L’oreal and the Globalization of American Beauty Essay

1420 Words6 Pages
Introduction:
L’Oreal was started in 1907 by French chemist, Eugene Schueller, who developed the world’s first synthetic hair-color product, L’Aureole. By 1912 his hair products were sold in France, Netherlands, Austria and Italy. In the mid-1930s, Schueller moved into the hygiene and toiletry sectors of the cosmetic market with great success. L’Oreal soon earned the reputation as the leader in European hair coloring and skin care products. Although L’Oreal reached European success, entering into the U.S. market proved much more difficult. In 1953, L’Oreal formed licensee Cosmair Inc. in New Jersey to distribute its hair-coloring products to beauty salons. The company soon realized three challenges within the U.S. market. First, in
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operations.
Phase two entailed acquisitions of SoftSheen and Carson, the leading U.S. ethnic hair-care companies. The company then acquired the leading U.S. hair-care brand in the professional market, Matrix. The final acquisition came with Kiehl’s. All of these companies coupled with L’Oreal’s successful French cosmetic products enabled L’Oreal to become a global leader in the cosmetic market, with 19 consecutive years of double-digit growth going into 2004.
Problem:
L’Oreal is the world’s most successful cosmetic company that has experienced almost two decades of double-digit profit growth. They have become the largest beauty company in the world, and the problem is how to maintain that status.
SWOT Analysis:
Strengths:
• L’Oreal is the top beauty company in the world with 15.5 billion in sales in 2004. (Gale Group, 2007)
• L’Oreal has a unique portfolio of international brands including, Redken, Maybelline, Lancome, Ralph Lauren, Giorgio Armani, Garnier, Matrix and Helena Rubinstein.
• L’Oreal is a household name with a positive image.
• In 2005 and 2006, L’Oreal tightened the control of in the operational control of the businesses putting strict controls on inventory, trade accounts and investments. (Mulliez, 2006)
• L’Oreal’s initial capital had multiplied by 19.26 in 20 years. Total shareowner return: 15.31% (Mulliez, 2006)
Weaknesses:
• L’Oreal is exclusively a beauty company, predominately in

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