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
When the manufacturer of L’Oreal shampoo introduced shampoos designed specifically to appeal to preteens, the product was:
MAC Cosmetics is originally a Canadian company that spread its routes successfully to many countries all over the world promoting equality,” All ages, all races, all sexes, all MAC,” this is the motto of one of the largest growing luxury cosmetics brands in the world. For MAC artists and MAC customers this motto is followed religiously, it is truly what drives this company which pushes for equality and strives to let no one feel excluded. MAC was started in 1984 by, Frank Tosken a makeup artist and photographer and Frank Angelo in Toronto. They found cosmetic products which were readily available to makeup artists and regular customers did not perform well under the penetrating environment of studio lights, and had to be constantly touched up. They started out by generating cosmetic formulas which included intense and warm colors that met their specific needs. By using them backstage on models and performers, news traveled fast about these efficient products and the demand began to increase, through just the professionals in the makeup industry. Then by word of mouth news spread to the broad population and it was made available to the public. In 1994 the company was acquired by the Estee Lauder who owns many of the world 's favorite cosmetic brands until today.
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 company’s creams inventory remains constant because it does not follow a trend in innovation and changes so often as the other products. The surplus in inventory is a big disadvantage since; last year’s products may not be in style this year in addition to the cost of storage. For all these reasons their cash flow is less in comparison with previous years causing that Luxor Cosmetics keeps increasing their bank loans, creating more debt, making it harder to pay out as 2011. In this particular situation the company could have either decrease its budgeted sales (productions) or increase its actual sales by improving more effective marketing strategy and research and development of its products in the markets. This way their inventory would decrease and their cash flow would increase. (Hopkins, 2009)
Estée Lauder has an extremely large presence as the global leader in prestige beauty with products being sold in more than 150 countries. This global success is attributed to their focus on cultural relevance, making sure that their products, signage, marketing etc. appeals to consumers in each local market.
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
Mac Cosmetics was made by Frank Angelo and Frank Taskan in Toronto, Canada in 1984. There is a mac store located at South Park Mall, 2310 SW Military Dr. Frank Toskan was a makeup artist and a photographer, Angelo was a salon owner both together. They both started off in Toronto and took over all countries with their international brand. This company was founded in 1985.
For gun control, there should be some requirements for the people to take in order to own a gun for themselves. Throughout the United States, gun control should allow people to still have guns; however, the citizens should go through some changes to ensure safety throughout the nation. Gun control has given some helpful ideals before that would help the people understand the responsibilities of their guns. They want to make sure that these laws maintain to progress as a better solution. Authorities should suggest on adding more security throughout the nation. Most citizens believe guns can still be helpful. Some people, on the other hand, think guns should have been banned. In some ways, guns may be beneficial, however, for the most part, the United States government should limit ownership, and lend the police more authority to enforce government laws.
According to the agreement between L’Oreal and those two local companies, Li Zhida and Yue-Sai Kan who is
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
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