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5 Corporate strategies……………………………………………………………………..TABLE OF CONTENTS Introduction………………………………………………………………….3 The Business…………………………………………………………………………….12 SWOT Analysis…………………………………………………………………………13 L’Oreal in India………………………..………………………………………………14 Conclusion………………………………………………………………………………16 2 .7 The Complete Global Changeover……………………………………………………..
Austria and Italy.The 1950s saw the advent of new and exciting advertising medium: the movies. The distribution channels are diverse from hair salons to super markets and hypermarkets. The company was registered in 1909. Aureole.Introduction Eugene Schueller a young French chemist developed an innovative hair color formula. In 1933. Today. permanents. health and beauty outlets and direct mail. By. 1950 had acquired 100 products and today they are 2000 product strong. South America . In a few years the company was distributed US. Today the 500 brands of L’Oréal provide diverse products from hair color. L’Oréal is present worldwide through its subsidiaries and agents. L’Oreal made its onscreen debut with the campaign for Ambre Solaire. Russia and Far East. Voutre beaute a magazine devoted to beauty and well being of women was launched . The Global Reach Of L’Oreal 3 . which was making a comeback on the market. body and skin care. The guiding principle from the beginning was research and innovation in the interest of beauty. cleansers and fragrances. Loreal started out in hair colour business but soon branched out into other cleansing/beauty products. styling aids. He manufactured his own products and sold them to Parisian hairdressers. L’Oréal’s century long history is marked with successes. From the beginning Eugene was ambitious about his company and by 1912 the brands were found in Holland.
make-up and perfume products that meet the aspirations of all of its customers. enabling them to choose the products best suited to their needs. 3.4 billion L'Oreal has developed a winning formula: a growing portfolio of international brands that has transformed the French company into the United Nations of beauty. 1. Redken 5th Avenue NYC and Matrix. perfumeries. and L'Oreal has just sold 85 products around the world. hair care. The Professional Products Division of L’Oréal is made up of four different brands: L'Oréal Professionnel. The Division's 5 international brands are L'Oréal Paris. 2. Professional products The Professional Products Division is at the service of hairdressers worldwide. The Division’s brands develop haircare. Maybelline New York. Our complementary brands meet the requirements of salon professionals in colorants. texturing and styling formulas and provide salon customers with a wide range of innovative. Clients of selective retail outlets (department stores. and the brands own boutiques) receive personalized advice at the point of sale.Global Strategies 2. high-performance products. travel retail outlets. Kérastase. 4 . Garnier.Carson and Le Club des Créateurs de Beauté. Softsheen. The report shall cover L'Oreal’s presence on the world map as well as its position India since its inception.Strategies in India The Product Categories 1. $12. Consumer products The Consumer Products Division is dedicated to offering all consumers its high technology products at competitive prices through mass-market retailing channels.The Business In the battle for global beauty markets. Luxury products The prestigious brands of the Luxury Products Division offer consumers top of the range products. skincare. Blink an eye. from Redken hair care and Ralph Lauren perfumes to Helena Rubinstein cosmetics and Vichy skin care. L'Oreal caters to the market by following the underlined categorization and has different strategies for these product segments.
L’Oreal Profesionnel Vichy 5 . Active cosmetics The Active Cosmetics Department designs and markets dermo-cosmetic skin care products that are sold in pharmacies and specialist retailers. and hair care and make-up products. Garnier. offer skin care. These products offer consumers proven safety and effectiveness supported by advice from pharmacists and dermatologists. Ralph Lauren. La Roche Posay and Innéov.Lancôme. Biotherm. L’Oreal Consumer products Professional products Active cosmetics department Maybelline New York. performance and quality. Vichy. L’Oreal Paris. The Department’s three brands. sun care. Shu uemura and Kiehl’s offer premium products known for their innovation. 4. Paloma Picasso and Guy Laroche. The Luxury Products division houses also some of the world's top perfume brands: Giorgio Armani. Cacharel. Helena Rubinstein.
“When I began. the American magazine. skin care.hair color. hair care.considering that the men's market is just beginning to develop and that emerging countries represent a gigantic reservoir of potential consumers. we sold to women from 20 to 50. Mr.. in a range of categories (politics. It's focus and then extreme drive on the remaining products to take them global. 6 .. Owen-Jones replied. it’s tough to succeed in a demanding economy. Tomorrow. “. which now make up 85% of sales. The company focused on five core businesses and technologies -. When questioned on the possible risks of market saturation in a business like beauty care. we will undoubtedly have customers from 13 to 93. L’Oréal’s CEO.” Lindsay Owen-Jones feels that the cosmetics industry has a promising future. and fragrances. Owen-Jones.” Initial Strategy One of Owen-Jones’s first moves at L’Oréal was to bring more focus to the company through a huge pruning of brands and activities. It takes breakthrough innovation.Corporate Strategies True enough. and not only because of its constant quest for innovation and quality. Then we concentrated on 10 global brands. etc). A whole list of brands has disappeared. Mr. Among them. color cosmetics. the market is far from saturated. published a ranking of the 100 most influential people in the world. L'Oreal thus works on a three point guide for meeting with competition: Innovate by successfully conceiving of and launching a new concept or technology Differentiate their products and services through pragmatic marketing strategies Dominate in their market and build brand equity and profitable growth The Strategist For the first time this year. economics. the very best talent to outthink and outmaneuver your competitors. TIME. Today. breakneck speed. science. is part of the world’s 20 “Builders and titans”. arts. and naturally. we sell to women from 15 to 75.
is one of the largest and fastest growing brands in the professional premium skin care market in the U.” said Lindsay Owen-Jones. "After Mininurse at the end of last year. The company is actively exploring acquisition targets elsewhere in Asia. the CosMedic Concepts Company yields its BioMedic brand and range of products to L'Oréal.Mergers And Acquisitions L’Oréal. this new acquisition confirms our determination to step up the pace of our growth on this strategic market".. L'Oreal is venturing further afield. In Mexico." indicated Guy Peyrelongue. Chairman and Chief Executive Officer of L'Oréal. According to the terms of the agreement. Owen-Jones is likely to continue making acquisitions. Cross-fertilization: 7 . SkinCeuticals. commented Mr. President and CEO of L'Oréal U. plastic surgeons. Texas. a U. managing director of L'Oréal's Active Cosmetics department As the competition intensifies. announced that it has signed an agreement to acquire SkinCeuticals.S. is a particularly promising one with high international potential. Lindsay Owen-Jones.S. will provide L'Oréal with a powerful position in this potentially strong market throughout the world. “The acquisition of SkinCeuticals allows L’Oréal to strengthen its position in highperformance professional skin care. SkinCeuticals sales in 2004 amounted to 35$M. with a 28% spurt in sales last year. 1. Already huge in established markets such as Europe and the U. line of hair-care products aimed at African-American women. the company sells to dermatologists. Chairman and CEO of L’Oréal. Owen-Jones intends eventually to use it as a springboard for expanding into Africa.A. Through a strong and specialized distribution network. L'Oreal is expanding rapidly in India since it introduced its L'Oreal Excellence line of hair color in 1997--the first time a company dared sell any color other than black. L'Oreal ranks No. “This market. On 9th May 2001 The L'Oréal Group and the CosMedic Concepts Company have just signed an agreement. the world’s largest beauty company. "The acquisition of the leading American brand of cosmetics designed for use by dermatologists and plastic surgeons. a professional skin care company.S." stated Laurent Attal. Last year. and high end spas.This was followed by an agreement to acquire the Chinese make-up and skincare brand Yue-Sai on 26th January 2004.S.” The company entered the Chinese market by acquiring the Chinese brand Mininurse in December 2003. the company acquired Soft Sheen. in which SkinCeuticals is a leading player. Founded in 1994 and headquartered in Dallas. a privately held company. He has purchased five companies in six years. "This acquisition will strengthen L'Oréal's product portfolio in the dermocosmetics and will accelerate our expansion in this rapid growth market. in association with L'Oréal research.
To meet ever-rising demand. L'Oreal is surging in markets stretching from China to Mexico. heavy on risky colors such as yellow and green. and L'Oreal has just sold 85 products around the world. L'Oreal is reaching out to more people each day. for example. Maybelline's share of the nailenamel market in the U. from Redken hair care and Ralph Lauren perfumes to Helena Rubinstein cosmetics and Vichy skin care.S. dubbing it Miami Chill. hair color and skin care products for the Indian market as well as for export to neighboring countries. has climbed from 3% to 15% since 1996. New York street smarts. origins. a state-of-the-art facility with a production capacity of up to 100 million units per year. and pushed the brand into more than 70 countries. to New York City. The high-tech plant will manufacture hair care. over the past three years. 2003 saw L’Oréal grow by 33. Altogether. In 1997. But L'Oreal is surging in markets stretching from China to Mexico. from $320 million to $600 million. or French beauty through its brands. L'Oreal acquired Maybelline for 758 million and began a complete makeover of the brand. In 1996. Maybelline rolled out a radical new makeup line. Its secret: conveying the allure of different cultures through its many products. It shall practice World Class Standards in Hygiene.. $12.S. market now make up 50% of total revenues.4 billion L'Oreal has developed a winning formula: a growing portfolio of international brands that has transformed the French company into the United Nations of beauty.. 8 . the Group opened a new manufacturing plant near the city of Pune. Its secret: conveying the allure of different cultures through its many products. L'Oreal is reaching out to more people across a bigger range of incomes and cultures than just about any other beauty-products company in the world. Sales outside the U.4% in India. which has just one brand to sell globally. or French beauty through its brands. That sets L'Oreal apart from one-note marketers such as Coca-Cola Co. and the new factory in Pune is the latest step in the Group’s rapid development on the subcontinent. including moving the headquarters from Memphis. Whether it's selling Italian elegance. New York street smarts. Whether it's selling Italian elegance.S. India is one of L’Oréal’s fastest growing markets. And when L'Oreal marketers discovered that the moderately successful Great Finish nail enamel dried in one minute.L'Oreal's work with Maybelline is a prime example. Blink an eye. New Geographic Areas In the battle for global beauty markets. The Pune site is one of the first within the Group to implement L’Oréal’s newest GHP or Good Hygiene Practices. they changed the name to Express Finish--and sold it heavily as a product used by urban women on the go. The key: figuratively stamping ''urban American chic'' all over Maybelline products to promote their U. Tenn. Owen-Jones has almost doubled Maybelline's sales. The makeover was a hit.
the L'Oréal Group has continued to invest in cosmetic research with one clear aim: to improve the quality and efficacy of its products through scientific innovation. The hairdressers serve to further the campaign by 9 . to the Look Good Feel Better programme. Another example of L’Oreal’s commitment to philanthropy and serving disadvantaged communities is the Group's continued support over the past 15 years. physics. and only the savviest of sellers can keep up with the trends. It's not clear how well the company will be able to manage its ever-growing stable of upscale beauty brands while mixing it with street-wise new products.000 training days. Entering New Business L’Oreal has announced the first men's anti-aging product line to hit mass market retailers across America. L'Oreal has opened a New York spa--the first time L'Oreal has tried to run a retail operation. LGFB is an original project from the cosmetic industry. This initiative helps put a smile back on the faces of cancer patients through skin care and make up workshops. But that's the thrill of being in the beauty business--what's hot is always changing. Each year the Group devotes more than 3% of its turnover to Research and Development. etc. Exploring New Opportunities To sell the new Helena Rubinstein line. And the target market is younger and trendier than L'Oreal's typical luxury customers. which demonstrates just how beneficial cosmetics can be to individual’s well being. which has thus far provided for 170. It will be part of the programme already put in place by L’Oreal in Africa. L’Oreal believes in the strength for long term growth and sustenance. Laboratories in France. but L'Oreal's lead could start the ball rolling. the United States and Japan employ over 2.Research and Development Since it was founded in 1907 by the chemist Eugene Schueller. Corporate Social Responsibility UNESCO and L’Oreal Professional Products signed an agreement under which they will work together on an HIV/AIDS prevention education programme.900 scientists and support staff from over 30 disciplines: chemistry. This programme will offer courses adapted to the cultures of the countries concerned. toxicology. Up to now. medicine. biology. men's cosmetic has been a small niche market. Research findings are published in numerous international scientific journals and in 2004 L’Oreal applied for 586 patents.
” “quality of products. 10 . Achievements L’Oréal ranks first in the 2005 survey of the reputation of France’s CAC 40 companies.” “attractiveness. L’Oréal was named “Packager of the Year” in 2003 by CPC Packaging. and the Group’s overall culture of inclusiveness has earned it the very first Diversity Best Practices’ Global Leadership Award. illustrates how the private sector and an intergovernmental institution can pursue joint projects to support women of science.” L’Oréal decided to link up with the Cité des Sciences Museum in Paris to launch the world’s first exhibition on hair in 2001. the L’ORÉAL-UNESCO FOR WOMEN IN SCIENCE Award was designed This collaboration. customers and suppliers. After a highly successful three-year European tour. L’Oréal USA was recently chosen by the US magazine Occupational Hazards as one of the sixteen safest companies in the United States. L’Oreal contributed € 1 million. Mr.” “desirable products.” L’Oréal was the company most often mentioned under the headings “good financial health. L’Oréal’s CEO. veritable places of exchange and dialogue across the continent. the world year of physics. encourage the advancement of knowledge and enhance development on a global scale.relaying their knowledge to clients in their salons. According to the survey. The study was conducted by the Observatoire de la Réputation and the European strategic intelligence leader. Lindsay OwenJones has long been a fervent proponent of diversity and feels his company’s success is in large part due to the culture of inclusion he and his teams have worked hard to promote. L’Oreal realized the need of women in science and in 1998.” “desirable place to work. After the mass scale destruction due to tsunami in India L’Oreal participated in the international relief effort. An award that underlines the Group’s capacities in meeting the consumer’s needs by using the most sophisticated technologies in packaging.” and “desirable company to invest in. 2004. L’Oréal’s firm commitment to promoting diversity among its employees. The distinction rewards the Group’s US subsidiary’s commitment to and achievements in occupational safety. L’Oréal’s “Decoding Hair” exhibition heads to Central America and opens in Mexico on December 9th. “L’Oréal’s outstanding reputation is largely due to its attractiveness as a company and its good financial health. Datops. Five remarkable women physicists receive the L’Oreal-UNESCO for women in science award for 2005. an American trade journal for the cosmetics and personal care industry.
How were these important changes brought about? The first important reason highlighted by Fortune Magazine was the Group’s brand development strategy. mostly on the French market. Ten years ago.A Complete Global Changeover In just a decade. This successful product is the result of an initial setback: Moisture Whip lipstick felt too dry to Japanese lips. it is so popular in Russia that certain colors are out of stock . . L'Oreal's competitors are hustling to catch up. Thus. L’Oréal Paris. From giant P&G to niche players such as Los Angeles-based cosmetics maker Stila. its image has now become trendy in such far away places as Japan or China. in the emerging markets like Japan L'Oreal still trails behind. is now sold the world over without having lost one iota of its image of French chic. eventually. Its new "international and sexy" look has won over the world’s most stylish teenagers. 75% of L’Oréal’s $5. it was exported everywhere in Asia and. the product was sent back to the laboratory. while the American market accounted for 32% of sales (a doubling of the American market share the company had in the early nineties). throughout the world. the European market represented only 49% of the Group’s 13. Lindsay Owen-Jones insisted on giving it a new name and Water Shine lipstick was born. After having conquered the Japanese market. This formerly "Middle America" brand was bought in 1996. Today. 11 .7 billion dollar revenues. Adding "New York" to the brand’s name has made it a huge international success. L’Oréal has undergone a complete changeover. Last year. In just a few years. brilliantly formulated and led to fruition by an international expert. the Group’s leading brand. One such outstanding success story is Maybelline.5 billion annual sales came from Europe. Water Shine Diamonds lipstick by Maybelline is a symbol of how global L’Oréal has become. L’Oréal’s image seemed to be indelibly linked to Parisian sophistication. Today. the trick will be staying ahead in the game as his powerful rivals seek to play the global branding game.
Brand image—World No.1 Research & development-586 patents Innovation on IN products Range of portfolio—diversity of products Global brand—presence in 130 countries Strong Corporate Social Responsibility policy Strengths Strengths Brand confusion Positioning in the myriad brands Presence remains underdeveloped in emerging markets. Weakness Emerging markets of developing countries Growing cosmetic and grooming market Newer acquisitions—more range of products Opportunities New channels on the electronic media Local players in the new market expansions Brand cannibalization Threats 12 .
In 2002. L'Oreal came to India with GARNIER range of products from the low-end brand of their international portfolio. These are also part of the “professional division”. L'Oreal entered India with Excellence crème in 1996. This also marked the entry of Majirel Hair Color in India. MATRIX caters to the lower segment demand. Transiting from the “Consumer Product” segment to their “Professional Products” range. GARNIER became a wholly owned subsidiary in 1994. Following its global strategy of bringing the “country-of-origin” formula to new markets. One of the early players the company had to take the agency route for selling their products. This division required a different handling and L'Oreal set two development centers in New Delhi and Mumbai to train the salon owners and professional hairdressers. The latest from the L'Oreal quiver are the brands-“MATRIX” and “KERASTASE”. In fact. Market grew and L'Oreal also introduced their skin care and make up offerings in India.L'Oreal’s Journey in India With liberalization L'Oreal sensed the opportunity in the Indian market and came to India with the hopes of a growing market. a significant development was the launch of VICHY that marked the introduction of “Active Cosmetics Department”. Thus we see that L'Oreal in India has followed a two-pronged strategy: having awide portfolio with the range of products for both premium and middle and lower segments in each of their product divisions reinforcing their brand image through promotion of the premium brands even at low demand. L'Oreal in India was looking at widening their portfolio along with deepening the product lines. the first brand signed as L'Oreal Paris. Expansion of the product line started early with the introduction of skin care range of SYNERGIE. L’Oreal set up the Professional Product division in 1997. The rise was also reflected in the change of the subsidiary in India from Indelor to “L’Oréal India Private Limited”. over the three years of its presence its coverage is just 80 chemists all over India. However. 13 . This is a very niche. premium product from L'Oreal. while KERASTASE is a super premium product.
14 . The efforts have paid off and L'Oreal today is present in over 300 Indian cities accessing 7 international portfolio brands. L'Oreal products in India are marketed in a variety of distribution channels namely : mass market. Nivea etc. P&G. Registering a blisterin double digit growth L'Oreal looks set to capture the Indian market in the coming years.The main threat that L'Oreal face s in India comes from not just its direct competitors like Revlon. So L'Oreal is fighting to bring in a whole new lifestyle here that requires a change in the way the Indian women think of grooming and also about the expenditure on it. . pharmacies and salons. but also from the traditional wisdom prevailing.
an immense market to cater to with a mind-blowing range of products spells hard work fro L'Oreal. and their ambitions go far beyond financial performance. The Group has confirmed its determination to link economic growth with strong ethical principles and a real awareness of its responsibilities to the community. Their markets can be represented as follows: Thus.Conclusion L’Oréal’s core business is people’s well being. 15 .
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