GLOBAL STRATEGY

I. Firm introduction
1. Establishment, industry
L'Oréal S.A. is a French personal care company headquartered in Clichy,
Hauts-de-Seine with a registered office in Paris. It is the world's
largest cosmetics company and has developed activities in the field
concentrating on hair colour, skin care, sun protection, make-up, perfume, and
hair care.
In the early 20th century, Eugene Schueller a young French chemist
developed an innovative hair color formula, Aureole. He manufactured his own
products and sold them to Parisian hairdressers. The company was registered in
1909.
The guiding principles of the company, which eventually became L'Oréal,
were research and innovation in the field of beauty (beauty industry).

L'Oréal got its start in the hair-color business, but the company soon
branched out into other cleansing and beauty products. L'Oréal currently
markets over 500 brands and thousands of individual products in all sectors of
the beauty business: hair color, permanents, hair styling, body and
skincare, cleansers, makeup, and fragrance. The company's products are found
in a wide variety of distribution channels, from hair salons and perfumeries to
hyper - and supermarkets, health/beauty outlets, pharmacies and direct mail.

PPT:
 Industry Consumer goods

Founded 30 July 1909; 111 years

ago

Founder Eugène Schueller

Headquarters Clichy, France

Area served Worldwide

Key people Jean-Paul Agon

(Chairman and
CEO) and Françoise
Bettencourt Meyers
(Non-Executive
Chairwoman and Owner)

Products Skin care

Personal care

2. Market presence
L'Oréal is a global company that spans the globe. This French cosmetics
company set up more than 100 years, developed into a multinational company in
140 countries and regions with more than 88,900 employees. Its global product
portfolio is represented by 32 global brands, controlling 19,9% of the world's
cosmetics market.
 They have a very well-known and trusted image because they have been
around for so long as a quality brand. They also have a professional sector
(Keratase, Redkin, L'Oréal Professional) that is used and trusted worldwide
throughout high end salons. L’Oréal Laboratories has developed groundbreaking
innovations such as the first shampoo without soap, the first fast bleaching
agent, which first highlights the enhanced enhancement shampoo, the first hair
color without ammonia or artificial skin called Episkin. With the slogan
"Because we're worth it", they push the message "beauty for all" to attract a
wide range of consumers regardless of their ethnicities, gender, and age.
With worldwide sales of over 29.8 billion euros in 2019, L'Oreal is the
world's largest cosmetics and beauty company, concentrating on hair color, skin
care, sun protection, make-up, perfumes, and hair care.

PPT:
 3. Performance (số liệu khá cũ)
In 2007, L'Oréal was ranked 353 in the Fortune Global 500. The company
had earned $2,585 million on sales of $19,811 million. There were 60,850
employees
 By 19 March 2016 the company had a share value of 89,542 million
euros, distributed in 562,983,348 shares. Its reported operating profit in 2016
was €4.54 bn based on revenue of €25.8 bn.
In 2020

 Sales: 27.99 billion euros

 Operating profit: 5.20 billion euros, representing 18.6% of sales
 Earnings per share: 7.30 euros
 Net cash flow: 5.48 billion euros
 Dividend: 4.00 euros,

(https://www.loreal-finance.com/eng/news-release/2020-annual-results#_ftn6)
Net profit
€m 2019 2020 Growth
Operating profit 5,547.5 5,209.0 -6.1%
Profit before tax excluding non-recurring items 5,847.9 5,485.5 -6.2%
Net profit excluding non-recurring items
4,356.9 4,099.0  -5.9%
after non-controlling interests
 II. Global strategy ( chiến lược toàn cầu)
- Universalization (Global standardization)
L’Oréal has chosen a unique strategy: Universalization. It means
globalization that captures, understands, and respects differences. Differences
in desires, needs, and traditions. To offer tailor-made beauty, and meet the
aspirations of consumers in every part of the world, L’Oréal is driven by this
vision of the world.

PPT
1. Descriptions (mô tả)
WORD
For L’Oréal, universalization is about having a truly global presence
through a unique organization. They are strategically concentrated yet
operationally decentralized. Local teams are empowered who ensure that in
every country they are close and relevant to their consumers.
That means also creating and producing cosmetics at a local level, so that
their formulations are perfectly adapted to the needs of our local consumers. To
achieve that, they have developed a worldwide network of Research &
Innovation and marketing hubs, one for each of their strategic market areas: the
United States, Japan, Brazil, China, India and South Africa. To complement
their work in development, L’Oréal also has a global industrial presence, so that
these innovations can be brought to market quickly and efficiently.

Since Jean Paul Agon became CEO of L’Oréal in 2006, revenues have grown by
more than 3x and the stock price by more than 4x. According to Agon, the 112-
year-old French beauty conglomerate has strengthened its position as the
undisputed leader in the global beauty market due to a healthy appetite for
acquisitions, as well as a robust and well balanced business model that covers all
circuits, all categories, all price points and all consumers.
In the battle for global beauty markets, $12.4 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.
L'Oreal is surging in markets stretching from China to Mexico. Its secret:
conveying the allure of different cultures through its many products. Whether it's
selling Italian elegance, New York street smarts, or French beauty through its
brands, 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.
That sets L'Oreal apart from one-note marketers such as Coca-Cola Co., which
has just one brand to sell globally.
Mergers And Acquisitions
The company entered foreign markets by acquiring smaller cosmetic
companies as a springboard to quickly penetrate foreign markets. The
acquisition allows L’Oréal to strengthen its position in high-performance
professional skin care.
- It has signed an agreement to acquire SkinCeuticals, a professional
skin care company. Founded in 1994 and headquartered in Dallas, Texas,
America. The acquisition of the leading American brand of cosmetics designed
for use by dermatologists and plastic surgeons, in association with L'Oréal
research, will provide L'Oréal with a powerful position in this potentially strong
market throughout the world
- The company entered the Chinese market by acquiring the Chinese
brand Mininurse in December 2003.
- In 2016, L'Oréal agreed to acquire IT Cosmetics for $1.2 billion which is
an American brand.....
 Research and Development
Since it was founded in 1907 by the chemist Eugene Schueller, 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.
Each year the Group devotes more than 3% of its turnover to Research and
Development.
Laboratories in France, the United States and Japan employ over 2,900
scientists and support staff from over 30 disciplines: chemistry, biology,
medicine, physics, toxicology, etc. Research findings are published in numerous
international scientific journals and in 2004 L’Oreal applied for 586 patents.
L’Oreal believes in the strength for long term growth and sustenance.
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.
Another example of L’Oreal’s commitment to philanthropy and serving
disadvantaged communities is the Group's continued support over the past 15
years, to the Look Good Feel Better programme. This initiative helps put a smile
back on the faces of cancer patients through skin care and make up workshops.
LGFB is an original project from the cosmetic industry, which demonstrates just
how beneficial cosmetics can be to individual’s well being.
After the mass scale destruction due to tsunami in India L’Oreal participated in
the international relief effort, L’Oreal contributed € 1 million.
2. Pros and cons ( ưu và nhược điểm)
Pros:
- Dominate the big market by universalization strategy.
- Approach to consumers in almost all segments.
- Think global but act local
- Brand image—World No.1
- Research & development-586 patents
- Range of portfolio—diversity of products
 - Global brand—presence in 130 countries
- Strong Corporate Social Responsibility policy
Cons:
- Producing various goods for every segments -> Brand confusion
- Taking much time to manipulate and collect customers’ responding.
III. Global strategy of the firm in marketing, HR. ( chiến lược toàn
cầu trên các lĩnh vực nhân sự và thị trường)
1. MARKETING
L’Oréal very powerful design brands / products to meet the regional and
national needs. They have a wide variety of products ranging from make-up,
skin care to hair care, which catch up all different needs of consumer. They have
also started to offer products that are all-natural, plant-based, and sensitive or
acne-prone skin types. Based on conditions such as demographic, geographic,
socioeconomic, lifestyle / personality, L’Oréal determines the characteristics of
the client so that they can approach best suited to each customer segments.
In L’oreal Marketing Strategy, the attractive and famous models and
celebrities are used for promotions. For instance, In India, former Miss World
Aishwarya Rai Bachchan and Sonam Kapoor have been its brand ambassadors.
They feature famous celebrities such as Beyoncé, Penelope Cruz, and
Jennifer Lopez to attract worldwide attention but also to appeal to a wide range
of ethnic consumers. The loreal ad containing these celebrities are telecast on
television channels, radio, fashion magazines, hoardings, and neon signs.
Free product samples are distributed to salons across the country to
increase the product adoption rate. Sometimes, discounts are also given to
promote products. Being a top makeup brand, it has also started using internet
marketing to increase its sales.
Segmentation, targeting, positioning in the Marketing strategy
of L’Oréal
L’Oréal has segmented the market based on the demographic factors such
as L’Oréal LUXE for upper middle and upper-class customers who wear beauty
as their identification, Dark & Lovely for African women’s,
professional products for customers offerings/ enhancing the looks
of individual customers.
For targeting differently segmented of customers with its 34 brands in
several product categories, it has
devised differentiation strategy to target middle, upper middle and upper-income
class customers majority of who are working professionals and are those who
want to flaunt their personas.
The brand has positioned itself as most ethical cosmetics and beauty Care
Company focusing on Universalisation i.e respecting the differences in cultures,
desires, and aspirations of the internal & external stakeholders.
Marketing Mix Strategy
Product in the Marketing mix of L’oreal
 L’Oreal has a portfolio endowed with international standard of brands
covering a wide range of products while satisfying the needs of every customer
present in any part of the world. All its products pass the international standards
of testing. The company deals in activities related to cosmetics, skin care, hair
color, make-up, sun protection, hair care and perfumes. 

Place in the Marketing mix of L’oreal

L’Oreal has development and research centers in six places worldwide

like Japan, France US and China and its products are available in one hundred
and thirty countries of the world. The various products are found in various
outlets like perfumeries, hair salons, super markets, pharmacies, beauty outlets
and even through direct mail. Besides this, the brand has its own website and has
tie-ups with other shopping sites on internet.

Price in the Marketing mix of L’oreal

The urban consumer is not as price conscious as was portrayed earlier.

For premium products, the consumers are ready to dole out premium prices. As
many of the L’Oreal products belong to the high qualitative product group, the
company had to maintain a premium pricing policy for those products.

Some of the brands under L’Oreal have products that cater to the middle class
section of the society and the pricing policy for these products is reasonable so
that the consumers can easily afford them.

Promotion in the Marketing mix of L’oreal

L’Oreal has an advertising slogan that has always defined the brand. The first
slogan was “Because I’mWorth it”. This was later replaced by “Because you’re
Worth it” and in the year 2009, this was again changed to “Because we’re Worth
it”. The changing times along with the mindset and concept can be seen in the
changing slogans. The shift to the letter “we” was to denote the consumer
involvement in all the brand products.

Former Miss World“Aishwarya Rai Bacchan” has been its brand

ambassador and international face and presently the actor “Sonam Kapoor” has
been in the L’Oreal advertisements. The ad campaigns are in numerous
television channels, radio, fashion magazines, hoardings and neon signs.

Free products as samples are provided with other products or at salons to market
the new items. Sometimes discounts are offered on some products to increase
the sales figures and to promote the products.
 2. HR
Outlining the future of Human Relations, building a vision for the next 10
years, and adapting to new ways of working – this is what L’Oréal has set out to
achieve by using a collective intelligence platform to gather ideas from the
entire Human Relations community, to inspire and contribute to the Group’s HR
2030 Vision. The Group opened the platform to its 1,800 Human Relations
employees worldwide, of which 80% participated by suggesting, approving or
voting for ideas. These figures are a testament to the community’s commitment:
over 100 teams actively participated in more than 40 countries, with nearly 200
contributions made during dedicated workshops, and over 500 ideas submitted.
The ideation platform, which is based on new technology, helped to
launch the project and engage the entire HR community as well as to analyze the
data to develop a vision for the coming decade.
A global review complemented this open and inclusive approach, inviting
all participants to interact and promoting spontaneous exchanges. This
innovative, collective and collaborative initiative is the epitome of teamwork
and has contributed to the development of a shared new vision for the future of
Human Relations.