catering to a further range of ethnic groups. In addition to specific product lines for African-American and Asian-Americans, L'oreal should look into product lines and marketing for the huge Hispanic population in the U.S, which is virtually untapped. L’Oreal may be able to apply some of the

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