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